This week, the Federal Reserve (Fed) will announce the latest interest rate decision. Other key international financial events include: OPEC + ministerial meeting, the final value of the manufacturing Purchasing Managers Index (PMI) in many countries, the United States in April ISM manufacturing index, unemployment rate and non-agricultural report, investors will also continue to pay attention to US stock earnings, such as AMD (AMD-US),Starbucks (SBUX-US) and Under Armour(UAA-US), etc. The development of the epidemic in China and the situation in Russia and Ukraine will also be the focus of the coming week.
This week’s trading notes (0502-0506)
1. The Fed’s May Decision Meeting
The Fed will announce its interest rate decision in May at 2:00 a.m. Taipei time on Thursday (5th). and began to shrink its balance sheet.
Investors will also pay attention to the central bank’s views on the path of future rate hikes, economic growth and inflation, especially following the consumer price index (CPI) recorded its largest annual increase in 40 years in March, and Fed officials have a very strong view on the current rate of inflation. important.
Fed President Jerome Powell has previously mentioned the benefits of a “front-end loading” strategy, hinting at sharp rate hikes in the coming months to curb inflation.
Market analysts believe that, considering that there are signs that US inflation growth has peaked, if this Fed meeting issues a more hawkish tone, it may be regarded as a negative message by the market.
Traders are widely betting on the federal funds rate rising to 3 percent or above by year-end, according to CME’s FedWatch tool. In addition to the Federal Reserve, the central banks of Australia, the United Kingdom and Norway will also announce interest rate decisions this week.
2. US ISM manufacturing index, non-farm payrolls
U.S. April ISM manufacturing and nonfarm payrolls data are due this week, and traders and fund managers are closely watching for any signs of a deterioration in the U.S. economy following an unexpected contraction in first-quarter gross domestic product (GDP) .
The market expects that the April ISM manufacturing index released on Monday (2nd) will rise to 57.7 from 57.1 in the previous month, and factory activity is expected to rebound slightly, and the April non-agricultural employment number announced on Friday (6th) The unemployment rate is expected to remain unchanged at 3.6%, down from 431,000 last month to 390,000.
3. OPEC+ holds ministerial meeting
The Organization of the Petroleum Exporting Countries and other oil-producing countries (OPEC+) will hold a meeting next Thursday to discuss production increase plans. The market generally expects that the probability of OPEC+ oil production policy turning is small, and June may continue the previous moderate pace of production increase, which is the month Production increased by 432,000 barrels per day.
OPEC+ believes that there is no need to change the previously discussed output increase plan given that Russia continues to export oil. In addition, China has resorted to more lockdown measures, which is also one of the reasons for the group to be cautious regarding crude oil production.
