The week ahead 22-26 February 2021

KEY POINTS

• It’s a busy day ahead in the markets with the economic calendar full of key events.
• Interest rate decisions, government speakers, and labor markets data to be in focus.
• The global vaccination progress, U.S stimulus, and coronavirus headlines will continue to influence the markets. 

The markets will enter another busy week ahead, with big events on the economic calendar expected to have an influence on the market’s movement. The focus will be on the interest rate decision, U.S GDP, Boris Johnson, and labor market data

U.S Dollar;

It is relatively a quiet week in the markets ahead for the U.S Dollar with the economic calendar showing fewer fundamental events that could move the markets.

The markets will have to wait until Thursday for fundamental key events that could provide influence to the U.S markets.

Thursday, the U.S markets will wait for the Durable goods orders, GDP data, labor market data, and the nondefense capital goods orders which could have a great impact on the market.

The U.S jobless claims will be watched an increase in the recent data figures which saw the U.S futures including the Dollar index trading lower. Should the numbers continue to show an increase, the U.S markets will continue to be affected.

The U.S political headlines about the stimulus package and vaccination scheme will be the key interest in the Markets.

Euro;

It’s a very quiet week ahead for the Euro currency and the European markets with the economic calendar having fewer key economic events that could influence the market movement.

On Monday, investors in Europe will the Germany IFO Business climate data that could have an influence on the Europeans. The data showed a slight drop in the previous figures for December. Investors expected the data to show a slight recovery, should the data manage to beat expectations. We expect to see a reaction to the DAX30 index.

Tuesday the focus will be on the Eurozone inflation data and Wednesday the focus will shift to the GDP figures for Germany.

Thursday, the markets will focus on Germany consumer confidence.

Pounds;

It’s a fairly busy week ahead for the Pounds with the market set to focus on the Speech by Prime minister Boris Johnson and labor market figures which could influence the market throughout the week.

The markets will on Monday hear a Speech from Prime Minister Boris Johnson. We expect to hear remarks on the progress of the vaccination scheme, the economic outlook of the U.K, and the way forward on the current lockdown restrictions.

On Tuesday, the focus will shift to the employment change figures ND Claimant count change that could influence the market. We do not expect any positive outcome from the data considering the lockdowns in the U.K which has affected many businesses.

The markets will most likely be moved by the Prime Minister’s speech on Monday.

Aussie Dollar;

The markets are quiet in Australia in the week ahead with the economic calendar having no fundamental events that could provide volatility to the market.

The Australian will continue to monitor the global equities market and the movement from U.S markets for direction.

The Australian stock markets closed the week on massive losses following an overnight selloff at wall street as U.S initial jobless claims rose more than expected, with the investors worried about the economic recovery. 

Loonie

It’s fairly a quiet week ahead for the Canadian dollar with the economic calendar also quiet for most of the week.

Traders will focus on the BoC Governor Macklem speech on Tuesday. The speech is expected to influence the Canadian Dollar ahead of a quiet week.

We expect the Governor to make remarks on the monetary policy and the economic status of the country.

Kiwi Dollar

It’s relatively a busy week ahead for the New Zealand Dollar with the Central bank speaker and interest rate decision expected to influence the market movement.

On Monday, the Kiwi will focus on retail sales. A better-than-expected reading will have a positive impact on the markets.

On Wednesday, the investors will wait to hear the interest rate decision and later listen to the RBNZ press conference.

We expected to see the RBNZ keep the interest rate unchanged and to hear about the way forward ahead of the expected economic recovery.

Geo-Politics;

• The investors will continue to bet on more fiscal stimulus measures with negotiations currently underway. The markets will continue to follow the headlines that could either have negative or positive movements for the U.S futures. The SP500 and NASDAQ futures have already made an unexpected selloff this week. Any positive headlines from Washington will most likely move the markets.
• The vaccination process will continue to be the many focus as investors monitor the progress of the vaccine rollout and the Coronavirus trend to continue showing a further drop in the number of hospitalizations.
• The commodity markets are expected to be entering a super-cycle movement and investors will continue to monitor the upside movement. The Crude oil price has already hit a pandemic high of 62$ before a selloff to test the $59 level.

Corporate news

• On Monday, investors will be watching the Apple general meeting.
• Royal Bank of Canada set to release its Q1 earnings for 2021

Lulama Msungwa

Research & Markets Analyst

Scope Markets