Week in a Glance: ECB, ADP & NFP, Reporting & OPEC

Bank of England and ECB, ADP and NFP, reporting and OPEC
The past week was exceptionally rich in terms of news and, accordingly, was characterized by high volatility.

The Bank of England expectedly raised the rate by 0.25%, bringing it to 0.5%. This was the first two consecutive rate hikes since 2004. The motivation is inflation, which is predicted to rise further with a peak in mid-spring 2022.

The ECB continues to go its own way. For him, economic recovery is more important than fighting inflation. So the rate in the Eurozone was left unchanged. The Central Bank can be understood: retail sales in the Eurozone fell by 3% in December.

OPEC+ has traditionally decided to increase production by another 400K b/d. But the markets did not appreciate this gesture, pushing Brent oil above 93 per barrel. The reason is that demand is recovering quickly, but the ability of OPEC + to actually increase production by the planned values ​​raises doubts in the markets. In our opinion, oil is now at its price peak and this is a good opportunity for medium-term sales of the asset. Especially when you consider that OPEC and other respected organizations expect an oil surplus in 2022.

The US labor market is in a very strange and contradictory shape. Data from ADP, published on Wednesday, recorded a decrease (!) in the number of new jobs by more than 300K. But according to official statistics (NFP data), the number of new non-agricultural jobs increased by 467K during the month, which turned out to be a positive surprise and made it possible to make good money on purchases of the USDCAD pair, since data on the Canadian labor market was rather weak.

The reporting season in the US has reached its peak. And it continues to cause mixed feelings, on the one hand, there are Apple, Alphabet and Amazon, which are showing excellent financial results. On the other hand, there is Meta, whose stock lost 25%+ on just one Thursday last week. As a result, almost the entire weekly growth of NASDAQ was “eaten”.

The coming week in the news plan promises to be much calmer. Although the data on inflation in the US and GDP in the UK will definitely contribute to bursts of volatility, as will the reporting of corporations such as Alibaba, Disney, Toyota, Coca-Cola, etc.