The month's last trading day is here, and no important economic events are due. However, the week ahead is full of macro-events to move financial markets, such as three central banks announcing their policy decisions, and the NFP report scheduled for next Friday.
The Australian dollar traders are on high alert since the Reserve Bank of Australia is scheduled to release its monetary policy tomorrow. Markets have priced in several hikes from the RBA.
However, the central bank's narrative was rather dovish, as the Australian economy is affected by the Chinese zero-covid policy. Therefore, the forward guidance from the RBA is more important for the Australian dollar than the actual interest rate decision.
While the RBA is not expected to move the cash rate, the Bank of England will likely hike at its next Thursday meeting. A 25 basis points rate hike is priced in, and so the British pound traders are on the lookout for the Bank of England's guidance regarding future rate hikes.
On the same day as the Bank of England, the European Central Bank will hold its press conference and present its own monetary policy statement. This is one central bank in no hurry to raise the rates, which is extraordinary to consider in a rising inflation environment; the ECB holds the deposit facility rate below zero.
Big Tech Giants to Report Quarterly Earnings This Week
The week ahead is full of major US corporations presenting their Q4 2021 earnings (with the exception of Qualcomm that will present its Q1 2021 report). Here are some names to consider as their earnings may trigger important swings in the equity market:
- Alphabet – January 31, 2022
- Facebook –February 1, 2022
- Amazon – February 2, 2022
- ExxonMobil – February 1, 2022
- Eli Lilly – February 3, 2022
- Qualcomm – Q1 2021 earnings – February 1, 2022
- Honeywell – February 2, 2022
- Ford – February 3, 2022
All in all, volatility is set to rise this week as momentum builds up for the NFP report release on Friday. Further improvements in the unemployment rate should make the Fed set foot on the path of more aggressive tightening.