Week Ahead: Bank of Canada, OPEC+, Eurozone CPI, and US NFP – Action Forex

With the shortened week in some areas and a plethora of economic data, there is potential for another volatile week ahead.

Last week, the RBNZ took its turn at hiking interest rates by 50bps.  This week the Bank of Canada will get its chance to discuss interest rate policy when it meets on Wednesday.  Will the BOC hike by 50bps?  OPEC+ will meet this week as well and decide whether to raise output more than the expected 432,000 bpd.  In addition, there were many comments last week regarding when, and by how much, the ECB will raise interest rates at its July meeting.  Markets may get a clearer picture when the Eurozone CPI Flash is released on Wednesday.  Also, the US will release Non-Farm Payrolls this week.  With Powell mentioning that getting inflation down may come at the expense of a 3.6% Unemployment Rate, this will be an important NFP to watch!


The RBNZ hiked rates last week by 50bps, raising the key OCR rate to 2%, as expected.  This was the 5th consecutive meeting the RBNZ has hiked rates.  However, the surprise came in the guidance that followed.  The central bank members noted that the neutral rate was between 2% and 3%, though they expect rates to rise above the neutral level.  They also increased their OCR forecasts to 2.68% in September vs 1.89% previously, 3.88% in June 2023 vs 2.84% previously, and 3.95% in September 2023 vs 3.1% previously.  The central bank also noted that it favored larger increases earlier in the tightening cycle to keep inflation from becoming persistent.  The hawkish outlook helped the Kiwi rally, with NZD/USD up nearly 2% on the week.

Bank of Canada

The Bank of Canada meets on Wednesday this week to discuss monetary policy.  At the previous meeting, the central bank said that interest rates would need to continue to increase as inflation persists above target.  The BOC raised its outlook on inflation for the first half of 2022 to 6%, up from 5% previously, and said that it sees inflation remaining well above the 2% inflation target for the year.  The April CPI print was 6.8% YoY, the highest since January 1991, while the core inflation rate was 5.7% YoY, the largest on record!  Expectations are for the BOC to raise rates by 50bps from 1% to 1.5%.  However, given the hawkish inflation outlook from the last meeting, as well as the recent high inflation readings, is it possible that the Bank of Canada may surprise the markets and raise rates by 75bps?


OPEC+ meets this week to discuss whether to raise output by more than the expected 432,000 bpd in July.  The price of crude oil was on the rise last week, with WTI trading to a high of 115.17, near 2-month highs.  With the reopening of Shanghai after a 2-month lockdown, many are expecting increasing demand.  In addition, the EU is trying to finalize its embargo of Russian oil, which is said to hopefully be completed by May 31st. This will increase demand from other areas of the world.  However, despite the demand side issues, OPEC+ sources have already said that it will stick to the existing expectations of 432,000 bpd at this week’s meeting.


With an unsettling earnings season winding down, there are still a few names to watch for this week. A few names to be on the look out for are as follows:


Economic Data

Lots of ECB members on the wires the last few weeks discussing interest rate increases at the July meeting, including ECB President Christine Lagarde.  Last week, some members were even discussing the possibility of a 50bps hike at the July meeting!  This has helped send EUR/USD bid.  This week, the EU will release its CPI Flash estimate for May. Expectations are for the headline CPI to rise to 7.7% YoY vs 7.4% YoY in April.  This reading may help to paint a clearer picture of what the ECB may do next.  In addition, The US will release Non-farm Payroll data this week.  Expectations are for 310,000 new jobs to have been created in May.  The Unemployment Rate is expected to remain unchanged at 3.6%.  Keep in mind that the Fed Chairman Powell said recently that getting inflation down may come at the expense of a 3.6% Unemployment Rate.  Therefore, expect that the Fed will be paying close attention this data!  Other important economic data due out this week is as follows:


  • EU: Economic Sentiment (MAY)
  • EU: Consumer Inflation Expectations (MAY)
  • Germany: CPI Prel (MAY)


  • Japan: Retail Sales (APR)
  • Japan: Unemployment Rate (APR)
  • Japan: Industrial Production Prel (APR)
  • New Zealand: ANZ Business Climate (MAY)
  • Australia: Building Permits Prel (APR)
  • Australia: Company Gross Profits (Q1)
  • China: NBS Manufacturing PMI (MAY)
  • China: NBS Non-Manufacturing PMI (MAY)
  • Japan: Consumer Confidence (MAY)
  • Japan: Housing Starts (APR)
  • Germany: Unemployment Rate Harmonized (APR)
  • Germany: Unemployment Change (MAY)
  • UK: Mortgage Lending (APR)
  • EU: CPI Flash (MAY)
  • Canada: GDP Growth Rate (Q1)
  • US: S&P Case-Schiller Home Price (MAR)
  • US: Chicago PMI (MAY)
  • US: CB Consumer Confidence (MAY)


  • Global: Manufacturing PMI (MAY)
  • Australia: GDP Growth Rate (Q1)
  • China: Caixin Manufacturing PMI (MAY)
  • Germany: Retail Sales (APR)
  • UK: Nationwide Housing Prices (MAY)
  • EU: Unemployment Rate (MAY)
  • Canada: BOC Interest Rate Decision
  • US: ISM Manufacturing PMI (MAY)
  • US: Beige Book


  • OPEC+ meeting
  • Australia: Trade Balance (APR)
  • EU: PPI (APR)
  • US: ADP Employment Change (MAY)
  • Canada: Building Permits (APR)
  • US: Unit Labor Costs Final (Q1)
  • US: Nonfarm Productivity Final (Q1)
  • US: Factory Orders (APR)
  • Crude Inventories


  • Global: Services PMI Final (MAY)
  • Australia: Home Loans (APR)
  • Germany: Trade Balance (APR)
  • EU: Retail Sales (APR)
  • US: Non-Farm Payrolls (MAY)
  • Canada: Ivey PMI s.a. (MAY)
  • US: ISM Non-Manufacturing PMI (MAY)

Chart of the Week: Weekly NASDAQ 100 (NDX)

Source: Tradingview, Stone X

The NASDAQ 100 made a pandemic low of 6671.91 during the week of March 23rd, 2020.  NDX then proceeded to rally to an all-time high of 16764.86 during the week of November 22, 2021, a gain of over 147%.  However, as it became more and more apparent that inflation wasn’t as transitory as the Fed thought, NDX began to pull back, including losses the last 7 weeks in a row.  Rising interest rates are not good for stocks!  Last week, the NASDAQ 100 retraced 50% of the March 2020 low to the November 2021 high, at one point trading below 11768.38.  However, the index rallied held the support level and closed the week up over 6.5%.  Price also formed a bullish engulfing pattern on the weekly timeframe, indicating that NDX may have further to run.  First resistance on the weekly timeframe is at 13020.4.  Above there, price can run to the weekly highs from March 28th at 15265.42 and then to the all-time highs at 16764.86.  First support is at the recent lows of 11492.29, then the 61.8% Fibonacci retracement level from the March 2020 low to the November 2021 high, at 10589.22.  Below there, the NASDAQ 100 can fall to horizontal support dating to February 2020 at 9736.57.

Monday is a US bank holiday and Thursday and Friday are bank holidays in the UK.  Be careful of illiquid markets during those time zones on those days.  In addition, this week will bring the BOC, OPEC+, and a plethora of economic data.  With the shortened week in some areas and a plethora of economic data, there is potential for another volatile week ahead.

Have a great weekend!


Read More: Week Ahead: Bank of Canada, OPEC+, Eurozone CPI, and US NFP – Action Forex

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