Home » Forecasting the Coming Week: ECB meets Non-farm Payrolls… and Powell

Forecasting the Coming Week: ECB meets Non-farm Payrolls… and Powell

by FX BrokerNews

Closing the week on a modestly bearish tone, the Greenback faced downward pressure as investors factored in the possibility of a Federal Reserve interest rate cut in June. Unforeseen weaknesses in critical economic indicators added to the currency’s challenges, creating a bit of space for relief in the risk-associated market sphere.

Driven by data-induced selling pressure, the USD Index (DXY) retreated to the 103.80 region on Friday, marking its second consecutive week in negative territory. Looking ahead to the week starting March 8, all eyes will be on key events such as Non-farm Payrolls and the Unemployment Rate. Before these pivotal releases, notable events on March 5 include the final S&P Global Services PMI, the ISM Services PMI, and Factory Orders. Subsequently, on March 6, attention will shift to the ADP report, Wholesale Inventories, and the Fed Beige Book, followed by the regular Initial Jobless Claims and Balance of Trade figures on March 7.

Turning to the global landscape, Germany and the euro area will release the final HCOB Services PMI on March 5, followed by Germany’s Trade Balance on March 6. March 7 brings the ECB meeting and a press conference by President Lagarde, along with another revision of the EMU Q4 GDP Growth Rate later in the week. Meanwhile, EUR/USD recovered in the latter part of the week and aimed to consolidate above the 1.0800 level.

In the UK, the BRC Retail Sales Monitor and the final S&P Global Services PMI are on the schedule for March 5, followed by the S&P Global Construction PMI and the Spring Budget 2024 release on March 6. GBP/USD showed a significant rebound toward the end of the week, reclaiming the 1.2650 area amidst renewed weakness in the Greenback.

USD/JPY displayed an erratic performance, closing the week with losses after four consecutive advances. In Japan, Q4 Capital Spending is due on March 4, with weekly Foreign Bond Investment figures on March 7. The busy session on March 8 will feature Household Spending, Bank Lending, the flash Coincident Index, the Leading Economic Index, and the Eco Watchers Survey.

Down under, Building Permits and the final Judo Bank Services PMI are set for March 4, preceding the Ai Group Industry Index. March 6 sees the release of the Q4 GDP Growth Rate, followed by the Balance of Trade results, Home Loans, and Investment Lending for Homes on March 7. Despite a late-week bounce, it was a negative week for AUD/USD, breaking a three-week positive streak.

In Canada, the Ivey PMI and the Bank of Canada (BoC) interest rate decision are scheduled for March 6. Additionally, Balance of Trade prints and Building Permits are expected on March 7, followed by the labor market report on March 8. USD/CAD closed its third consecutive week of gains, with the upside seemingly capped by the 1.3600 barrier.

Finally, in China, the Caixin Services PMI is due on March 5, followed by Balance of Trade readings on March 7, and the Inflation Rate and Producer Prices on March 9. USD/CNH maintained its range-bound pattern above the 7.2000 region.

Anticipating Economic Perspectives: Voices on the Horizon

  • BoJ’s K. Ueda speaks on March 5 along with Fed’s M. Barr.
  • Fed’s J. Powell testifies and M. Daly speaks on March 6.
  • Fed’s J. Powell testifies on March 7.
  • On February 29 will speak, Fed’s R. Bostic, A. Goolsbee and L. Mester.
  • Fed’s J. Williams is also due on March 8.

Central Banks: Upcoming Meetings to Shape Monetary Policies

  • The Malaysian central bank (BNM) meets on March 7 and is expected to leave its policy rate unchanged at 3.00%.
  • No surprises are expected at the ECB event on March 7.

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