This week is pivotal for global financial markets, with the key focus on interest rate decisions from the Federal Reserve and the Bank of England. These decisions, due on Wednesday and Thursday respectively, are set to significantly influence the US Dollar, the Pound, and broader market sentiments. Amidst these major announcements, other crucial economic data like the Eurozone GDP and US Nonfarm Payrolls will also be released, adding to market volatility.
Investors and analysts are poised for a week of critical insights into the health and direction of major economies.
🇪🇺 GDP q/q on Tuesday, January 30, at 12:00 GMT+2
A week rich with economic releases begins on Tuesday with the quarterly Eurozone GDP data. Gross Domestic Product (GDP) q/q reflects the changes in the total value of all goods and services produced in the Euro area in the current quarter compared to the previous one. The calculation excludes the prices of goods and services used in intermediate manufacturing, and the data are seasonally adjusted.
The upcoming release is unlikely to bring surprises, as experts predict it will remain unchanged at -0.1% from the last quarter. However, any deviation in the data could cause volatility in the $EURUSD currency pair and the $DAX30 index.
🇺🇸 JOLTS Job Openings on Tuesday, January 30, at 17:00 GMT+2
The next key release is also scheduled for Tuesday, but later in the day. The JOLTS (Job Openings and Labor Turnover Survey) Job Openings is a monthly report detailing job vacancies in the US commercial, industrial, and office sectors. The calculation includes all vacancies that are open as of the last business day of the month, providing insight into the US labor market. An increase in the index may positively impact the US Dollar quotes. Assets like Dow Jones, Nasdaq, and SPX500 may also be affected.
The release is expected to come in lower than forecasts, at 8.658 million compared to the anticipated 8.790 million.
🇺🇸 Fed Interest Rate Decision on Wednesday, January 31, at 21:00 GMT+2
The most crucial release of the week will undoubtedly be the Federal Reserve's decision on the key interest rate. This decision is made on a predetermined date during a vote among the members of the Federal Open Market Committee (FOMC) regarding the Federal Reserve's short-term interest rates, which influence the rates charged on credits and commercial bank loans.
An increase in the rate can positively affect the US Dollar, while a decrease may have a negative impact. If the rate remains unchanged, analysts examine the number of 'for' and 'against' votes and analyze the statements of voters after the meeting minutes are published, to forecast the outcomes of the next meeting.
The current rate stands at 5.50%. According to experts, it may decrease by 0.25%, or remain at the current level. Regardless of the outcome, the US Dollar and US stocks will be in the spotlight.
🇬🇧 BoE Interest Rate Decision on Thursday, February 1, at 14:00 GMT+2
Following the Federal Reserve's decision on the key interest rate, the Bank of England's decision will come next. The Bank of England Interest Rate Decision is made by the members of the monetary policy committee and is published two weeks after the meeting.
The interest rate decision is among the most significant events. An increase in the interest rate is generally seen as positive for the sterling.
It's noteworthy that the current rate is at 5.25%. According to expert estimates, it is not expected to change, which could positively impact the Pound in the $GBPUSD pair.
🇺🇸 Nonfarm Payrolls on Friday, February 2, at 15:30 GMT+2
The final significant release of the week will occur on Friday. This is the widely recognized NFP (Non-Farm Payroll), which presents the number of new jobs created during the given month in all non-agricultural sectors of the U.S. An increase in this indicator can positively affect the US Dollar quotes.
It's very important to pay attention to this release, as the expected outcome of 186K jobs is lower than the forecasted 216K. This discrepancy could lead to increased volatility in the EUR/USD pair, as well as in the stocks of Dow Jones, Nasdaq, and SPX500.
That's it for this week! 👋
