Table of Contents Show
RBNZ Decision, Japan CPI, Fed Minutes, and US Core PCE – Markets Weekly Preview
Week in Review: Bitcoin all-time highs, Weaker Dollar in another volatile week
The US Dollar was once again on the main stage this week as we have observed initial market reactions after last Friday’s US Credit Rating Downgrade by Moody’s Agency.
The Dollar Index (DXY) went back below the 100.00 level, Longer-end yields in US Treasury Bonds went back above 5% and this Dollar weakness fueled rallies in Gold and Bitcoin, the latter breaking fresh all-time highs with a weekly high at $112,030.
/*
Requesting advertisement by calling an endpoint assures that
the advertisement is never cached together with the page.
5tE4A – is a forced measure to prevent JS function from
being overwritten.
*/
function load_advertisement_5tE4A(){
let adSlot = document.getElementById(‘ad-slot-container-5tE4A’);
fetch(‘/load-advertisement/26/?is_sidebar=False’)
.then(response => response.text())
.then(html => {
adSlot.outerHTML = html;
})
.catch(error => {
console.error(‘Error fetching the template:’, error);
});
}
load_advertisement_5tE4A();
Indices in North-America took a beating from the US Credit Downgrade with both the S&P and Nasdaq down more than 2.5%.
This also dragged European indices which were playful in the beginning of the week after a EU-UK Trade Deal was achieved.
The entente was the most impactful trade deal since Brexit separated the two entities in 2020. IBEX and DAX both made new highs but got rejected particularly after Trump’s most recent tariff comments, more on this further in the article.
Bitcoin and Gold were the winners of the week, enjoying from a lower US Dollar. Both are up 4.85% as the weekly candle closes. Markets will now eye to a confirmation of new all-time highs in Bitcoin, and a retest of the last highs in the Bullion at $3,500. You can take a look at key levels for Gold here.
Currencies also all enjoyed from a fall in the Greenback, with the DXY down 1.7% on the week.
The winner was the Japan yen closely followed by the Swissie, as markets were diversifying their Safe-Havens into other currencies.
The Euro, Pound, and even the Canadian Dollar finished up more than 1.5% against the USD. The Australian Dollar was the laggard in the race against the Greenback, with AUDUSD “only” up 1.17%.
The Week Ahead: New Zealand Rate Decision and US Core PCE and FED Minutes
The upcoming week is packed with central bank speeches, kicking off over the weekend. Federal Reserve Chair Jerome Powell leads the lineup with remarks scheduled for Sunday at 2:40 P.M. ET. He’ll be followed on Monday by ECB President Christine Lagarde and Bank of Japan Governor Kazuo Ueda, setting the tone for the week.
Asia Pacific Markets Outlook
The Reserve Bank of New Zealand is expected to cut its Official Cash Rate from 3.50% to 3.25% on Wednesday May 28. A new Quarterly business survey was recently published by the RBZN which sent mixed signals ahead as Inflation expectations from businesses are seen to be growing. You can access the RBZN Report here.
The Key for the meeting will be to track any neutral or hawkish tone which would be hinting at a slower pace of cuts in the case where Inflation Expectations get out of hand.
Japan will the release of CPI Data on Thursday May 29 which will be key for all markets, as all eyes have been on a Bank of Japan move. A beat on CPI may hint at future raises in the BoJ Policy Rate, which will greatly influence Carry Trades, potentially shaking markets around the world as it did in July 2024.
Last month CPI came in at 3.5%. We will also see the release of the Japanese unemployment rate and Retail Trade data, and how both were affected by frantic US Policies.
The most recent change from the Bank of Japan was a hike to 0.50% from 0.25%, though the Central Bank has been communicating concerns about future changes due to Tariff uncertainty. The Policy Rate in Japan was negative from February 2016 until March 2024, which a change that took markets by surprise.
Europe, US and UK Market Outlook
Data releases will be limited in Europe with mostly ECB Speakers, markets will nonetheless expect releases for Consumer Confidence from Germany, with the last release at -20.6 and the same data for Europe expected at -15.2. These data points will release on Tuesday May 27.
It will be essential to see if European businesses enjoyed a more sympathetic approach by President Trump about tariffs, though his most recent comments affected the European Indices, sending the DAX down 2.7%.
FED Minutes will be released on Wednesday, and we will have a better idea of what the Federal Reserve is expecting going into future meetings.
Minutes are not the most market-moving event in the calendar, but they give more emphasis to what precise data the FED is targeting. FED Chair Powell’s favorite measure until now was the Core PCE.
Talking about Core PCE, we will see the data release next Friday. The past released indicated a 2.6% Y/Y change, though the upcoming release will incorporate the most recent US PMI data and further news of the tariff’s influence on core prices.
No data releases are expected from the UK, with only speeches from Bank of England Pill and Lombardelli.
Most impactful Economic Calendar releases for Next Week
{
const imageElement = document.getElementById(‘pinch-to-zoom-img-8838’);
if (imageElement) {
panzoom(imageElement, {
maxZoom: 4.0,
minZoom: 0.5,
contain: ‘outside’,
});
}
}, 100);
}
}
}”
x-init=”$watch(‘imgModal’, value => initPanzoom())”
class=”flex “>
close
For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)
Safe Trades for the week ahead!
/*
Requesting advertisement by calling an endpoint assures that
the advertisement is never cached together with the page.
zPvkG – is a forced measure to prevent JS function from
being overwritten.
*/
function load_advertisement_zPvkG(){
let adSlot = document.getElementById(‘ad-slot-container-zPvkG’);
fetch(‘/load-advertisement/30/?is_sidebar=False’)
.then(response => response.text())
.then(html => {
adSlot.outerHTML = html;
})
.catch(error => {
console.error(‘Error fetching the template:’, error);
});
}
load_advertisement_zPvkG();
Opinions are the authors’; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© {CURRENT_YEAR} OANDA Business Information & Services Inc.
