Urgent – Critical week: Markets are waiting for the most important Fed report… and speculation of the end of the dollar’s strength. By Investing.com

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Written by Noreen Burke

Investing.com – On Wednesday, the market awaited minutes from the Federal Reserve’s latest meeting in a shorter-than-usual holiday trading week, and investors looked for any signs of a slowing in the pace of rate hikes. In the US, the most important week for shopping begins, and it will be a tough test for the retail sector. The Economic Cooperation Organization also releases its outlook for the global economy with global PMI data. While China is trying to support the economic system, and signs of the loss of the American crown. Here’s the most important thing to know to start the week?

  1. Federal minutes

The Federal Reserve publishes for the month of November, with investors eager to check the minutes to see whether or not the Fed will slow its pace of rate hikes, and the Fed raised rates at the highest pace since the 1980s.

A number of Federal Reserve members, led by Chairman Jerome Powell, indicated that the central bank may shift to raising interest rates less than the previous one next month, in order to avoid excessive tightening unnecessarily, and not to enter the economy into a recession.

At the same time, Jerome Powell said that the interest rate will be higher than 4.6% eventually, and members believe that this percentage will be required by next year.

On the economic calendar, the market is waiting for data: , , and for the month of October and for the month of November.

  1. White Friday

In light of the high inflation and interest rates, the market is waiting for what will happen on the 25th of November with the start of the activities of the White Friday sales, which is one of the most important shopping days of the year.

Recent data shows that retail sales are higher than expected, which indicates that consumers are able to purchase by the end of the year, and consumer spending accounts for two-thirds of US economic activity.

The data indicated mixed results for the last earnings season. Wal-Mart’s latest earnings report reported higher annual sales, earnings more than expected as demand for groceries is expected to continue rising despite higher prices, while Target (NYSE:) forecasts a drop in holiday earnings, warning of “dramatic changes” in behavior. consumer, which will hurt demand.

Amazon, the world’s largest retailer, said Oct. 27 with lower-than-expected growth because budgets are weak for consumers due to inflation.

  1. Organization for Economic Co-operation and Development Outlook

The Organization for Co-operation and Development will release its outlook for the global economy on Tuesday along with preliminary readings of business activity indicators for the month of November to provide the market with a glimpse into the global economy.

Last September, the Economic Cooperation Organization forecasts indicated a decline in economic growth expectations for the next year, with the economy entering a recession.

The market is waiting for data in the Eurozone, and the US data on Wednesday, which may deepen the negative outlook.

Britain may face a prolonged recession. While the region’s economy is holding up better than expected due to a strong labor market. But recession risks loom large, with energy shortages and rising inflation.

  1. US Dollar Finally Reaching The End Of Its Rally?

The US Dollar Index reached a 20-year peak of 114.78 in September and has been falling ever since. The dollar is heading for its biggest quarterly loss since the second quarter of 2017, and investors are now wondering if the index has peaked.

The rise of the dollar dominated the scene in 2022 thanks to the Fed’s aggressive interest rate hike, which pushed the dollar to outperform all currencies globally, and made it the most attractive among investors.

Analysts of Goldman Sachs (NYSE:) said that the dollar will peak after several quarters, and added that they do not expect the dollar to decline until 2024. They added that the growth of the US economy is not expected to reach its bottom soon.

  1. China

China’s central bank pledged to adopt supportive policies for the economy on Monday, with the main lending rate stable.

The People’s Bank of China expects to keep the rate unchanged for the third month in a row, with reluctance to move the dollar’s exchange rate by adopting an easy policy.

The authorities are seeking ways to support economic growth without destabilizing the financial system.

The market is also waiting for a number of central bank meetings: a rate hike is expected by 75 basis points, while the BoK is expected to tighten monetary policy again, but perhaps only by 25 basis points.

–This report with a contribution from Reuters

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