Markets are still driven by the geopolitical situation in Ukraine. Energy prices, for example, are sky high, which, in turn, affected the political decisions of many world leaders. Of course, this is only the beginning of a change in the global economic and political vector, which is already having a strong impact on the value of commodity and raw material assets.
Of the important events in the coming week, the most noteworthy are the data on EU consumer inflation, US employment data from ADP and the employment report in the US non-farm sector from the Ministry of Labor. Markets will also focus on the average hourly wage in America, the index of business activity in the manufacturing sector and the core price index for personal consumption expenditure, which is an important component of consumer inflation and has always been taken into account in Fed decisions on interest rates.
But back to the situation in the markets, Asian markets traded broadly in red territory this morning ahead of the opening of trading in Europe. Futures for major European stock indices are also in the "red", along with the futures for US stock indices. It seems that in anticipation of the important economic data this week, stock markets in both Europe and the US declined.
In the Forex market, the ICE dollar index received support and tested the recent local highs, approaching the 100-point mark.
Considering all this, it is likely that volatility will be high in the coming week. If the data on EU consumer inflation show growth again, the ECB may decide to start raising interest rates, which may ultimately cause a local rally in euro. At the same time, weak data from the US labor market and production figures may cause a new wave of correction in the US stock market, which will indirectly have a negative impact on all markets.
Forecasts for today:
EUR/USD fell below 1.1000. It may continue to ditp to 1.0945 amid decreased risk appetite.
USD/JPY rose above 123.00 and may continue growing towards 125.75.