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Market focus: Central Banks Rate Decisions and US Employment Change


What happened in the market last week?

  • US CB Consumer Confidence fell from 106.0 to 102.9, indicating a potential slowdown in consumer spending. 
  • US Jobs data remained positive, with Unemployment Claims at 190k and ISM Services PMI at 55.1. 
  • Despite mixed economic data, the USD gained strength.
  • Australia’s CPI y/y fell from 8.4% to 7.4%. 
  • The Australian Dollar had a strong week due to positive data out of China, with manufacturing expanding at its fastest pace in over a decade.

Chart, bar chart

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Source: VT Markes MT4

Last Week Market Pair Changes 

(All data is taken from the MT4 VT Markets)

Last week, the USD is slightly lower despite some mixed data in the US. 

  • The USDJPY was weaker by 0.42%.
  • The USD Index fell by 0.67%.
  • The EURUSD was higher by 0.87%.
  • The GBPUSD was higher by 0.78%.
  • US Indices got boosted as the DJ30 ended the week higher by 1.81%, while NAS100 also rose by 2.76%.
  • Gold increased by 2.46%.
  • USOUSD (WTI) rose by 4.32%.

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Source: VT Markets Economic Calendar

What to focus on this week?

This week, the markets will be closely monitoring the decisions of several central banks regarding their interest rates. In the US, the non-farm employment change data is expected to be the most highly anticipated by investors.

Here are key events to watch out for:

Consumer Price Index (CPI) | Switzerland (March 6)

In January 2023, the Consumer Price Index in Switzerland rose by 0.6% from the previous month. 

Analysts project that the CPI for February will be at 0.4%.

Reserve Bank of Australia (RBA) Rate Statement | Australia (March 7)

The Reserve Bank of Australia increased the cash rate by 25 bps to 3.35% at its February meeting, the ninth increase since May 2022. 

Analysts expect the RBA to raise interest rates by another 25 bps. 

ADP Non-Farm Employment Change | US (March 8)

US private businesses generated 106,000 jobs in January 2023, substantially lower than the 253,000 jobs created in December 2022. 

Analysts anticipate the US to add 168,000 jobs for the month of February.

Bank of Canada (BOC) Rate Statement | Canada (March 8)

In its first meeting of 2023, the Bank of Canada increased its overnight rate by 25 bps to 4.5% and suggested that it would conclude its aggressive tightening cycle if economic developments conformed to the central bank’s outlook. 

For this month, analysts project that the BoC will keep the rates unchanged.

Bank of Japan (BOJ) Rate Statement | Japan (March 10)

During its January meeting, the Bank of Japan (BoJ) unanimously decided to retain its key short-term interest rate at -0.1%, and maintain the 10-year bond yields at approximately 0%. 

For this month, analysts predict that the BoJ will keep the rates unchanged.

Gross Domestic Product (MoM) | UK (March 10)

For the first time in three months, the British economy shrank 0.5% month-on-month in December 2022.

Analysts predict the UK GDP to be 0.0% in January 2023.

Employment Change | US and Canada (March 10)

In January 2023, the US economy added an unexpected 517,000 jobs, marking the most jobs created since July 2022, while the unemployment rate fell to 3.4%, the lowest since May 1969. During the same period, Canada added 150,000 jobs, the highest since February last year, and maintained an unemployment rate of 5%. 

For February 2023, analysts anticipate the US to add 200,000 jobs, resulting in an unemployment rate of 3.6%. In Canada, employment is expected to increase by 20,000, with an unemployment rate of 5.2%.

Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.