Risk-off sentiment has dominated global markets in recent weeks. Headlines around some of the more speculative areas of the market like cryptos, have abounded in this environment.
Here are the scheduled economic data releases and events that could further sway market sentiment over the coming week:
Monday, May 16
Tuesday, May 17
Wednesday, May 18
Thursday, May 19
Friday, May 20
The Fed tightening story has much to do with this as the liquidity tap is constricted and policymakers rush to reinforce the central bank’s inflation-fighting credibility. If recession concerns grow louder, they may transcend inflation worries.
This means the bid in the dollar could weaken broadly as the 3.20% 10-year US Treasury yield (and 105 in DXY) becomes strong resistance to more upside.
UK data may test Bank of England
Elsewhere sees the usual mid-month cluster of UK figures. Inflation is the major release with expectations of a double-digit headline print later this year. The BoE is already anticipating this in its forecasts. Another fall in the unemployment rate next week is likely to highlight the tightness of the jobs market. This adds to wage and price pressures, though the MPC seems more preoccupied by falling growth.
The beleaguered pound (and the euro too) are eyeing up major levels. The weak undertone in GBP/USD sees the bears targeting 1.20, after a fourth consecutive week of declines. Long term retracement support sits just above here.