Next week to watch (3-7.02.2025)

31.01.2025 09:11|Investment Advice Department, Conotoxia Ltd.

Finally, January is over. With the Nvidia scare and the Fed decision behind us, markets could use a calmer first week of February. On Monday, investors will receive January’s preliminary inflation reading in the Euro Area, while the Bank of England will vote on the benchmark bank rate in the UK on Thursday. The newest job-related data in the US, including the non-farm payrolls and unemployment rate, will be reported at the end of the week.

Table of Contents:

  1. Euro Area Consumer Price Index (CPI) YoY (preliminary for January)
  2. UK interest rate decision
  3. US unemployment rate (January)

 

Monday, 3.02,  11:00 CET, Euro Area Consumer Price Index (CPI) YoY (preliminary for January)

In December 2024, the annual inflation rate in the Euro Area rose for the third consecutive month, reaching 2.4%, the highest level since July. This figure represents an increase from 2.2% in November, matching both market forecasts and preliminary estimates. The rise in inflation was primarily attributed to base effects, as last year's significant drops in energy prices are no longer included in annual calculations. 

Inflation rates varied across major economies: Germany saw an increase to 2.8% from 2.4%, France's rate rose to 1.8% from 1.7%, and Italy experienced a slight decrease to 1.4% from 1.5%. Core inflation remained unchanged at 2.7%. 

Analysts forecast that inflation in the Euro Area might decrease in the first half of 2025 and reach 2% by June. 

Source: Tradingeconomics.com

A higher-than-expected reading may have a bearish effect on the EUR, while a lower-than-expected reading could be bullish for the EUR.

 

Impact: EUR/USD, EUR/GBP, EUR/PLN

 

Thursday, 6.02, 13:00 CET, UK interest rate decision

During its December 2024 meeting, the Bank of England kept the benchmark bank rate unchanged at 4.75%, aligning with market expectations. This decision came as consumer price index (CPI) inflation, wage growth, and certain inflation expectation indicators had increased, highlighting the risk of persistent inflation. 

The central bank emphasized that a gradual approach to easing monetary policy remains suitable and that it must maintain a restrictive stance for an adequate period until the risks of inflation sustainably returning to the 2% target in the medium term are further alleviated. The Bank of England will evaluate the appropriate level of monetary policy restrictiveness at each of its meetings.

Analysts forecast that a possible 25-basis point rate cut at the upcoming BoE meeting may result in a 4.50% benchmark bank rate.

Source: Tradingeconomics.com

 

A decision resulting in a higher-than-expected benchmark bank rate may have a bullish effect on the GBP, while a lower-than-expected benchmark bank rate could be bearish for the GBP.

Impact: EUR/GBP, USD/GBP, GBP/PLN

 

Friday, 7.02, 14:30 CET, US unemployment rate (January)

In December 2024, the unemployment rate in the United States declined to 4.1%, down from 4.2% in the prior month, falling below market expectations of 4.2%. The number of unemployed individuals dropped by 235,000, bringing the total to 6.886 million, while the level of employment rose by 478,000 to reach 161.661 million. At the same time, the labour force participation rate remained steady at 62.5%, and the employment-population ratio increased to 60% from 59.8%.

Analysts expect the US unemployment rate to trend slightly higher reaching the level of 4.4% by the end of the first quarter of the year. 

Source: Tradingeconomics.com

A higher-than-expected reading may have a bearish effect on the USD, while a lower-than-expected reading could be bullish for the USD.

 

Impact: EUR/USD, USD/GBP, USD/PLN.

 

Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service)

The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results.

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Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.

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Santa Zvaigzne-Sproģe, CFA

Santa Zvaigzne-Sproģe, CFA

Head of Investment Advice Department

A certified financial analyst with a broad experience in financial markets obtained working as a broker and securities specialist in various financial institutions across the Baltics.

In addition to obtaining the prestigious CFA license from CFA Institute and Advanced Certificate from CySEC in 2022 as well as Investment Advisor’s license from Baltic Financial Advisor’s Association in 2019, Santa holds MBA from Swiss Business School in Switzerland and master’s degree in finance from BA School of Business and Finance in Latvia.


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72.43% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.43% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.