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Forex »Next week from November 21 to 26, 2021

RBNZ and coronavirus reappearance to be monitored during shortened trading week

With inflation data still current in the markets, forex traders this week will be on the lookout for any signs of a slowdown.

Volatility returned to the currency and financial markets thanks to continued spikes in “transient” inflation readings around the world. This week, the RBNZ will be the first of the major central banks to discuss how they cope with continued rising inflation. In addition, Austria becomes the first country in Europe not only to return to the total lockdown due to the coronavirus, but also the first to force its people to get vaccinated! Germany may be the next to be quarantined, but will they need court orders? Plus, it’s time for US President Joe Biden to elect the new Fed Chairman. Will it be Jerome Powell or will it be Lael Brainard? Thursday is a legal holiday in the United States and Friday is noon. As a result, markets will be slower than usual and US data will load before Wednesday.

RBNZ

The RBNZ will meet on Wednesday to discuss rising inflation and how it should be addressed in New Zealand. Expectations are for a 25 bp increase. The central bank said at the last meeting that it expects inflation to rise to around 4% in the short term, before falling back to 2% in the medium term. Last week showed that business inflation expectations for the fourth quarter reached 2.96% compared to just 2.4% and 2.27% for the third quarter. Additionally, earlier this month, New Zealand’s third quarter employment change was + 2% versus + 0.4% expected. The unemployment rate fell from 3.9% to 3.4%. New Zealand retail sales are expected to come out this week ahead of the RBNZ meeting. Expectations for the third quarter are -0.5% compared to + 3.3% in the second quarter. There seems to be little doubt that they will increase, but the more important question is: will they increase by 25 or 50 basis points?

Coronavirus

The coronavirus is returning to Europe. Austria, Germany, the Czech Republic, the Netherlands and Belgium are at their highest level of new daily cases. Austria has become the first country in Europe to re-impose the blockade. The country will be confined until December 13. Furthermore, Austrian Chancellor Schallenberg went so far as to say that everyone should be vaccinated before February 1, 2022. Germany may not be left behind. They said they would make action decisions as hospitalization rates reached certain thresholds. They also went so far as to say that national confinement cannot be ruled out, both for the vaccinated and for the unvaccinated! However, the question remains whether they will make vaccinations mandatory.

ECB President Christine Lagarde has hit this chart all week saying that inflation is transitory and that it will not be necessary to raise rates next year because people are still suffering from the coronavirus. If the “new variant delta variant” continues to spread, it may help your case. The euro rose from just over 1.1600 to 1.1250 in the currency market against the American dollar over the past 2 weeks as markets raised expectations of a rate hike in the US and rejected expectations of a rate hike in Europe. Additionally, crude oil fell nearly 6% last week as fears of lower oil demand crept into markets. This is the biggest weekly drop since the week of August 16.

Powell or Brainard

The president of the United States, Joe Biden, is about to elect his new chairman of the Federal Reserve. And by all accounts, there are only 2 finalists left: current Fed Chairman Jerome Powell and Federal Reserve member Lael Brainard. If Jerome Powell is selected, the markets are unlikely to react much. Jerome Powell has previously laid out a plan for the Fed to cut bond purchases by $ 15 billion per month, through June 2022. Powell has said nothing to suggest he would change that outlook. However, several board members said that due to rising inflation, it is possible to accelerate the pace of reduction. This would allow the date of the first rate hike to be brought forward. Markets are currently anticipating a rate hike beginning in June 2022. FOMC minutes are due to be released on Wednesday. This can provide more clarity on the Fed’s views.

On the other side is Brainard, whom the markets have called a dove. This means that traders would expect rates to remain low for a longer period. What will happen to the markets if Brainard is selected? The initial reaction may be a surge in stocks and a weaker US dollar. However, the mantra that markets lived through from the start of the pandemic until this summer was that the bad data was good because it meant more stimulus from the Fed. Since the summer, higher inflation readings have started to change this. vision, as markets have begun to fear that stagflation is setting in. The question that remains to be seen with Brainard is, how will he react to rising inflation and a possible slowdown in growth? Will bad data ever be good for the markets again? With this uncertainty surrounding it, stocks could slide until traders become familiar with their reaction.

Trading results

The earnings season is almost over. However, there are still a few big names to watch out for this week. They are: ZM, MDT, DELL, HPQ, GPS, DE, PDD

* To trade US and Canadian stocks on the stock exchange with a licensed and regulated Canadian broker, here is $ 50 for your first trade costs. ” view the offer

Economic data

Although it will be a short week for many traders, that does not mean that there will be no economic data. On Tuesday, the markets will get their first look at manufacturing and services PMIs for November, as well as third-quarter New Zealand retail sales data. On Wednesday comes the US data dump ahead of the 2-day holiday (US markets have half a day on Friday, but it will probably be slow). Durable goods, personal income and expenses, basic PCE and second quarter GDP snapshot highlight the day. Additionally, the FOMC minutes from the last meeting will be posted at 2:00 pm ET for those who have not yet left for the weekend. Other important economic data that will be released this week are the following:

Monday – October 22, 2021

UK: CBI Industrial Trends Orders (NOV)
EU: Flash on Consumer Confidence (NOV)
United States: Existing Home Sales (OCT)
United States: 2-year banknote auction
United States: 5-year banknote auction
New Zealand: Retail Sales (Q3)

Tuesday – October 23, 2021

Global: Flash Manufacturing PMI (NOV)
Mondial: PMI Flash Services (NOV)
UK: CBI Distributive Trades (NOV)
United States: 7-year ticket auction
Japan: Flash Manufacturing PMI (NOV)
Japan: PMI Flash Services (NOV)
New Zealand: RBNZ Interest Rate Decision

Wednesday – October 24, 2021

Germany: Ifo business climate (NOV)
Mexico: inflation rate in the middle of the month (NOV)
United States: Durable Goods Orders (OCT)
United States: second estimate of the GDP price index (third quarter)
United States: PCE Price Index (OCT)
United States: New Home Sales (OCT)
United States: Personal Expenses (OCT)
United States: Personal Income (OCT)
United States: Michigan Consumer Sentiment Final (NOV)
United States: FOMC Minutes
Crude stocks
New Zealand: Trade Balance (OCT)

Thursday – October 25, 2021

Germany: GfK Consumer Confidence (DEC)
Germany: Final GDP growth rate (third quarter)

Friday, October 26, 2021

New Zealand: ANZ Roy Morgan Consumer Confidence (NOV)
Australia: Preliminary Retail Sales (OCT)
UK: House Prices Nationwide (NOV)

Watch ” ECONOMIC CALENDAR

Weekly Forex Chart »USD / TRY

forex usd / try 21112021

As with most forex charts this week, we are often at a loss for words after the previous week’s move. The USD / TRY pair is no different after a parabolic move and a 12.34% rise in forex during the week, from Monday’s open at 10.0043 to Friday’s close at around 11.2391. Once the price got above 9.00, we wondered how long it would take to get above 10.00 and then how long it would take to get to 11.00. I’m going to ask you the question you are thinking about now: how long will it take you to arrive at 12.00? It’s a guess, but it’s hard to go against a motion when it is in parabolic motion! The CBRT cut rates by 100 basis points last week and said it would re-evaluate its rate cut decisions in December. Yet as long as Erdogan makes the decisions for CBRT, many expect the cuts to continue. The next round psychological number of 12.00 is the next resistance level. Support: last week’s low at 9.9554, then horizontal support just below 9.8486. Below is an uptrend line that the pair crossed during the week of October 11 near 9.2875. If Erdogan makes less conciliatory comments on interest rates, expect the pair to pull back aggressively. Also, keep an eye out for the activation of the stop loss if any sellers enter, which could send the pair back to the lows for the week!

With inflation data still prevailing in the markets, this week’s forex traders will be on the lookout for any signs of a slowdown. The RBNZ will give the markets some direction, but traders are well aware of its aggressive attitude. Also, keep an eye out for signs of a reappearance of the coronavirus in other areas, particularly Europe, and what the responses will be. Also, see the selection of the new US Fed Chairman this week and how the markets react.

Remember that the US markets are closed on Thursdays and have half a day on Fridays.

By Joe Perry, Forex.com » Official site

Disclaimer: The information and opinions contained in this report are provided for general information only and do not constitute an offer or solicitation regarding the purchase or sale of currency exchange contracts or CFDs. Although the information contained in this document has been taken from sources considered reliable, the author does not guarantee its accuracy or completeness, and does not assume responsibility for any direct, indirect or consequential damages that may result from the fact that someone trusts such information.

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