Week Ahead – Shock waves

Massive uncertainty remains

It’s been another week of significant volatility in financial markets and there’s little reason to expect next week will be any different. The Russian invasion of Ukraine sent shock waves around the world and the ripple effects were felt throughout the markets as investors were forced to consider what the consequences would be for everything from commodity prices to interest rates.

The tragic events in Ukraine will continue to have a big impact on the markets in the coming weeks as it becomes clear what Vladimir Putin’s ultimate ambition is and how the West will respond.

Next week also offers a packed schedule of economic data – including US non-farm payrolls – central bank speakers and interest rate decisions which will generate additional interest, in light of recent events.

Fed speakers in focus ahead of key meetings

Still hope for negotiations after Russian invasion of Ukraine

China to set growth target for 2022


The focus for the US will be on both President Biden’s State of the Union address and Fed Chair Powell’s two days of testimony to both the House Financial Services Committee and the Senate Banking Committee. Investors will closely watch to see how geopolitical turmoil starts to weigh on inflation and growth prospects and how Fed members Powell, Bostic, Evans, Bullard, Logan, and Williams pivot their stances on how to start tightening monetary policy.  

A selection of economic data will provide updates on manufacturing and service activity in February.  The nonfarm payroll report will confirm that large parts of the economy remain on sound footing. The consensus estimate for jobs created in February is 400,000 which would be a decrease from the 467,000 gain in January. The unemployment rate is expected to tick lower to 3.9%, while average hourly earnings could rise 0.5%, a softer pace than the 0.7% seen a month ago.  


The Russian invasion of Ukraine has naturally dominated this week and that’s unlikely to change over the coming days as investors get to grips with how bad the situation is going to get and what the knock-on effects will be, particularly in regard to Russian exports of oil and gas, which Europe is so reliant on. Prices rebounded on Friday but volatility is likely to continue.

There’s a lot of economic data coming from Europe next week as well as the ECB minutes on Thursday. While this will play second fiddle to events in Ukraine, there remains a heavy focus on inflation and how central banks will respond. A lot has changed since the last meeting but the minutes will still hold clues, while inflation data on Wednesday, and PMIs on Tuesday and Thursday will be of significant interest.


It’s a little quiet on the UK data front next week with PMIs on Tuesday, Thursday and Friday the only notable releases. There’s plenty of BoE speak throughout the week though which will be of interest, particularly in light on the recent events in Ukraine.


The Russian invasion of Ukraine has caused turbulence throughout the financial markets, with the rouble hitting an all-time low as troops crossed the border. As they close in on Kyiv, the currency has rebounded off the lows, aided by interventions from the central bank which has reportedly been using its vast reserves. Volatility is expected to continue as sanctions are imposed by the West, although the view so far is that they haven’t been particularly hard-hitting. Further measures are likely to be announced in the coming days, with Russia being cut off from SWIFT the target for many countries. 

Against this backdrop, it’s a bit hard to get too excited about the PMIs and unemployment data. 

South Africa

The PMI data on Thursday is the only event of note next week. Volatility in the rand picked up in the aftermath of the Russian invasion, as it did across the emerging market space.


Next week’s inflation data is probably the highlight given the actions taken by the central bank late last year. Finance Minister Nureddin Nebati recently claimed he thought inflation would stay below 50% and he’s expected to be quickly proven wrong when the data is released on Thursday, alongside PPI numbers.

GDP data on Monday is also expected to show the economy grew 9% in the fourth quarter. 

The lira rebounded on Friday after slipping following the Russian invasion of Ukraine, alongside other EM currencies. 


China’s Two Sessions report is released at the end of the week and markets will be watching to see if China reinstates a GDP target for 2022. Expectations are for a 6% target; a lower number could be a short-term headwind for equities.

China releases official and Markit manufacturing and non-manufacturing PMIs which are likely to be on the weak side as Ukraine schisms sweep EM and property markets nerves continue to hit sentiment. Alibaba produced a weak result this week and rumours of further tech crackdowns just won’t go away. In totality China’s equities still face some serious headwinds, not least, a slowing economy.

The CNY, by contrast, has risen to 6.3150, as basket currencies weaken despite US Dollar strength. The onshore and offshore CNY also appears to be attracting haven inflows as Eastern Europe rolls on. Authorities seem comfortable with the Yuan strength and it should remain firm in the week ahead.


India releases Q4 GDP on Tuesday which is expected to print around 6.0%. The headline figure has upside potential as real-time indicators in India suggest that growth is accelerating which should be positive for equities and the INR. PMIs later in the week could reinforce this.

In the near term, the INR could get buffeted like the rest of Asia FX by developments in Ukraine. The worst may be over though as the limits of Western sanctions are already apparent. Only another large spike in oil prices may change that narrative.


This week’s highlight in Australia is the RBA Cash Rate decision on Tuesday. Comments from RBA officials suggest they will maintain rates at 0.10% despite soaring inflation and strong growth. The last piece of the puzzle remains wage growth which is just under target at 2.30%. We will have to wait until the end of the quarter for more visibility and whether the great about-face from the RBA will begin.

A hike would be a huge surprise and could send local equities lower and the AUD higher. AUD remains at the mercy of events in Eastern Europe, as do local equities.

New Zealand

The RBNZ hiked as expected this week but the impact on the NZD was non-existent as risk aversion related to Eastern Europe crushed sentiment indicator currencies. The RBNZ signalled that many more hikes were ahead this year and that inflation, employment, and growth were above theoretical maximums. NZD is being held back by worries that the RBNZ is so far behind the ball a hard landing may occur.

Elsewhere, the NZD will continue to be buffeted by headlines from the Ukraine situation.


Japan releases industrial production, retail sales, and manufacturing and services PMIs this week. The data is expected to show that omicron is still constraining the economy although it will have improved from last week. The BOJ reiterated its dovish stance on monetary policy.

With Tokyo CPI benign, inflation worries are low in Japan compared to the rest of the world. With yields set to remain near zero, pressure on the yen will continue next week as investors head for better yields offshore. Only further negative Ukraine evolutions will change that narrative.


Singapore releases PPI on Monday and retail sales on Friday. The data will show elevated PPI due to imported inflation, and potentially another hit to consumer demand due to omicron sweeping the city-state. None of this is likely to unnerve the MAS which remains on course to tighten policy at its next 6-monthly meeting.

Economic Calendar

Saturday, Feb. 26

Economic Data/Events:

Berkshire Hathaway Q4 earnings results and CEO Warren Buffett will release an annual letter

Sunday, Feb. 27


Monday, Feb. 28

Economic Data/Events

US wholesale inventories

Atlanta Fed President Bostic speaks

ECB’s Panetta speaks on monetary policy and eurozone economic outlook

Canada industrial product price

Finland GDP

India GDP, fiscal deficit, eight infrastructure industries

Mexico unemployment

South Africa trade balance

Spain CPI

Japan industrial production, retail sales, housing starts

New Zealand ANZ activity outlook, business confidence

Australia inflation gauge, private sector credit, retail sales, companies’ operating profit, inventories

Singapore money supply

Thailand trade, capacity utilization, BoP

Sweden GDP

Switzerland GDP

Turkey GDP

Tuesday, March 1

Economic Data/Events

President Biden delivers State of the Union address

OPEC+ meets to discuss geopolitical risks to output

US construction spending, ISM Manufacturing, light vehicle sales

Atlanta Fed’s Bostic speaks on business uncertainty during an Atlanta Fed briefing

European manufacturing PMIs: France, Germany, Eurozone, UK 

RBA rate decision: Expected to keep Cash Target Rate unchanged at 0.10%

BOE’s Mann and Saunders speak

Australia Manufacturing PMI, BoP, current account balance, rate decision, consumer confidence, CoreLogic house prices, home loans

Canada GDP

China Caixin manufacturing PMI, non-manufacturing PMI

Czech Republic GDP

Germany CPI

Italy CPI

Japan vehicle sales, PMI

Mexico international reserves

New Zealand CoreLogic house prices

South Africa unemployment

Wednesday, March 2

Economic Data/Events

Fed Chair Powell delivers congressional semi-annual testimony before the House Financial Services Committee

OPEC+ meeting on output

Chicago Fed President Evans discusses the economy and monetary policy at an event hosted by the Lake Forest-Lake Bluff Rotary Club

St. Louis Fed President Bullard speaks on the outlook for the economy and monetary policy

New York Fed Executive Vice President Logan discusses Fed asset purchases at an event hosted by NYU’s Stern Center for the Global Economy

US Fed Beige Book

BOJ’s Nakagawa speaks in Kyoto

ECB chief economist speaks

BOE’s Tenreyo speaks about the UK economic outlook

BOE’s Jon Cunliffe speaks on the “Current financial stability environment” at the Oxford Union

Australia GDP

BOC rate decision: Expected to raise interest rates by 25bps to 0.50%

China Caixin services PMI

Eurozone CPI

Germany unemployment

Hungary GDP

Japan capital spending, company profits, monetary base

Mexico central bank quarterly inflation report

New Zealand building permits

India Markit PMI 

Singapore PMI, electronics sector index

Russia unemployment

EIA Crude Oil Inventory Report

Thursday, March 3

Economic Data/Events

Fed Chair Powell’s semi-annual testimony before Senate Banking Committee

US factory orders, initial jobless claims, durable goods

New York Fed President Williams speaks on the economy

ECB publishes the account of its February policy meeting

Norway’s sovereign wealth releases annual report

Eurozone services PMI, PPI, unemployment

Italy unemployment

Australia trade, building approvals, Markit PMI composite and services

Japan services PMI, composite, consumer confidence index

Singapore services PMI 

China Caixin PMI composite and services

New Zealand commodity prices

Thailand CPI

Friday, March 4

Economic Data/Events

US Nonfarm Payroll Report: US Feb Change in Nonfarm Payrolls: 400ke v 467K prior; Unemployment Rate: 3.9%e v 4.0% prior

Eurozone retail sales

France industrial production

Germany trade

Greece GDP

New Zealand consumer confidence

Hong Kong retail sales

India Markit PMI composite and services

Japan unemployment

Thailand CPI, consumer confidence, foreign reserves, forward contracts

Taiwan foreign reserves

Italy GDP

Singapore retail sales

Apple annual meeting

Sovereign Rating Updates

Finland (S&P)

Spain (DBRS)

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam