This week, the war will be the deciding factor of market sentiment, but we also have a packed schedule of economic data releases and speeches from central banks and leaders. Expect a very choppy few days ahead.
USD will remain on top as a key global reserve and hedge against volatility. YEN and CHF are also safe bets.
EURO may suffer further with war officially on the continent. GBP looks steady but may start to weaken as the UK struggles with decade-high inflation paired with rising oil prices from the breakout of war. The Bank of England’s confidence to raise interest rates this March may have taken a rattling, so we can expect that a minor increase of 0.25pts is in play.
The sentiment is firmly in the “Risk Off” mode. Oil will likely continue to rally this week so too will Gold as investors look for safe bets. After a significant crash last week, Crypto may see some upside if Russia is forced to use blockchain as a SWIFT alternative.
What to watch
Outside of war, we have the following events to keep an eye on:
Monday
EUR ECB’s President Lagarde speech
USD Chicago Purchasing Managers’ Index(Feb)
Tuesday
EUR ECB’s President Lagarde speech
EUR Harmonized Index of Consumer Prices (YoY)(Feb) PREL
USD ISM Manufacturing PMI (Feb)
Wednesday
EUR HICP (YoY)(Feb) PREL
USD Fed’s Chair Powell testifies
USD ADP Employment Change(Feb)
Thursday
USD Fed’s Chair Powell testifies
USD ISM Services PMI(Feb)
Friday
EUR Retail Sales (YoY)(Jan)
USD Nonfarm Payrolls(Feb)