20.02.23 - 24.02.22
Results of the previous week
| AMC +17.37% | NG +13.39% | USDJPY +1.44% |
PA -7.02% | YM -2.59% | BRN -1.23% |
US indices were under pressure over the past week. One of the key factors contributing to the disappointment was the PCE Index data. The indicator showed the highest increase in the last 6 months, reflecting continued price pressure at high levels. Public inflation expectations for the coming year also rose to 4.1% from 3.9% the previous month. This brought back fears that the Fed is determined to continue raising interest rates.
Traditionally, the dollar has reacted positively to inflation news, which caused the stock market to fall. The US dollar strengthened against all six currencies in the dollar index basket. However, some currencies have had their own reasons. For example, the euro came under pressure amid reports that inflation in the monetary bloc fell to 8.6%.
Brent oil was trading mixed. Prices fell below $80 per barrel, but by the end of the week, they had recovered to around $83. Oil prices are under pressure due to fears that a high US Federal Reserve interest rate will push the US economy into a recession, negatively impacting demand. Negative sentiment from the US is partly balanced by positive expectations for the Chinese economy.
Key events of the current week
Germany. Unemployment figures | DATE 01.03 | GMT | FORECAST | PREV. | IMPORTANCE |
The German economy is slowing down. One should remember that high energy prices make all the difference. Some companies that heavily depend on energy resources are either cutting back or closing their production. This leads to the release of the labour force, which means that the country's unemployment rate may increase further. Such an index development could put additional pressure on the European currency as, when combined with falling inflation, it could change the ECB's mood regarding the interest rate. In such a scenario, we could see the EUR/USD drop as low as 1.0460. | |||||
The US. EIA crude oil reserves data | DATE 01.03 | GMT | FORECAST | PREV. | IMPORTANCE |
Brent oil prices stabilised at around $80-$86 a barrel, which is currently caused by contradictory factors. On the one hand, it's the hope that the Chinese economy will begin to pick up after lifting the COVID restrictions, leading to an increase in energy demand. On the other hand, it's the fear that high US Federal Reserve rates will have a negative impact on the US economy, putting pressure on oil consumption. US oil reserves are growing amid constant production. The figure has been significantly higher than expected in the last two weeks. This partially confirms that consumption is dropping. So another week of rising reserves could put pressure on oil. Brent (BRN) may return to $80 per barrel in this scenario. | |||||
The US. ISM Non-Manufacturing PMI | DATE 03.03 | GMT | FORECAST | PREV. | IMPORTANCE |
The US economy remains quite stable, managing to avoid a recession and significant slowdown, despite the Fed's multiple rate hikes. The latest PCE Index data has raised fears that inflation in the US will accelerate again. And this means that the US Federal Reserve may reconsider its mood on interest rates and return to raising them rather quickly or for a more extended period. The services sector plays a crucial role in the US, so these data help understand how stable the economy is. If the report meets or exceeds expectations, it could cause additional pressure on stock indices, as the Fed will have no reason not to raise interest rates. In such a scenario, the S&P 500 could drop to $3900.00. | |||||
