Market Crash Incoming?
Information is not investment advice
This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
US Federal Funds Rate
February 1, 21:00 GMT+2.
The US Federal Reserve will make a statement and release a Federal Funds Rate on February 1, 21:00 GMT+2. The FOMC usually changes the statement slightly at each release. Investors watch closely after these changes each time to get an idea of the next rate decision. As inflation is cooling down, every dovish statement is a solid bullish sign for risky assets and gold.
On the other hand, the USD may plunge even more if Fed hints at monetary easing soon. Also, traders should be careful as Federal Reserve insists on tightening throughout 2023. This time, the world expects Fed to make a 25-basis-point hike.
- In case of hawkish comments and an expected hike, the USD may rise.
- Otherwise, the USD will plunge.
EU Refinancing Rate
February 2, 15:15 GMT+2.
The European Central Bank will release Main Refinancing Rate and make a Monetary Policy Statement on February 2, 15:15 GMT+2. It’s the primary tool the ECB uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision.
Inflation in the EU is going non-stop, and the bank’s primary goal is to slow down rising prices. Most likely, the ECB will remain hawkish, thus, boosting the EUR.
- More hawkish comments than expected will help the EUR to rise.
- Otherwise, EUR may fall.
February 3, 15:30 GMT+2.
The US Bureau of Labor Statistics will release the Non-Farm Employment Change, Unemployment Rate, and Average Hourly Earnings on February 3, 15:30 GMT+2. All three releases are vital for investors as it’s the primary economic data for the US Federal Reserve. A strong labor market will signal Fed that it may continue tightening the monetary policy and pressing on the economy.
On the other hand, a weak labor market would mean the economy is cooling down, and Fed may act more dovish, thus pushing the USD down and boosting gold.
- If NFP data is higher than expected, XAUUSD may fall.
- Otherwise, XAUUSD may rise.
A new trading week is coming…
Here is the digest with the most interesting news for today