Due to year-end holidays and lack of liquidity in the markets, this trading week is slow. But next week, things can quickly change, as a flurry of important economic events have the potential to trigger serious volatility.
There are four events to mark on your calendar:
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- FOMC Meeting Minutes
- ISM Manufacturing and Services PMI
- Euro Area Core CPI Flash Rating
- Non-farm wages
FOMC Meeting Minutes
The next trading week actually starts on Wednesday. Before Wednesday, most banks will be closed, so it’s reasonable to assume that not much will happen in the financial markets.
But traders will be busy from Wednesday onwards. One of the key events of the next trading week will be the FOMC meeting minutes.
The minutes reveal what FOMC (Federal Open Market Committee) members discussed at the last FOMC meeting. More precisely, traders will find more details on the Fed’s last hike in December.
Wednesday’s Focus Point – What Terminal Rate Do FOMC Members See in 2023?
ISM Manufacturing and Services PMI
ISM data is available from the US for the first week of any trading month. Both manufacturing and services PMIs are due, one on Wednesday, ahead of FOMC minutes, and one on Friday.
At this time, PMIs are very important because they provide an indication of the state of the US economy. As explained in this ArticleMost economists expect the U.S. economy to enter a recession in the first half of the year, and PMIs tell investors if it has already begun.
Euro Area Core CPI Flash Estimate
Next Friday, euro traders are on the defensive. Core CPI Flash estimate y/y during the European session.
With the previous print at 5% and an increasingly hawkish ECB, it’s time to look at whether or not inflation in Europe has peaked.
On the first Friday of every month, US non-farm payrolls data is released. It’s one of the most important pieces of economic data because of tons of information like the unemployment rate or average hourly earnings.
All in all, in just three days, the next trading week is set to begin with aggressive moves. as a consequence, FX Traders should prepare for high volatility.