Three markets to watch next week (27.01.2023)

The week ahead is likely to be the busiest week of 2023 so far. Investors will not only be offered rate decisions from Fed, ECB and BoE but also will get a chance to look at the latest US jobs data. On top of that, Wall Street earnings season is in a full swing and the coming week will see releases of Q4 earnings reports from Meta Platforms, Apple, Amazon and Alphabet. Be sure to watch USDJPY, EURGBP and US100 next week!

USDJPY

Next week will see the release of top-tier data and events from the United States. Attention will be mostly on the FOMC rate decision on Wednesday, 7:00 pm GMT. The US central bank is expected to slow the pace of rate hikes to 25 basis points. Apart from Fed decision, ADP employment report for January will be released this week on Wednesday, 12:15 pm GMT while NFP report will be released a day later - on Friday, 1:30 pm GMT. All of those tend to be high USD volatility events and USDJPY is the pair where action can be expected.

EURGBP

While the FOMC rate decision is a key event of the week, it is not the only rate decision from a major central bank scheduled for this week. Investors will also be offered decisions from the Bank of England (Thursday, 12:00 pm GMT) and the European Central Bank (Thursday, 1:15 pm GMT). When it comes to the ECB, economists and the money market both forecast a 50 basis point move. Things are less clear when it comes to BoE as economists see a 50 bp rate move while money markets are divided 50-50 between 25 and 50 bp rate moves. This means that there is scope for a surprise and a volatility spike on EURGBP

US100

Earnings from tech companies released last week turned out to be mixed - while Tesla surprised to the upside, reports from other companies (Microsoft, Intel and IBM) hinted at struggles. Next week will see releases from 4 US mega tech companies - Meta Platforms on Wednesday and Apple, Amazon and Alphabet on Thursday. As is usually the case for those mega-cap techs - all reports will be released after close of the Wall Street session. Tech-heavy Nasdaq-100 (US100) index reached the highest level since mid-December last week and mega tech reports may provide more fuel.