Three markets to watch next week (04.02.2022)

With the NFP report for January out of the way, markets attention shifts to another key piece of data for the Federal Reserve - US CPI report for January. Inflation is expected to move higher, which could cement the FED's decision to raise interest rates in March, given the upbeat payrolls report. 

Investors will also be served the final inflation figures from Germany, but the key event for European indices may be the meeting between Biden and Scholz regarding the potential conflict between Ukraine and Russia.

US500

Inflation pressures continue to build up in the economy. US CPI reading for January is scheduled for Thursday, February 10 (1:30 pm GMT). Market consensus points to an acceleration of core inflation from 5.5% to 5.9% YoY. Continued pick-up may raise the odds the central bank will deliver a bigger rate hike in March. 

GBPUSD

While inflation in many countries reached multi-year highs, economic growth forecasts are being revised lower amid concerns that rising prices will have a negative impact on incomes. Therefore, Friday's updated GDP data for the UK may cause some market moves. Also the pair will have a chance to move after the release of University of Michigan consumer sentiment for the US.

DE30

The annual inflation rate in Germany is expected to stay at 4.9% YoY, after it fell from a 30-year high in December. It seems that the meeting between Biden and Scholz may be a key event for European markets such as DE30 or RUS50. Politicians will discuss the situation related to Ukraine and Russia. Germany wants an exception for the European energy sector if sanctions are imposed on Russian banks. DE30 was under pressure last week but remains near a major support zone at 15 000 pts.