This article was submitted by Antreas Themistokleous, market analyst at Exness.
This preview of weekly data looks at USOIL and XAUUSD where Crude oil is making extraordinary losses and Gold is in an aggressive bullish momentum following the domino effect of bank failures expanding to Europe.
The most important economic data for this week are:
- Canadian inflation rate on March 21st at 12:30 PM GMT. Market expectation is for a drop to 5.4% against a previous recording of 5.9%. If the consensus is confirmed we will be seeing the lowest level of inflation in Canada for the last year.
- British Inflation rate on March 22ns at 07:00 AM GMT. The figure is expected to slightly decrease by 0.3% which could possibly influence a more aggressive stance by BoE in the future meetings since inflation does not go down fast enough and possibly supporting the quid in the short term.
- FED interest rate decision on March 22nd at 06:00 PM GMT. The expectations are for a single hike in interest rates (addition of 0.25%). The FedWatch Tool although prices in the probability of NO HIKE following the recent events with big banks failures with a possibility of 50%!
- FED press conference on March 22nd at 06:30 PM GMT following the interest rate decision. The traders will be paying attention to the press conference because it would clarify the future developments on interest rate policy by the FED.
- BoE interest rate decision is set to be released on March 23rd at 12:00 PM GMT. The scenario of a single hike (0.25%) seems to be the most possible scenario following the inflation publication of the previous day in which case would support the British pound against its pairs.
- Japanese inflation rate on Thursday March 23rd at 11:30 PM GMT where the consensus is for a decline of around 1%. If this is confirmed it would be the first decline in inflation since January 2022 and will see how the markets will react to this expected figure.
USOIL, daily
Crude oil prices are still in free fall even after signals that central banks are stepping in to help troubled lenders in the U.S. and Europe. Speculators had been building their long position in the oil market on the back of expectations that there will be an increased demand recovery from China following the reversal of its zero-covid policy, together with the view that Russian oil supply will edge lower.
For the time being there are two scenarios that could help boost the price of oil. The first would be an OPEC response by stepping in and announcing further supply cuts in order to try bringing some stability to the market. But this cannot just happen overnight or take such a decision based on a very short reaction of the market. Probably they will wait for the dust to settle and take action on their next meeting which will take place in early July. The second scenario would be the US Department of Energy(DoE) announcing that they will be refilling their SPR (Strategic Petroleum Reserve) which is at its lowest level since the 1980’s. Previously the US Department of Energy (DoE) said that they would look to refill the SPR if WTI traded around US$67-72/bbl which is the case right now.
