January 28, 2023

FED rates hike and NFP in the spotlight

LQDFXperts Features | FED rates hike and NFP in the spotlight

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A FED rates hike is widely expected for a fourth time at the conclusion of the central bank’s FOMC meeting on Wednesday.

As the battle against sky-high inflation continues, the Federal Reserve attempts to cool the economy.

The US central bank has raised its benchmark federal-funds rate by 0.75 percentage points at its past three meetings. So, analysts believe that it is likely to do so again in its November meeting.

Earnings season at the halfway marks the week ahead. So, the results will show whether U.S. equities can continue with disappointing corporate results.

Two hundred sixty-three of the S&P 500 have already reported, and more than 150 S&P 500 companies are due to report quarterly results in the coming week.

In addition to the FOMC decision, traders will closely monitor the nonfarm payroll report. The tone of Wednesday’s Fed press conference and Friday’s October U.S. nonfarm payrolls report will be vital in setting expectations ahead of the central bank’s December meeting.

Analysts expect the Labor Department to report that the U.S. economy added 200,000 jobs last month, compared with 263,000 in September, while annual growth in average hourly earnings is also expected to moderate.

Data on Friday showed that U.S. labour costs increased solidly in the third quarter. Still, private sector wage growth slowed considerably, indicating that inflation had either peaked or was close to doing so.

FED rates hike and NFP in the spotlight – What else?

Apart from the FED rates hike on Wednesday, the Bank of England will probably deliver jumbo 75-basis-point rate hikes on Thursday.

At its previous meeting, the central bank raised rates for the seventh consecutive time.

But with investors now on the lookout for signs that aggressive monetary tightening could slow, Friday’s U.S. jobs report for October will be in the spotlight.

Finally, worldwide manufacturing and services PMIs will be released in the coming week following the October flash PMI updates.

Other key economic events to follow: 

Tuesday 1 November

Philippines Market Holiday

Worldwide Manufacturing PMI Surveys* (Sep)

United States ISM Manufacturing PMI (Oct)

United States JOLTS Job Openings (Sep)

Wednesday 2 November

Japan BOJ Meeting Minutes (Sep)

Germany Trade (Sep), Unemployment (Oct)

Eurozone S&P Global Manufacturing PMI* (Oct)

Thursday 3 November

Japan Market Holiday

Worldwide Services & Composite PMI Surveys* (Sep)

Australia RBA Meeting Minutes (Nov)

Eurozone Unemployment Rate (Sep)

United Kingdom BOE Bank Rate (Nov)

United States Initial Jobless Claims

Friday 4 November

Eurozone S&P Global Services and Composite PMI* (Oct)

United States Non-Farm Payrolls, Unemployment, Average Earnings (Oct)

Canada Unemployment Rate (Oct)

For more economic events, watch our Economic Calendar

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*PLEASE NOTE The information above is not investment advice.

Sources: Reuters, Investing, CNN money