US stock market indices reached fresh all-time highs this week. Indices have been ignoring macroeconomic data recently but will they also ignore retail sales reading for January? Will minutes from FED and ECB turn out to be a trigger for EURUSD? Will CBRT move TRY this week? Watch EURUSD, US100 and USDTRY during the week ahead.
EURUSD has regained some of the lost ground this week as USD weakened across the board. Jerome Powell continued to play down expectations that the Federal Reserve will look into monetary tightening anytime soon. Fed and ECB will release minutes from the latest meetings next week (Fed - Wednesday, 7:00 pm GMT and ECB - Thursday, 12:30 pm GMT). While releases may provide some short-term volatility, they should not change the overall outlook as rates are expected to remain at low levels for a long time.
US stock market has been ignoring recent data. Lacklustre jobs figures for January did not manage to distance indices away from the all-time highs. Another important set of US data will be released on Wednesday at 1:30 pm GMT - retail sales for January. Headline data is expected to show 0.8% MoM increase, capturing an impact of the second round of stimulus checks. However, the question is will indices care if data misses?
USDTRY has dropped from an all-time high of 8.57 at the beginning of November to around 7.00, thanks to CBRT tightening. Turkish President Erdogan repeated that he prefers lower interest rates but markets believe that CBRT will stay on hold in the near future. The Bank is expected to announce its next monetary policy decision on Thursday at 11:00 am GMT and the main interest rate is expected to remain at 17.00%. Nevertheless, CBRT rate announcements usually trigger a jump in short-term volatility on TRY market.
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