5 Things to Watch this Week

As conflicts continue, in Europe and in Middle East, the world keeps on moving and several Central Banks will deliver their interest rates decisions this week. No interest cuts are expected, yet analysts, traders and investors are expecting to get some guidance on monetary policy for 2024.

Last week U.S. equities kept on climbing higher with the S&P 500 and the Dow Jones posting new all-time highs on Friday. Big tech stocks are the major cause for such bullish trend, with the Q4 earnings season already up and running, and strong results expected from all of the "Magnificent Seven"(Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta Platforms and Tesla).

There are no major events happening today so take your time to look at charts and plan your trades.

January 23rd

JAPAN: BoJ INTEREST RATE DECISION

The Bank of Japan (BoJ) has been enduring in a decades-long policy of negative interest rates. Chances are that no change is gonna come and the Nikkei generally rallies on a weaker yen, as it makes Japanese exports more competitive and boosts the value of overseas revenue. So far, this index is registering a 9.2% advance, benefiting from the "anywhere-but-China" bid, but analysts are warning that there are risks the market is overheated.

January 24th

CANADA: BoC INTEREST RATE DECISION

The Bank of Canada is likely to wait until at least June to start interest rates cuts. The impact of such decision over the Canadian Dollar (CAD) is yet to be seen as the value of Canada's currency tends to be sensitive to shifts in risk appetite (Canada is a major producer of commodities, such as oil, and there are definitely risks coming from the Middle East).

January 25th

EUROPE: ECB INTEREST RATE DECISION

The European Central Bank is expected to deliver some guidance on its calendar for interest rates cuts in 2024. Christine Lagarde's speech will be influenced by the latest German data - IFO Business Climate due on the 25th - and naturally by recent data on the Euro Area PMIs.

U.S.: GDP GROWTH RATE QoQ (Q4)

December’s release showed a 4.9% Q3 increase sustained by a growth in consumer spending, inventories, exports, residential investment and government spending. However, the expected result for Q4 heads for a slowdown and traders are already pricing in a greater chance that the Fed will keep rates steady in March, as opposed to initial expectations for a cut.

January 26th

U.S. : U.S. PCE Price index YoY

The Personal Consumption Expenditure (PCE) Price Index provides a measure of the prices paid for domestic purchases of goods and services. While the Consumer Price Index (CPI) - the "traditional" inflation gauge - assumes a fixed basket of goods and uses expenditure weights that do not change over time for several years, the PCE Price Index uses a chain index and resorts on expenditure data from the current period and the preceding period (known as Fisher Price Index).