Market Caution Despite Quiet Close: Financial markets ended the week on a subdued note, but traders anticipate increased volatility ahead. Key inflation data releases and central bank pronouncements are likely to stir things up.


Yen Nears Critical Level:

The Japanese Yen weakened further and is nearing the psychologically important level of 160 yen against the US dollar. Intervention by Japanese authorities is a possibility if it depreciates further, potentially causing a more active start to the week.

US PCE Data Takes Center Stage:

The US Personal Consumption Expenditures (PCE) Price Index is the most anticipated economic indicator of the week, but other events can influence markets before then.

Day to Day Breakdown:

  • Monday:
    • A relatively quiet day with no major events in Asia.
    • The German Ifo business climate index and a speech by Federal Open Market Committee (FOMC) member Christopher Waller are highlights in the European session.
    • Later, Bank of Canada Governor Tiff Macklem’s speech might impact the Canadian dollar (Loonie).
  • Tuesday:
    • The first half is light on market-moving events.
    • However, the release of Canadian Consumer Price Index (CPI) data in the New York session could trigger volatility.
    • The US Consumer Confidence and Richmond Fed Manufacturing Index reports also land on Tuesday.
  • Wednesday:
    • Australian markets will be in focus with the release of their key CPI figures.
    • The European session lacks significant events, but the US unveils New Home Sales and Crude Oil Inventory data later.
  • Thursday:
    • The Asian session is quiet, but European traders will be attentive as Bank of England Governor Andrew Bailey speaks about the Financial Stability Report.
    • The US session is packed with data releases, including Quarterly GDP, Durable Goods Orders, Final GDP, and Pending Home Sales figures.
  • Friday:
    • The initial focus in Asia shifts to Japan’s Tokyo CPI data.
    • Spanish Flash CPI might cause euro fluctuations in the European session, but the main event occurs in New York with the release of the Core PCE Price Index.
    • Other data points for traders to consider before the weekend include Canadian GDP figures and revised University of Michigan data.
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