Focus goes beyond data (Daily analysis 17.01.2022)

The belief that the Federal Reserve will raise interest rates several times in 2022 has cleared among investors. There will be little information in the coming days that could change this view.

The dollar has started to regain strength over the last few days, and its rebound has room to continue. The EUR/USD after approaching 1.15 has turned back towards the 1.14 area, which is the upper limit of a multi-week trading range.

The week in the US begins with Martin Luther King Day, and there will be no major macroeconomic data for the rest of the week. The sentiment, of course, mainly on equity markets, will be shaped by the accelerating cycle of financial data releases by companies listed on Wall Street. In Europe, we should mainly note the ZEW index, an important sentiment barometer.

Emerging markets: a central bank meeting and geopolitics in the limelight

In the emerging markets space, attention is drawn by the weakness of the ruble (in relation to the Polish zloty, it plunged by 6% in a month despite the oil market making up for the entire slump after the discovery of the omicron variant of the coronavirus) and the piling up of geopolitical risks related to the activity of the Russian military deployed near the border with Ukraine.

On Thursday, interest will be focused on whether Turkey's central bankers will stay true to their declaration that the policy easing cycle pushed by President Erdoğan has ended. Let us recall that the total reduction of interest rates from 19 to 14%, with the annual consumer inflation rate well above 20% and the lack of independence of the central bank have significantly accelerated the downward spiral of the Turkish lira, which, despite the recent rebound, is over 40% weaker against the zloty and the main currencies than a year ago.