As we step into the first full trading week of February, global markets are bracing for a volatile period, driven by significant geopolitical and economic developments. Over the weekend, the global trade landscape took a dramatic turn, with President Trump announcing fresh tariffs on key trading partners. The U.S. has imposed a 25% tariff on Canadian and Mexican imports and a 10% tariff on Chinese goods, triggering retaliatory measures from all three nations. These decisions are expected to have far-reaching consequences, with traders closely monitoring market reactions at the Monday open.
Alongside these geopolitical tensions, the economic calendar is packed with crucial data releases, particularly those tied to U.S. employment figures. Additionally, market participants will keep a close eye on the Bank of England’s interest rate decision, which could set the tone for GBP trading this week. Below is a detailed breakdown of major market-moving events scheduled for the upcoming week:
Monday, February 3, 2025
- Markets are expected to open with significant volatility as investors react to the latest trade war developments.
- Chinese markets remain closed for the Lunar New Year holiday, delaying their response to the tariff announcements.
- Asia: Australia’s Retail Sales figures will be released early in the session.
- Europe: Eurozone Consumer Price Index (CPI) figures will be released at the European open.
- U.S.: The key data release of the day is the ISM Manufacturing PMI, expected in the early U.S. session.
- Market sentiment will likely be dominated by the ongoing analysis of the newly announced trade tariffs and potential implications for the global economy.
Tuesday, February 4, 2025
- A relatively quiet macroeconomic calendar during the Asian and European sessions.
- U.S.: The first major employment-related release of the week—JOLTS Job Openings—will be released in the New York session.
- Federal Reserve members Raphael Bostic and Mary Daly are scheduled to speak later in the session, potentially offering insights into the Fed’s policy stance amid growing economic uncertainty.
Wednesday, February 5, 2025
- Asia: Key New Zealand employment figures are set for release in the early session.
- European trading hours are expected to be uneventful, with no major data releases scheduled.
- U.S.: The second major employment indicator of the week, the ADP Non-Farm Employment Change report, will be released in New York.
- Additional market-moving data includes ISM Services PMI figures and the U.S. Crude Oil Inventory report, both of which could influence equity and commodity markets.
Thursday, February 6, 2025
- New Zealand: Markets will be closed in observance of Waitangi Day.
- Asia: A light economic calendar with minimal significant releases.
- Europe: Market focus shifts to the United Kingdom, where the Bank of England is set to announce its latest interest rate decision following the release of the Construction PMI report.
- U.S.: Key data releases include the weekly Unemployment Claims report and the Canadian Ivey PMI.
- Federal Reserve members Christopher Waller and Mary Daly are scheduled to speak, potentially providing further clarity on the Fed’s outlook.
Friday, February 7, 2025
- A classic Non-Farm Payrolls (NFP) trading day, with minimal scheduled data releases in Asia and Europe.
- U.S.: The highly anticipated Non-Farm Payrolls report will be released, alongside Average Hourly Earnings and the Unemployment Rate. These figures will be closely scrutinized as they provide key insights into the labor market and the Fed’s next moves.
- Canada: Employment data will be released at the same time as the U.S. labor report, adding another layer of market volatility.
- U.S.: The week concludes with the Preliminary University of Michigan Consumer Confidence and Inflation Expectations reports, which could further influence sentiment in the final trading hours.
Final Thoughts
This week presents a mix of heightened geopolitical risks and crucial economic data releases. The evolving trade war narrative, combined with key employment statistics and central bank decisions, sets the stage for potential market swings across multiple asset classes. Traders should remain vigilant, as unexpected developments could lead to rapid shifts in sentiment. Stay tuned for daily updates as we navigate what promises to be an eventful week in the financial markets.
