The Week Ahead

The week ahead in finance is shaping up to be a busy one, with several key events and data releases on the calendar.

Here are the week’s key events:

Monday

On Monday, the Federal Reserve will release data on consumer credit in the US, which can provide insight into spending and borrowing habits and potentially indicate the strength of the economy. A higher level of consumer credit may suggest consumers are confident and willing to take on debt, indicating a strong economy. A lower level may indicate caution in spending and borrowing, potentially signalling a weaker economic environment.

Tuesday

On Tuesday we will hear from Fed chair, Jerome Powell. The speech will be a key event for financial markets and will provide valuable insight into the direction of monetary policy and the health of the US economy. Powell is expected to address several issues related to the current state of the economy and the central bank's monetary policy stance. If the Fed maintains its hawkish approach this will be of benefit to USD forex pairings.

Wednesday

Wednesday will see the release of Australian CPI figures. Australian CPI has been trending upwards in recent months, and this release is expected to show further increases in prices. Could be cause for concern; higher inflation is likely to lead to a more aggressive monetary policy. Additionally, the 10-year bond auction is happening in the US. The auction provides insight into the level of demand for long-term debt and the direction of interest rates. Weak demand for bonds could be a signal investor confidence is falling.

Thursday

Thursday is a big day for the US market as we expect CPI releases from the Bureau of Labor Statistics. If the CPI shows that inflation is rising faster than expected, it may lead to concerns about the Federal Reserve raising interest rates to curb inflationary pressures. The Department of Labor is also set to release unemployment data. An elevated level of unemployment claims can indicate a weak labour market and can be correlated to falls in general consumer spending as average disposable income falls.

Friday

On Friday, the UK will release its GDP data for the latest quarter. This data, which is released on a quarterly basis, is closely monitored by investors, policymakers, and economists as it can indicate the strength or weakness of the economy. The University of Michigan will also release preliminary data on its consumer sentiment index for January, which reflects consumer attitudes towards the economy. A higher reading is generally seen as a positive sign for the economy, while a lower reading suggests rising consumer uncertainty.