🔥 Central Bank Watch: Rate Decisions in Focus
US Federal Reserve (Jan 29)
- Expected Rate: Hold at 4.50% .
- Key Insight: Markets await Fed Chair Powell’s commentary for hints on future cuts amid Trump’s tariff threats and resilient US growth. A hawkish tone could boost the USD, while dovish signals may weigh on equities .
Bank of Canada (Jan 29)
- Expected Rate: 25 bps cut to 3.50% .
- Why It Matters: Slowing GDP and Trump’s oil tariffs pressure Canada’s economy. A cut could weaken the CAD, but watch Governor Macklem’s presser for policy clues .
European Central Bank (Jan 30)
- Expected Rate: 25 bps cut to 2.75% .
- Outlook: Lagarde’s speech will focus on eurozone inflation and growth. Weak German GDP (-0.1% Q4 forecast) may amplify dovishness .
📊 Key Data Releases to Drive Volatility
- Monday (Jan 27):
- China PMIs: Manufacturing at 50.1 (neutral), Services at 52.1 (bullish for yuan) .
- Wednesday (Jan 29):
- Australia CPI: Q4 Trimmed Mean CPI forecast at 0.8% (YoY: 3.5%). A miss could sink the AUD .
- Thursday (Jan 30):
- US GDP (Q4): Expected 2.8% growth (down from 3.1%) driven by consumer spending .
- Eurozone GDP: Preliminary Q4 growth at 0.2% (vs. 0.4% in Q3) .
- Friday (Jan 31):
- US PCE Inflation: Core PCE forecast at 0.2% m/m (2.8% y/y). A hot print may delay Fed rate cuts .
🌐 Geopolitical & Market Risks
- Trump’s Tariff Threats:
- 25–50% tariffs on Colombian goods and pressure on OPEC to cut oil prices risk global trade tensions .
- Oil Markets: WTI crude eyes $70.50 resistance. Trump’s push for lower oil prices clashes with robust US demand .
- BoJ Rate Hike Speculation: Hawkish signals could trigger JPY volatility, with USD/JPY testing ¥155 support .
💹 Market Trends & Technicals
- EUR/USD: Testing 1.05 resistance. A break above 1.0545 could signal bullish momentum; failure may retest 1.0285 support .
- Gold (XAU/USD): Eyeing $2,800 breakout for a run toward $3,000. Buyers dominate, but a dip to $2,695 is possible .
- Equities:
- NASDAQ 100: Nears all-time highs on Trump’s pro-business policies. Pullbacks are buying opportunities .
- DAX: Surges above €21,000; any dips toward €20,000 are likely to attract buyers .
🔍 Summary of Risks
- Central bank policy divergence (Fed vs. ECB/BoJ).
- US-China trade tensions and Trump’s tariff actions.
- Oil price swings amid geopolitical rhetoric.
- Key data surprises (US PCE, Eurozone GDP).
Stay ahead, trade smart! 🚀
— Zestra Capital’s Team
Disclaimer: This newsletter is for informational purposes only. Trading involves risk; conduct your own research.