Once again, the conflict in the Middle East looks set to take centre stage for traders early in the week after the US joined Israel in striking at Iranian nuclear facilities over the weekend.
It could be a very lively week ahead with a strong mix of central bankers speaking in the coming sessions, as well as some key data updates from the US and other major economies, in addition to trade updates and escalating conflict in the Middle East.
Traders are expecting the conflict to dominate sentiment in the early part of the week; however, both central bank updates and data could see the tide turn as we progress through the trading calendar.
Here is our usual day-by-day breakdown of the major risk events this week:
Asian markets are likely to have a lively start on Monday as investors price in the latest developments in the Middle East, with ‘gapping’ expected on the open, particularly in Oil, Gold, and other haven assets. Data releases will drag some attention later in the day for traders, with a raft of Flash Services and Manufacturing PMI due out across jurisdictions including Australia, France, Germany, the EU, the UK, and the US. We are also set to hear from several Fed members across the course of the day, including Waller, Bowman, Goolsbee, Kugler, and Williams, but most traders are expecting geopolitical updates to dominate sentiment.
The Asian session looks relatively quiet on Tuesday, but things look set to liven up once Europe opens. The German IFO Business Climate data is due out early in the day before key Canadian CPI numbers are released shortly after the New York open. There are more updates from key central bankers, including the Bank of England’s Governor Andrew Bailey when he speaks in front of the House of Lords, and the Federal Reserve’s Chairman Jerome Powell when he testifies in front of the Senate with the Monetary Policy Report. US CB Consumer Confidence and Richmond Manufacturing Index data sets are also scheduled for release.
Wednesday looks quieter across all sessions; however, there will be an early focus on Australian markets when the latest CPI data is released early in the session. There is little on the cards in Europe, and we again hear from the Fed Chair in the US session; however, the major impact from this testimony usually comes on day one. US New Home Sales numbers are also out later in the day, along with the weekly US Crude Oil inventory data.
The Asian session is quiet on Thursday with nothing of note scheduled during the session. The London session will see the focus back on UK markets as we again hear from Bank of England Governor Andrew Bailey, this time when he speaks at the British Chamber of Commerce Annual Conference. It is a busy US data day with some key updates due out early in the New York session, with GDP data, Durable Goods numbers, and the Weekly Unemployment Claims figures all out at the same time. These are then followed by the Pending Home Sales numbers.
Friday is slightly quieter on the calendar, although it does feature the most impactful number of the week later in the day. Inflation data is in focus across all three sessions, with Tokyo Core CPI numbers out in Asia, Spanish Flash CPI in Europe, and the key US Core PCE Price Index update in the New York time zone. Canadian GDP numbers are also out at the same time as the Fed’s favourite inflation indicator, but expect the US number to dominate investor focus.
