Investors will have a lot to digest next week as the calendar is filled with major events! Traders will receive interest rate decisions from 3 major central banks, key U.S. labor market data, and earnings releases from major American tech companies in the coming days. It's worth watching the US100, GBPJPY, and GOLD indices next week!
US100
Next week is crucial for American indices. The FOMC will announce its interest rate decision on Wednesday evening, followed by the U.S. July NFP report on Friday. While the Fed is not expected to change interest rates, it could provide clues whether a rate cut might occur in September. Additionally, employment data will also impact market prices for Fed rate cuts. Next week is also filled with earnings releases from major U.S. tech firms, including Microsoft (Tuesday), Meta Platforms (Wednesday), and Apple and Amazon (Thursday). Given this, the US100 could experience significant volatility in the coming days!
GBPJPY
The Fed is not the only major central bank meeting this week to decide on rates. Traders will also receive interest rate decisions from the Bank of Japan (Wednesday) and the Bank of England (Thursday). Both decisions could result in surprises. Economists expect the Bank of England to cut rates by 25 basis points, but money markets price less than a 50% chance of such a move. Meanwhile, economists expect the Bank of Japan to keep rates unchanged, but money markets see about a 65% chance that the Bank will raise them by 10 basis points. Nevertheless, there is room for surprises, which could trigger increased volatility in GBPJPY.
GOLD
The interest rate decision from 3 major central banks - the Fed, the Bank of Japan, and the Bank of England - will likely cause volatility in their respective currencies. However, they will probably also cause a sharp increase in volatility in the precious metals market, especially in the gold market. Gold reached new record highs just below $2500 per ounce in mid-July, but has fallen by over 4% since then due to the strengthening USD. The question is - will the central banks manage to send a message that will halt the ongoing correction in the gold market?
