Events to Look Out for Next Week

The  BoC and RBA policy meetings are the central bank highlights this week in the wake of rising inflation and concerns over supply chain disruptions and the developing situation in the Ukraine and the escalation of tensions between the West and Russia. The war in Ukraine and the impacts on energy and other commodity prices, should keep prices elevated and further delaying the anticipated softening in inflation (“transitory”). These factors will keep the markets volatile next week as the new month kicks-off. On top of all this, the new month heralds a heavy dose of global data releases including GDP’s, PMI’s, US ADP and NFP data .

Monday – 28 February 2022

Retail Sales (AUD, GMT 00:30) – The Retail Sales are seen at a 0.4% January rise from contraction at -4.4% m/m.
Gross Domestic Product (CHF, GMT 08:00) – GDP is the economy’s most important figure. The final Q4 GDP for Switzerland is expected to grow at 0.4% q/q from 1.7% q/q, with headline at 1.7% y/y from 4.1% y/y.

Tuesday – 01 March 2022

Caixin Manufacturing PMI (CNY, GMT 01:45) – The manufacturing number is expected to rise slightly in February to 49.5 from 49.1, but holds below the key 50.00 pivot point.
Interest Rate Decision & Statement (AUD, GMT 03:30)According to a Reuters poll, RBA will raise interest rates for the first time in over a decade in the Q3, slightly earlier than thought a month ago, by year-end at 0.50%, up from 0.25% previously. Hence no action is expected in March.
Gross Domestic Product (CAD, GMT 13:30) – GDP is the economy’s most important figure. The December’s GDP for Canada is expected to grow at 0.3% m/m from 0.6% m/m.
ISM Manufacturing PMI (USD, GMT 15:00) – The ISM index is expected to rise to 58.0 from 57.6 in January, compared to an 18-year high of 63.7 in March, an 11-year low of 41.6 in April of 2020, and an all-time low of 30.3 in June of 1980.

Wednesday – 02 March 2022

OPEC-JMMC Meetings
Gross Domestic Product (AUD, GMT 00:30) – GDP is the economy’s most important figure. The Q4 GDP for Australia is expected to grow at 0.5% q/q from -1.9% q/q, with headline at 4.8% y/y from 3.9% y/y.
ADP Employment change (USD, GMT 13:15) – The private payrolls report is expected to show a rise to 328,000 from a -301,000 drop in January. Although the link to the NFP data is clearly now broken many traders will still be focused on the size of the decline in private payrolls.
Interest Rate Decision & Statement (CAD, GMT 15:00) The bank is expected to hike rates by 25 bps and signal that more tightening is ahead this year. The further climb in total CPI this January to a 5.1% annual rate (nsa), marking the fastest pace in 31-years, added to the case for a forceful increase in rates this year. We see at least five rate hikes of 25 bps each in 2022, with scope for six moves. As for the timing, we currently pencil in three to four back to back 25 bp hikes before a brief pause in order to judge the impact (seven announcement dates remain this year). Inflation is broad based and policy needs to be adjusted in order to temper inflation and, perhaps more importantly, inflation expectations.
Fed Chair Powell Testimony (USD, GMT 15:00)

Thursday – 03 March 2022

ISM Services PMI  (USD, GMT 13:00) – The ISM-NMI index is expected to rise to 61.0 from 59.9 in January, down from an all-time high 68.4 in November.
Fed Chair Powell Testimony (USD, GMT 15:00)
BoC Governor Macklem Speech (CAD, GMT 16:30)

Friday – 04 March 2022

Non-Farm Payrolls (USD, GMT 13:30) – Expectations are for a 380,000 February nonfarm payroll increase, after gains of 467k in January, 510k in December, and 647k in November. Diminished payroll restraint are anticipated from the Omicron wave that allows a boost for the workweek and hours-worked, but a diminished hourly earnings gain. Average hourly earnings are assumed to rise 0.4%, after gains of 0.7% in January and 0.5% in December, while jobless rate to dip to 3.9% from 4.0% in January. In the last expansion we saw a 3.5% peak for y/y wage gains, in both February and July of 2019, before the pandemic-boost to an 8.0% peak in April of 2020, and the ensuing strength in wage gains that has allowed continued robust y/y increases into 2022.

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Andria Pichidi

Market Analyst

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