The economic calendar for the weak ahead is lighter than usual as no major data is due with a few exceptions. As such, the likelihood is that the market will consolidate current levels and will focus more on the price action in the equities rather than on something else.
The pandemic still holds the headlines as vaccination efforts are ongoing in the advanced economies. Any positive news on this front may improve sentiment and thus further fueling the move higher in the stock market.
U.S. CPI and EU Economic Forecasts to Highlight the Trading Week
The main economic event of the week is the U.S. CPI or Consumer Price Index. Scheduled for release on Wednesday, it is expected to rise by 0.3% on a monthly basis. If we consider the extent of the monetary and fiscal easing that is taking place in the United States, we should not be surprised to see a higher number than anticipated by economists. If anything, we should look at inflation data in Europe, as last week it surprised to the upside.
On the same day, the Fed’s Powell is expected to give a virtual speech at the Economic Club of New York. As always, when the Fed’s Chair is speaking, the markets are moving, so the focus on Wednesday will be on the dollar and the direction of the U.S. stock market.
One day later, the EU economic forecasts will move the Euro pairs. This is a quarterly report that forecasts the economic conditions for the upcoming two years and considers an impressive number of variables (almost two-hundred). As such, it is considered one of the most valuable economic reports for the Euro area economy and the highlights of it may move the EURUSD and other Euro pairs.
The week, as mentioned earlier, is pretty light if we consider the events on the economic calendar. However, whenever this is the case, trending conditions favor strong market moves, with little or no pullbacks. Therefore, complacency is not desired as just when one thinks that the markets have no reason to move, they will. Potential catalysts this week are the stock market in the United States and the price of gold.