Yen Intervention and Its Impact – Monday, Throughout the Day
On Monday, the Japanese Yen (JPY) saw a significant movement, swinging over 500 pips in just a few hours. This drastic change suggests potential intervention by Japanese authorities. This occurred during a Japanese bank holiday, resulting in reduced liquidity and allowing more time for the Ministry of Finance in Tokyo to respond. This potential intervention might have broader implications for global markets, especially if it prompts the Bank of Japan to raise interest rates to support the Yen.
Middle East Negotiations – Throughout the Week
Discussions are ongoing in the Middle East, with indications that Israel and Hamas might be nearing a ceasefire agreement despite conflicting statements from some Israeli officials. Even a temporary truce could lessen the risk of a broader regional conflict, which could have significant implications for global trade and security. A ceasefire might reduce tensions in the Red Sea and decrease the chance of a confrontation involving Iran.
Gold’s Struggle for Momentum – Monday through Friday
Gold had a challenging start to the week, trading between 2,320 and 2,346 on Monday. A downward trend could be likely due to a stronger US Dollar and traders reducing their long positions ahead of key events, such as the Federal Reserve’s interest rate decision and the Non-Farm Payrolls report.
Key Events to Watch This Week:
Tuesday: China PMIs, EUR Inflation, and Big Tech Earnings
- China Manufacturing and Non-Manufacturing PMIs at 02:30 BST
China’s PMI data provide insights into the state of its manufacturing and non-manufacturing (services) sectors. Strong results might indicate continued recovery, affecting global markets and commodities like oil and copper. - EUR Preliminary Inflation (HICP) at 10:00 BST
The Eurozone’s Harmonised Index of Consumer Prices (HICP) gives an early view of inflation. This reading can influence the European Central Bank’s (ECB) interest rate policy. A lower-than-expected result might suggest more rate cuts, while a higher result could lead to a more hawkish stance. - Big Tech Earnings: Amazon and Apple
Amazon and Apple are releasing their earnings this week, providing key indicators for the tech sector and the broader market. These updates can significantly impact US indices.
Wednesday: USD ADP Employment, ISM Manufacturing, and Fed Interest Rate Decision
- USD ADP Employment at 13:15 BST
The ADP report provides a snapshot of private-sector job growth before the Non-Farm Payrolls report. A strong reading might indicate a robust labour market and impact the US Dollar. - USD ISM Manufacturing at 15:00 BST
The ISM Manufacturing report reveals the health of the US manufacturing sector. A reading above 50 suggests expansion, while a reading below 50 suggests contraction. This report can affect commodities, stocks, and the Dollar. - Fed Interest Rate Decision and Press Conference at 19:00/19:30 BST
The Federal Reserve’s interest rate decision and press conference are crucial for market sentiment. Although no rate change is expected, Chair Jerome Powell’s comments on inflation and the economic outlook will be closely watched.
Thursday: JOLTs Job Openings and Initial Jobless Claims
- USD JOLTs Job Openings at 15:00 BST
The JOLTs report measures the number of job openings, indicating the health of the labour market. A high number suggests a strong job market, potentially affecting the Fed’s policy outlook. - USD Initial Jobless Claims at 13:30 BST
This weekly report shows the number of people applying for unemployment benefits. A lower number indicates a strong labour market, while a higher figure suggests potential weakness.
Friday: USD Nonfarm Payrolls and ISM Services PMI
- USD Nonfarm Payrolls at 13:30 BST
The Non-Farm Payrolls report is a key indicator of job creation in the US. A strong report might suggest the Fed will maintain higher interest rates, while a weak report could lead to a more dovish stance. - USD ISM Services PMI at 14:00 BST
The ISM Services PMI indicates the health of the US services sector. A reading above 50 suggests expansion, while below 50 suggests contraction. This report can impact market sentiment and influence the Fed’s policy decisions, especially since it follows the Non-Farm Payrolls report.
