Trading The Week Ahead: 13th May 2024


Financialsource Representative

Welcome to this week's trading outlook! Here’s a quick rundown of the main opportunities we're tracking:

First up, on Monday, we have the New Zealand inflation forecast. It’s a tricky one but important because it reflects on the Reserve Bank of New Zealand's rate path. A higher forecast than expected could strengthen the NZD, signaling stickier inflation and potentially higher interest rates for longer.

Tuesday brings us to the UK employment data, which is particularly significant this week. We’re looking for signals of weakening in the labor market, such as higher unemployment rates or lower average earnings, which could lead to significant GBP selling. This is based on the Bank of England's recent move towards signaling a rate cut.

The centerpiece of the week is the US CPI data on Wednesday. Given the recent disappointing US inflation figures, the markets are keyed up. A higher-than-expected CPI could bolster the USD as it suggests inflation isn't cooling as expected, contrasting with the Fed’s latest dovish hints. Conversely, a lower CPI could trigger dollar selling and boost stock markets.

We'll also be watching the Australian wage price data. This could swing the AUD depending on the outcome, with strong wage growth potentially pushing the RBA towards rate hikes, and weak growth indicating possible cuts.