The attention of the traders this week was on the minutes of the most influential central bank of the moment: the Central Bank of Europe and the Federal Reserve.
According to the minutes of the FOMC, the solidity and renewed momentum of economic growth in the United States are increasingly convincing the implementation of a monetary policy of gradual increases of interest rates. Most members of the committee, however, are pushing for a cautious and patient attitude towards interest rates.
As far as inflation is concerned, the FOMC still does not seem to see wage growth, but most of the Committee is convinced that 2% target will still be achieved.
After an initial rise, Wall Street was hit by the deep swings of the Treasury market. US 30-year yield has jumped well over 3,22% while US 10-year yield has jumped on the 4-year highs, over 2,95%. The consequences on the stock market were almost immediate: the Dow Jones turned bearish as well as S & P and Nasdaq.
FOMC minutes have also had an impact on Asian markets, drowned by possible increases in interest rates that could affect the US.
From the ECB minute, on the other hand, very different topics have emerged. First of all, the weakness of the US dollar. ECB members are worried about the fears that US administration is deliberately trying to start currency wars. Everything refers once again to the comments of Steven Mnuchin who, speaking with optimism of the depreciation of the greenback, has caused obvious fluctuations on the foreign exchange market.
Another important issue directly concerned the methods of communication used by the Central Bank and indirectly the inflation of the Eurozone.
For the members of Frankfurt it is still too early to change the current forward guidance and to report the normalization of monetary policy, although the minutes have highlighted the improvement in inflation estimates reaching the target at 2%.
The euro dollar exchange after the publication of the minutes has moved a bit loosing some points.
Despite these statements, a few days after it was published the ZEW confidence sentiment that fell in February. The market mover has indeed gone from the 31,8 of the previous survey to 29,3 share. Analysts had expected a drop in the ZEW index at 28,4.
Here are the market movers of the week from the 26 of February to the 2 of March.
Among the most important events to be monitored on the Economic Calendar certainly the Non Farm Payrolls USA. The periodic survey will raise the veil on the US labor market and will be as usual accompanied by the data on the participation rate and on the unemployment rate.
Among the market movers of the week, always referring to the USA, the attention will be on the GDP and on the surveys on the performance of the real estate market.
Moving to the other side of the ocean, this week will offer important points for discussion. Inflation, price trends and labor market will be analyzed once again.