Week Ahead – Markets remain volatile

Investors on edge as Ukraine tensions rise

There’s been no shortage of volatility in the markets so far this year and it doesn’t look like that is going to change any time soon. The focus has shifted slightly in recent weeks from monetary policy to geopolitics as Russian troops have built up on the Ukrainian border and the West has warned of an imminent invasion.

This has only added to the anxiety that has been evident in the markets for weeks and unless there is a significant de-escalation, the rollercoaster ride that has been 2022 looks set to continue. All sides still appear to have a desire to find a diplomatic solution but things can change quickly which will keep traders on their toes.

As always, there will be a heavy focus on central banks next week and what policymakers are saying ahead of upcoming meetings. Inflation is continuing to rise and a major escalation in Ukraine could make life even harder. So many rate hikes are already priced in this year but there’s always room for more.

Inflation to keep pressure on the Fed?

Invasion warnings keep coming but diplomatic efforts continue

RBNZ expected to raise interest rates


The focus on Wall Street will primarily remain on geopolitical tensions, but Fed tightening bets could get bolstered after key earnings updates from retailers, economic data about the consumer, and the Fed’s preferred inflation gauge.  If the consumer continues to show resilience and inflationary pressures suggest the peak might be more than a couple of months away, the case for a supersized March liftoff will grow.   

Atlanta Fed President Raphael Bostic will take part in a moderated discussion about the Fed’s role in the community on Tuesday.  Fed speak on Thursday will include Thomas Barkin discussing the economic outlook, Raphael Bostic on banking in a digital era, and Loretta Mester covering monetary policy.   


The next week is littered with economic data releases but none are likely to be game-changers. Granted, the final CPI could throw up a surprise in these anxious times but there isn’t much of a history of that. The PMIs could also offer some insight into future inflationary pressures that are building.

Speeches from ECB policymakers will be key next week ahead of the March meeting, with President Christine Lagarde among those due to speak on Friday.

Ultimately though, next week is about maintaining peace in the East. We’re still getting daily warnings of an imminent Russian invasion of Ukraine, despite assurances that this is not the plan. There have been contradictory reports of troops leaving/arriving at the border this week which has further muddied the picture. US Secretary of State Antony Blinken accepted an invitation to meet Russian Foreign Minister Sergei Lavrov in Europe next week which has offered hope that an invasion won’t come before. 


Next week gets underway with PMI releases on Monday but the key focus will be the Monetary Policy Report Hearing on Wednesday, along with other appearances by BoE policymakers around it. Granted, the PMIs could offer some inflation clues but with the CPI once again surpassing expectations in January and markets priced for some aggressive tightening, the views of the MPC will be the headline. 


The focus next week will no doubt be on the Ukrainian border and whether Western intelligence of an imminent invasion is accurate. Lavrov’s meeting with Blinkin later in the week could be the key event.

The CBR releases the monetary policy report on Monday as the tightening cycle continues and further hikes could follow.

South Africa

South Africa’s Finance Minister will present the 2022 budget in parliament on Wednesday.

Unemployment and PPI are the only standout data releases as the SARB weighs up more hikes after successive increases in November and January.


A relatively quiet week by Turkey’s standards with a few data releases the only events of note and even these are mainly tier three. The CBRT refrained from cutting rates again in February as it conducts its review following 500 basis points of cuts in four meetings late last year. 


It is a light economic calendar in China, with no tier-one releases. On Monday, China releases loan prime rates (LPR) for February. After cuts in January, China’s banks are expected to maintain both the February 1-year LPR at 3.70% and the 5-year LPR at 4.60%.


No major data or events next week.


RBA Governor Philip Lowe will give online remarks to the G20 meeting in Indonesia on Digital Payments after the market closes on Friday.  

Australia’s economy continues to strengthen and this week’s events are expected to reflect improving conditions.

On Monday, manufacturing, services, and composite PMIs will be released, then Wednesday will offer construction and wage growth data for 2021 Q4. Construction work done is expected to rebound strongly with a gain of 2.1% q/q after a weak reading of -0.3% in Q3. The Wage Price Index is forecast to rise 2.4% y/y, up from 2.2% in the third quarter. 

Private capital expenditure will be published on Thursday. The consensus stands at 2.5% q/q, following a -2.2% reading in Q3. 

New Zealand

The Reserve Bank of New Zealand is widely expected to raise interest rates when it meets on Wednesday, in response to inflationary pressures and a robust labor market.

Inflation has been rising, primarily due to higher energy costs and there is the danger of a wage-price spiral since wages haven’t kept up with inflation. The labour market remains tight, with unemployment at just 3.2%.

The RBNZ is expected to raise rates by 25 basis points, bringing the cash rate to 1.00%. Further hikes are expected in the coming months, although the pace of rate moves will depend on economic conditions.

On Friday, New Zealand releases retail sales for 2022 Q1. Retail sales plunged in the fourth quarter, with the headline reading declining by 8.1% and core retail sales falling by 6.7%.


The spotlight will be on Japanese inflation indicators in the coming week. Inflation has been rising in Japan after decades of deflation. Still, inflation remains well below the Bank of Japan’s target of 2%. 

The January reading of BoJ Core CPI, the central bank’s preferred inflation gauge, will be released on Tuesday. The indicator rose 0.9% y/y in December, up from 0.8% and its highest level since May 2016. 

On Friday, Tokyo Core CPI for February will be released, giving us a good idea of what to expect from February inflation releases.


Singapore has experienced rising inflation, with a 4.0% gain in December. January CPI, which will be released on Wednesday, is expected to remain high. The upward price pressures are attributable to higher food prices, pent-up demand after reopening, and supply disruptions

Economic Calendar

Friday, Feb. 18 (After Market Close)

  • RBA Governor Philip Lowe to give remarks on Digital Payments to G20 meeting in Indonesia

Monday, Feb. 21

Economic Data/Events

European Flash manufacturing/services PMIs: Eurozone, France, Germany, and the UK

Australia Manufacturing PMI

China property prices, loan prime rates

Fed Governor Bowman speaks at ABA National Conference for Community Bankers.

EU Foreign Ministers meet in Brussels

UK PM Johnson to end of Covid restrictions and legal rule to self-isolate.

Sweden Riksbank minutes

Thailand GDP

Japan PMI, machine tool orders

Tuesday, Feb. 22

Economic Data/Events

US Conference Board consumer confidence

Italy CPI

BOE Member Ramsden speaks at the National Farmers’ Union Conference

Australia consumer confidence

New Zealand credit card spending

Japan PPI services

Germany IFO business climate

Hungary rate decision: Expected to raise interest rate 50bps to 3.40%

Mexico international reserves

South Africa unemployment

Wednesday, Feb. 23

Economic Data/Events

Eurozone CPI

Singapore CPI

BOE Governor Andrew Bailey appears before the Treasury Committee.

South Africa budget presentation

New Zealand rate decision: Expected to raise official cash rate 25bps to 1.00%

Australia wage price index, construction work done, Bloomberg economic survey

Thailand trade

Thursday, Feb. 24

Economic Data/Events

US new home sales, Q4 GDP (2nd reading), initial jobless claims

Fed’s Mester and Bostic to speak

Mexico central bank releases monetary policy minutes

The first annual Bank of England Agenda for Research (BEAR) Conference: The Monetary Toolkit. BOE Governor Bailey gives opening address, Deputy Governor Broadbent will moderate a panel and Chief Economist Pill will deliver the closing remarks

New Zealand trade

Australia private capital expenditure

Japan department store sales

EIA Crude oil inventory report

Friday, Feb. 25

Economic Data/Events

US consumer income, durable goods, University of Michigan consumer sentiment

France CPI, GDP

Germany GDP

Mexico GDP, trade

Russia industrial production

Singapore industrial production

Eurozone economic confidence, consumer confidence

New Zealand retail sales

Japan Tokyo CPI, coincident index

Thailand production index, capacity utilization

Sovereign Rating Updates

Denmark (S&P)

Belgium (Moody’s)


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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