• Central banks: RBA, BoE and ECB
  • Earnings: GOOGL, AMZN and FB
  • Data: Eurozone GDP and CPI, and US NFP

After the sharp drop in US equity markets the previous week, we saw some very volatile price action as the bearish bulls initially took advantage of bearish stock prices, before being dominated again by the bears. As we approached the end of the week, the major indices were holding deep in negative territory. Even Apple’s strong results did little to lift morale as inflation and tightening fears were heightened by soaring oil prices and a hawkish Federal Reserve. Investors are starting to look to the first week of February, when the economic calendar is filled with high-profile macro data, including US non-farm payrolls, a few central bank meetings – namely the ECB and the BoE – and many more US profits, featuring the likes of Alphabet, Amazon and Meta. A week-long spring festival in China means markets there will be closed.

Tech stocks will remain focused

Source: ThinkMarkets and TradingView.com

The focus will remain clearly on the stock market, especially the still expensive tech sector. Powell has previously admitted that the Fed has fallen behind and now needs to pull itself together to bring inflation back to more acceptable levels. If that means disrupting financial markets, so be it. So expect to see greater volatility for tech stocks over the coming week, if incoming data points to a sustained period of high inflation and/or stronger growth. If we assume that the stimulus and low rates were among the main reasons for the prolonged bull run, then that support is no longer there or at least not in the same way. Value stocks – those in the financial sector and industrials – now have to do the heavy lifting. But if these big tech stocks continue to struggle — and we have plenty more earnings to come in the week ahead from the tech sector — then it’s hard to imagine the S&P 500 staying at current levels for too long. The correction could extend further and we could see more volatile price action in February.

Busy week for FX traders

As for the US Dollar, it is likely to remain supported against the commodity currencies as long as risk sentiment remains sour. There is an outside chance that the Japanese yen will come back strongly if the market turmoil continues, amid safe-haven demand. In the coming week we will receive policy updates from the RBA, BoE and ECB. We will also have the latest monthly employment reports from the United States, Canada and New Zealand. So there is a lot to expect for FX traders.

BoE set to hike rates to 0.5%

While the ECB and RBA are unlikely to change policy, the Bank of England is expected to raise interest rates by 25 basis points on Thursday as it plans to tighten policy for the second time in less than two months. The BoE, like many other central banks, has begun to further reverse its pandemic

Economic highlights and data for the week ahead


  • Chinese PMI; Eurozone GDP, German retail sales and CPI estimates
  • Monday also marks the end of January, so watch out for month-end flows and portfolio rebalancing


  • Data: RBA policy decision
  • German unemployment among second-tier European data dumps
  • ISM US manufacturing PMI
  • Gains: Alphabet, AMD, PayPal, Starbucks and Exxon Mobil, among others


  • New Zealand Employment Report
  • Eurozone CPI
  • OPEC+ meeting
  • ADP Private Payrolls in the United States
  • Gains: Meta Platforms (FB), Alibaba and Just Eat


  • Bank of England and European Central Bank meetings
  • US ISM Services PMI
  • Gains: Amazon, Snap and Ford


  • German factory orders and eurozone retail sales among a handful of eurozone data
  • U.S. Nonfarm Payrolls Report and Canadian Employment Report