Following the release of the NFP report for May, markets' attention is now shifting to US CPI data for May, which will be released on Friday. USD and gold traders will look for hints whether there is a chance for a change in Fed's policy. Speaking of central banks, investors will be offered rate decisions from the ECB and RBA next week. Last but not least, the Canadian dollar may experience some volatility amid jobs report release. Be sure to watch GOLD, EURAUD and USDCAD next week.
GOLD
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Create account Try a demo Download mobile app Download mobile appRelease of the NFP report for May was a key event of this week. Now investors will have to wait until Friday next week when another major economic data will be released namely US CPI inflation data for May . Market expects headline price growth to decelerate slightly from 8.3 to 8.2% YoY and core gauge to move from 6.2 to 5.9% YoY. While deceleration would be welcome, it is unlikely to be big enough to discourage Fed from pausing tightening. A higher-than-expected reading could strengthen the case for more 50 bp rate hikes and have a negative impact on gold.
EURAUD
The week ahead will host rate decisions from two major central banks - Reserve Bank of Australia and European Central Bank. RBA is expected to announce a 25 basis point rate hike on Tuesday, 5:30 pm BST. However, calls have been mounting for a 50 bp rate hike. ECB is expected to stay on hold but may provide some clear guidance on whether rates will rise in July as market expects or not. EURAUD has snapped a month-long recovery move this week and rate decisions may provide more fuel for the move.
USDCAD
USDCAD is one of the FX pairs that are likely to be on the move on next week's Friday. The pair is expected to experience elevated volatility near 1:30 pm BST as not only the US CPI report for May will be released but also Canadian jobs data for May. Bank of Canada stays committed to hiking rates saying that unless price growth gets back under control, 75 bp rate hikes remain a possibility. The question remains whether BoC will remain so hawkish if the labour market starts to struggle.
