The Federal Reserve, ECB, BoJ and Bank of England will announce monetary policy next week. Each central bank may make major announcements, so traders should watch precious metals, GBP and USD closely. Apart from that, US retail sales, UK inflation and labour market data plus eurozone industrial production will provide a volatility boost on the FX market. When it comes to Asian markets, investors will focus on China’s industrial output and retail sales data. Be sure to watch GOLD, CHNComp and EURGBP next week!
GOLD
The upcoming FOMC meeting is a top macro event of the week ahead. The FED is expected to ignore the Omicron variant and announce that it will speed up the pace of its tapering process. Some market participants also expect some signal regarding a more aggressive path for interest rate hikes in 2022 due to recent strong labour market data. Therefore, elevated volatility on stocks, USD and precious metals can be expected on Wednesday, 7:00 pm GMT.
CHNComp
China's retail sales and industrial production figures will be released on Wednesday, 2:00 am GMT and will come under scrutiny amid growing concerns over slowing growth in the second-largest economy in the world.
EURGBP
The Federal Reserve is not the only major central bank that will announce a rate decision next week. Thursday will be a busy day for EURGBP traders as the Bank of England will announce its interest decision on 12:00 pm GMT, followed by ECB on 1:30 pm GMT. In both cases, rates and QE settings are expected to remain unchanged. However, given the recent jump in inflation, markets hope for a somewhat more hawkish message. When it comes to BoE, last month one rate hike was fully priced in for this year, however the emergence of the Omicron variant and new restrictions may have changed policymakers views. Meanwhile, during the ECB meeting, investors will focus on further comments regarding a temporary increase in regular bond purchases.
