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Crucial Week for Markets, Fed Meeting and Jobs Report Ahead

Crucial week for markets as traders anticipate the Federal Reserve’s two-day meeting along with nonfarm payrolls for October.

SageFX - Nov, 01, 21

*Sage FX would like to state that traders should research extensively before following any information given hereby. Any assumptions made in this article are provided solely for entertainment purposes and not for traders to guide or alter their positions. Please read our Terms & Conditions and Risk Disclosure for more information.

Principal Points

  • Exciting trading opportunities are on deck for the week and traders will be closely watching
  • The Federal Reserve meets on Tuesday and Wednesday, the US releases jobs data on Friday

What’s Moving in the Markets?

The broader financial markets have prepared a flurry of important economic data this week. To get started, heightened volatility could be expected just because today marks the start of a new month of trading.

That said, currencies like dollars and euros, and commodities, among them gold and oil, are likely to see elevated moves.

As the week progresses, traders will be looking toward the major events, a Fed update and a jobs report.

On the first one, the Federal Reserve this week will hold a crucial press conference. Following a two-day regular policy meeting, Fed Chair Powell will provide a market update on Wednesday. In more detail, he is expected to talk about two key topics, tapering and inflation.

Going Deeper into the Federal Reserve’s Event

Tapering is the reduction of monetary stimulus. Since the pandemic knocked the markets in March last year, the Fed has been pouring $120 billion in monthly asset purchases. In other words, the US central bank has been supporting the economy and the broader market with unprecedented monetary backing.

With this in mind, Mr. Powell on Wednesday is likely to announce the Fed’s first big step toward unwinding this extraordinary policy. Additionally, there’s another major topic hanging over the Fed’s agenda, and that is inflation.

On inflation, Chair Powell will need to do his best to provide assurances that higher prices would be temporary. Moreover, Mr. Powell’s job is about to get increasingly challenging as inflation just spiked to a 30-year high.

More precisely, the Fed’s preferred inflation gauge – core PCE inflation, showed prices rose 3.6% in September, on an annualized basis. The surging pace of inflation was last seen in 1991.

Overall, traders will pay close attention to the press conference on Wednesday. It could provide key insight that has the potential to define the direction of the market.

Jobs Data to Highlight Pace of Economic Recovery

And on Friday, traders and investors will be closely watching the latest data release from the US. On this note, the Labor Department will publish its nonfarm payrolls report.

The report will show how many new jobs were added to the economy in October. It is one of the most important gauges of economic health and is surrounded by increased volatility.

That means stocks, currencies, and commodities could see elevated volatility on Friday as investors position their portfolios.

Bitcoin Price Keeps Steady Above $60,000

In cryptocurrency trading, the digital asset market is hovering near all-time highs. In detail, the entire valuation of the crypto space is right below its record high of $2.7 trillion. Bitcoin, meanwhile, remains pinned above $60,000 as traders kick off November’s deals.

Economic Data Coming Up Today (EST times)

On Monday, the first trading day of the month, the US will release its ISM manufacturing PMI for October at 11:00 am. Later, at 07:50 pm, the Bank of Japan will deliver its monetary policy statement.

In conclusion, the Reserve Bank of Australia will announce its interest rate decision and rate statement at 11:30 pm. All economic data is expected to increase the volatility in the forex market, presenting trading opportunities for the day.

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