During the week ahead the market is likely to look towards a number of key market themes and events which have the potential to indicate financial market moves.
Central Bank Speakers
This week we see scheduled speeches from central bank head. Bank of Japan Governor Kuroda, European Central Bank President Christine Lagarde and Federal Reserve Chairman Jerome Powell are on the agenda.
Governor Kuroda is likely to touch upon the recent currency intervention and the major steps that the central bank will undertake to ensure price stability for the Japanese currency.
ECB President Lagarde may hint at the path ahead for interest rates as eurozone inflation spirally, while Chair Powell is likely to stay on point from recent hawkish policy speeches.
Russia
Russia last week mobilized 300,000 reserves as the situation in Ukraine appeared to suddenly worsen and diplomatic relations with the west reach an all-time low.
If the conflict continues to go in this direction, with NATO and Russia effectively on the cusp all-out war then we should expect more wild moves in financial market.
It is also noteworthy that more western sanctions are likely. And we could also see Russia withdrawing gas and energy supply. Energy market will be worth monitoring.
US Data
Data from the United States is set to remain a focal point as the recent PMI data started to contract and the domestic economy shows signs of spluttering in the quarter ahead.
Durable good, inflation, and GDP data will be closely watch. If the data comes in much worse than expected I think markets could start to sell stocks and bond yields are also likely to rise.
FX Markets
Last week the foreign exchange market saw the type of moves that traders had become accustomed to in the 1980s and during the financial crisis in 2008.
The British pound lost over 3 percent in one day against the greenback, while the Japanese yen sunk by 500 points against the buck after the BoJ intervened.
This week it will be worth watching to see if the British pound will continue towards parity and if the central bank of Japan will continue to defend the 145.00 level.
