The upcoming week in the financial markets may be full of excitement, as investors will be monitoring several key reports that could determine the future direction of the markets. After a week filled with tension and uncertainty, particularly related to the U.S. labor market data, the markets enter a new week with a sense of uncertainty regarding future monetary policy moves and economic conditions. With extreme fear still prevailing among investors, the upcoming data could bring either relief or further concern.
The beginning of the week will bring the publication of the ISM Services PMI from the USA on Monday at 16:00 (Warsaw time). Following last week's mixed labor market data, this indicator, which measures the condition of the services sector, may provide new insights into the state of the American economy. Forecasts indicate a decline from 56.1 to 54.8, which may suggest some weakening in this sector, and any surprise in the reading could trigger significant market reactions.
Wednesday will be an intense day, especially for investors interested in New Zealand dollars, due to the RBNZ's interest rate decision and the accompanying press conference. Although forecasts do not indicate a change in the interest rate level, any hints regarding future monetary policy could impact the currency. In the evening, at 20:00 (Warsaw time), we will also learn about the FOMC minutes, which may provide more insight into the Fed's thinking regarding further interest rate moves. Following Powell's recent speeches, markets will be looking for clues about a potential policy shift in response to economic data.
Thursday will bring us the final data on U.S. GDP for the first quarter and the Core PCE Price Index, which is closely monitored by the Fed as a measure of inflation. Stability in the forecasts at 0.7% for GDP and 0.4% for Core PCE may provide some relief to the markets, but any deviations could trigger nervousness. The market will closely watch these releases, especially in the context of uncertainty regarding inflation and its impact on Fed decisions.
Friday is shaping up to be the culmination of the week, with the release of the CPI data from the USA, which could determine the future direction of monetary policy. Forecasts indicate a significant rise in inflation, which may increase pressure on the Fed to tighten monetary policy. At the same time, we will also receive data from the Canadian labor market, which could influence movements in the Canadian dollar. This set of key data at the end of the week could introduce significant volatility in the markets, closing the week in dramatic fashion.
