Back to home

What is the market watching this coming week?

<strong>What is the market watching this coming week?</strong>
Raghda Ahmed

February 26, 2023

The markets are awaiting a bundle of data this coming week. The following will summarize the top four events that are expected to have a remarkable effect on financial markets and gold.

  1. US Consumer Confidence

Investors will get an insight into the strength of the US economy this week with a number of data points from the country, including ISM manufacturing and services sector data for February. The Consumer Confidence Index may be of specific interest; it will be released on Tuesday and gives a vision of consumers’ views on economic prospects and inflation expectations. It is a leading indicator as it can be used to predict consumer spending and, hence, overall economic activity. The index is expected to be 108.5, compared to a previously reported reading of 107.1.A reading that is lower than expected could be interpreted as a positive sign for rising global gold prices, and vice versa.

  1. US initial jobless claims

Initial Jobless Claims measures the number of people who filed for joblessness insurance for the first time throughout the previous week. According to Labor Department data, it fell by 3,000 last week to 192,000 claims filed. A lower-than-expected reading could be a positive for increasing global gold prices and vice versa.

  1. Inflation data from the Eurozone

This week, preliminary inflation data (the Consumer Price Index, or CPI) from Germany, France, and Portugal are due on Tuesday and Wednesday, followed by the flash data for the Eurozone. Although markets are certain that the European Central Bank (ECB) will raise interest rates another 50 basis points in the upcoming meeting in March, they are watching the inflation data. Investors are expecting aggressive rate hikes to continue, with inflation still well above the ECB’s 2% target.

  1. China’s PMI

The China Caixin Manufacturing Purchasing Managers Index (PMI) is an important figure that markets watch. It is a leading indicator as it provides an overall view of the manufacturing sector for the whole economy. Economists are expecting the index to pitch up to 49.5, compared to an actual reading of 49.2 for January. It is worth mentioning that a reading for this index below 50.0 indicates that the manufacturing economy is declining, and a reading above 50.0 means an expansion in the manufacturing sector. A higher-than-expected reading will be seen as bullish for the CNY.