First week of the New Year is always interesting as traders make new strategic allocations. NEXt week will host the release of the US jobs data for December, an important report in terms of future Fed policy moves. Apart from that, investors will also focus on data from the US and Europe as well as FOMC Minutes. Be sure to watch USDCAD, USDCHF and DE30 in the upcoming week.
USDCAD
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Create account Try a demo Download mobile app Download mobile appA time has come for the release of key US data - NFP report for December (Friday, 1:30 pm GMT). Market expects an addition of 200k jobs. Upbeat report will give the Fed more reasons to accelerate the pace of the tapering process and tighten monetary policy sooner than expected. USDCAD will be on the watch around the release time as the Canadian labour market will be released simultaneously. USDCAD moved higher in December, however buyers failed to break above 1.37 resistance before Christmas and price pulled back towards 1.35.
USDCHF
On Wednesday the USDCHF pair will have a chance to move following the release of Swiss CPI report for December (7:30 am GMT), the ISM Manufacturing report (3:00 pm GMT), JOLTS data (3:00 pm GMT) and FOMC Minutes (7:00 pm GMT). The annual inflation rate in Switzerland stood at 3.0% YoY in November, unchanged from the previous month's five month low. Market expects inflation to tick lower in December, however a bigger than expected slowdown could weaken CHF. In the afternoon market will focus on FOMC minutes. Policy statement from the latest Fed meeting was seen as hawkish but USD erased most of the gains after Powell said that Fed is getting close to sufficiently restrictive rate levels. If the minutes contain any other remarks regarding this topic, this could be a fuel for a move lower in USD.
DE30
German DAX booked over 10.0% yearly loss as investors remain concerned over the economic outlook for next year. Surging covid cases in China added further pressure to an already challenging 2023, as a recession is looming, inflation remains elevated, the ECB is set to continue to raise interest rates and the war in Ukraine is far from over, leaving the energy crisis unresolved. However are current valuations justified? We will know the answer to the question this week, as data on retail sales, factory orders (Friday), preliminary CPI (Tuesday) and construction PMI (Thursday) will be published in Germany.
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