In a week filled with crucial economic releases and central bank announcements, several key events are expected to steer market sentiment. On January 30, the Bank of England (BoE) will release data on Mortgage Approvals and M4 Money Supply, setting the stage for potential shifts in monetary policy. Meanwhile, the European Central Bank (ECB) is poised to make an interest rate decision, which is anticipated to be the highlight of the day. Across the Atlantic, the United States will keep investors on edge with a slew of economic data, including the publication of inflation figures tracked by the Personal Consumption Expenditures (PCE) on January 31. Additionally, Federal Reserve Governor Michelle Bowman is scheduled to deliver a speech on the same day, further adding to the mix of influential factors shaping market dynamics.
The week kicks off with the release of the final Coincident and Leading Economic Indexes in Germany on January 27. These indicators will provide insight into the country's economic health, followed by the IFO Business Climate assessment. As Europe gears up for significant central bank actions, the ECB's M3 Money Supply report is expected on January 29, offering a glimpse into monetary conditions within the region.
On January 28, attention turns to the United States with a variety of economic indicators slated for release. These include Durable Goods Orders, the Federal Housing Finance Agency's (FHFA) House Price Index, the Conference Board's Consumer Confidence figures, and the Richmond Fed Manufacturing Index. These reports will offer a comprehensive view of economic activity across various sectors.
As the week progresses, focus shifts back to the Eurozone, where the ECB's interest rate decision on January 30 is anticipated to be a pivotal event. The decision will be closely scrutinized, as it may signal potential shifts in monetary policy in response to evolving economic conditions. Concurrently, in the UK, data on Mortgage Approvals and M4 Money Supply from the BoE will offer insight into domestic financial conditions.
The United States will continue to capture attention with several key data releases on January 31. Investors will closely monitor inflation data tracked by the PCE index, providing a crucial gauge of price pressures in the economy. Federal Reserve Governor Michelle Bowman's speech on the same day is expected to offer further insights into the central bank's stance on monetary policy. In addition, Germany will release its Retail Sales figures, labor market report, ECB's Survey of Professional Forecasters (SPF), and advanced Inflation Rate.
Currency markets have experienced notable movements amid these developments. The US Dollar (USD) has retreated from its mid-January cycle highs, with the US Dollar Index (DXY) breaking below key support at 107.00 to reach new five-week lows. In contrast, both EUR/USD and AUD/USD have shown resilience. The EUR/USD pair has extended its recovery from recent cycle lows, surpassing the 1.0500 barrier to reach five-week highs. Similarly, AUD/USD has climbed above the 0.6300 level, marking new five-week peaks and further distancing itself from recent lows near 0.6130.
In commodities, gold prices have maintained a bid tone near their record highs at the end of the week. This sustained interest reflects ongoing investor demand for safe-haven assets amid uncertainties surrounding global economic conditions.