Tier one data for US & China to drive sentiment

This week, my Weekly Outlook gets back to focusing on the data again. The speech by Janet Yellen last week suggested that the Federal Open Market Committee did actually feel that it would be appropriate to begin the official tightening of shorter term interest rates in 2015, but again made the caveat of any such move still being “data dependent”. Her speech has brought forward expectations of a rate hike back from 2016 again, but it seems as though the economic data will provide ever more importance to the views of the Fed. So moving into this week there is a raft of key economic data that could easily help mould the views of some of the members on the committee who may be teetering on the brink of turning hawkish. The outlook for both parts of the Federal Reserve’s dual mandate will be given more detail this week as crucial data releases on inflation and unemployment are seen. However, the important forward looking growth data that is provided in the Purchasing Managers’ Index surveys will also be extremely crucial. So there will be a lot to mould market sentiment this week and it could be a volatile one.

On the forex markets the performance of the US dollar has been of crucial importance to the major pairs as key support levels are tested on several key markets. Quite how traders respond to these levels could be defining for the coming weeks. I take a closer look at the technical analysis on Euro/Dollar and also Sterling/Dollar and look at what the charts are telling us. The equity markets also remain under significant pressure with the bears in control of the outlook. Is the DAX going to continue lower, and can the FTSE 100 continue to outperform? Also, what about the key commodity markets as significant developments are seen in the outlook for gold, whilst we also focus on the outlook for the US 10 year Treasury yield.