Markets closed the week with sentiment pushing higher on Friday as President Trump again advised that a peace deal with Iran will be signed by the end of this weekend. This came as sentiment had pushed back and forth over the course of the week; however, investors feel that we may be approaching a conclusion this time, with the Iranian Foreign Minister confirming that some details had been agreed.
Geopolitics in general, and the war in the Middle East specifically, are likely to dominate sentiment in the early part of the week ahead. However, as the week progresses, focus will switch to a heavy central bank schedule, with several major players set to announce interest rate decisions, including the Federal Reserve, which should see fundamentals become more impactful. UK markets feature heavily as we move through the week, with some key data due out along with the Bank of England’s rate call.
Here is our usual day-by-day breakdown of the major risk events this week:
It is a quiet start to the calendar on Monday in what will be a busy week, with geopolitical updates likely to again dominate sentiment for the first few sessions. We do hear from ECB President Christine Lagarde during the London session; however, again, expect news to drive flow.
The central bank updates kick off with a bang on Tuesday in the Asian session, with both the Bank of Japan and the Reserve Bank of Australia set to announce rate decisions during the day. There is little else on the calendar for the latter two sessions, but expect volatility from the Bank of Japan update, especially in the yen, to continue through the day.
The Asian session is relatively quiet on Wednesday; however, sterling markets will come into focus on the London open, with the key UK CPI data due out. The New York session sees the release of the US Retail Sales data; however, the major event of the day comes close to the end of the session with the Federal Reserve Bank’s interest rate update.
New Zealand markets will be in focus early in the Asian session on Thursday, with quarterly GDP data due out. The European session is extremely busy later in the day, with key UK employment data out early in the piece before interest rate updates from both the Swiss National Bank and the Bank of England. The New York session features the release of the Philly Fed Manufacturing Index data and the Weekly Unemployment Claims numbers.
Liquidity will be reduced during the trading sessions on Friday, with both Chinese and US markets on holiday at either end of the day. Retail Sales numbers are due out of both the UK and Canada later in the day, which should see moves in local markets; however, expect geopolitics to again play a part in the final trading sessions of the week.
