Jawboning is likely to be the dominant influence this week.
USD: President Trump will be addressing Congress on Tuesday at 9PM EST and while influential, it’s not clear what the tone will be. The Fed has work to do, in order to convince markets that March is live. During the week we get speeches from FED’s Kaplan (Mon), Williams, Bullard. On Friday FED’s Yellen speaks before the Executives Club of Chicago & FED’s Fischer speaks in New York (12.30 PM EST), while FED’s Evans, Mester & Lacker follow. On the data front we have Durable goods (Mon), GDP (Tue), ISM (Wed & Fri).
EUR: Market jitters surrounding upcoming European elections remain at the forefront of market concerns. Focus will be on CPI (Thur), GER Unemployment & CPI (Wed) and EU Services PMI & Retail Sales (Fri).
GBP: This week’s House of Lords committee stage examination of the ‘Brexit’ Bill and Northern Ireland Assembly elections are not expected to derail the UK government’s timetable to activate Article 50 by the end of March. As such, PMIs (Wed-Fri) could be more influential.
CAD: The Loonie will be influenced by earnings reports, but mainly by the BoC (Wed) & GDP (Thurs). Expect a generally dovish tone from the BoC’s statement, as nothing much has changed since the last meeting.
Asia: China PMIs for manufacturing and services sectors as well as the composite PMIs will be released along with Caixin manufacturing PMI (Wed).
We also get Q4 GDP from Australia (Wed) and before that, NZD Trade Balance & ANZ business confidence (Mon/Tue).
Going into the week, I remain cautious and expect conditions to be tricky. As of Friday’s close we seem to have some risk-aversion creeping through the markets, keeping Gold & Silver bid & the Jpy currencies sold. It is yet to be seen if this will continue into the new week.