This week promises to be significant for the markets, with policy meetings scheduled for the Federal Reserve, the Bank of England, and the Bank of Japan. Additionally, Friday will bring the U.S. jobs report, along with more major tech earnings results. Here’s a preview of what to watch in the markets over the coming week.

1. Fed decision

A decline in the closely monitored PCE inflation number on Friday helped most markets recover from last week’s substantial losses, aiding key FX markets like the Aussie and Kiwi in bouncing back.
US shares experienced their worst trading day since 2022 on Wednesday night, but by Friday, following the inflation report, the S&P 500 rebounded by 1.0% and the Nasdaq gained 1.0%.
Markets see only a small chance of a cut at Thursday morning’s Fed decision – at less than 5.0% – but a cut at the 18 September meeting is now fully priced in.
The Fed, which concludes its July policy meeting on Wednesday, has said it wants to be confident inflation is moving sustainably towards its 2% target before cutting interest rates.



 

2. Nonfarm payrolls

Nonfarm payrolls are a key economic indicator, reflecting job growth across most sectors except agriculture and government. They gauge economic health by showing employment trends, influencing central bank policies on interest rates and monetary measures. Strong payroll numbers often signal economic strength and can lead to tighter monetary policy, while weak numbers may prompt rate cuts to stimulate growth.
Financial markets closely track these figures, as they impact stock prices, bond yields, and currency values. Additionally, employment levels affect inflation and consumer spending, making nonfarm payrolls crucial for assessing overall economic performance.
Economists are expecting the U.S. economy to have created 177,000 jobs in July, moderating from 206,000 in the prior month. The unemployment rate, which has edged up over the past three months, is anticipated to remain stable at 4.1%.

 

3. Big tech earnings

Big Tech earnings are coming up, and any disappointments could further unsettle markets already anxious about inflated stock valuations.
Microsoft is set to report earnings on Tuesday, followed by Meta, the parent company of Facebook, on Wednesday, and Apple and Amazon on Thursday.
Weak results could reignite the concerns that led to a sharp selloff in U.S. stocks on Wednesday, marking the worst day for both the S&P 500 and Nasdaq since late 2022.
The recent surge in tech stocks has set a high bar for their performance. Alphabet, Google's parent company, reported better-than-expected revenue but saw its shares drop 5% as investors worried that rising AI infrastructure costs might squeeze profit margins.

 

4. Bank of England meeting

The Bank of England (BoE) is set to meet on Thursday, with investors split on whether policymakers will implement their first rate cut since 2020.
Uncertainty is particularly high this time, as key central bank officials have remained silent for over two months due to pre-election rules ahead of Britain’s July 4 general election.
Investors are uncertain if recent higher-than-expected service price inflation will be enough to prevent the BoE from reducing rates from their 16-year high of 5.25%.
Last month, the BoE’s Monetary Policy Committee voted 7-2 to keep rates unchanged, but the minutes revealed that the decision was "finely balanced," with some policymakers leaning towards a rate cut.

 

5. Bank of Japan decision

The Bank of Japan (BOJ) wraps up its latest policy meeting on Wednesday, and speculation about a potential rate hike is intensifying following hints from prominent politicians, including the prime minister, about the need for near-term policy normalization.
The weak yen’s impact on household and business spending has made the exchange rate a central issue for the ruling Liberal Democratic Party's leadership convention in September.
Despite the yen rebounding significantly by 10 yen per dollar from its three-decade lows earlier this month, some are still predicting a rate hike in July. They argue that the BOJ could capitalize on the yen's rally with a rate increase. However, others are concerned that a fragile economy and weak consumer sentiment might not withstand higher borrowing costs, especially with slowing U.S. growth already affecting the global economy.


Monitoring market information is crucial for informed investment decisions and risk management. Key data, such as central bank policies, earnings reports, and economic indicators, provide insights into market trends and potential volatility. Understanding these factors helps investors anticipate shifts in stock valuations, interest rates, and economic conditions, which can impact their portfolios. Keeping an eye on significant developments, such as central bank meetings or major company earnings, enables timely adjustments to investment strategies. Accurate market information also aids in identifying opportunities and mitigating risks, ensuring more strategic and responsive financial decision-making.

When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss. 

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.