Last week, the international financial landscape experienced considerable fluctuations, particularly as the U.S. non-farm payrolls data came in slightly below expectationsThis sentiment was echoed across various stock markets, with American indices showing a downward trendThe Dow Jones Industrial Average fell by 0.54% over the week, while the Nasdaq and the S&P 500 dropped by 0.53% and 0.24% respectivelyIn contrast, European stocks displayed modest gains, with the UK's FTSE 100 rising by 0.31%, Germany's DAX 30 by 0.25%, and France's CAC 40 by 0.29%.

This week presents numerous focal points for market watchers, notably the appearance of Federal Reserve Chair Jerome Powell at a congressional hearingAdditionally, the latest Consumer Price Index (CPI) data from the United States is anticipated to influence expectations regarding the benchmark interest rateAttention will also be directed toward further developments concerning the government’s tariff plans, which are expected to have significant implicationsFurthermore, GDP figures from both the Eurozone and the UK are likely to impact central banking policy trajectoriesAs the earnings season progresses in the U.S., major companies including Applied Materials, Cisco, and Coca-Cola are poised to take center stage, drawing investor interest.

Returning to Jerome Powell, he is set to participate in hearings in front of both the Senate Banking Committee and the House Financial Services CommitteeHis insights into the interest rate outlook will be closely scrutinized, especially following the Federal Reserve's decision in January to keep the policy rate steady while indicating no urgency to cut rates furtherAs various Federal Reserve officials are also scheduled to provide statements, analysts will be keen to decipher language pertaining to economic forecasts and potential policy shifts.

The market eagerly anticipates the release of January’s CPI data, with expectations pointing towards an increase in overall inflation to 2.9%. Previous signs of sticky inflation have fueled speculation that interest rates could remain stable in the coming months

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While it is believed that the Fed may take action to cut rates in June or July, pricing for the entire year suggests that a total of two cuts is not anticipatedThe Producer Price Index (PPI), which will also be released, is expected to reflect the ramifications of ongoing trade tensions on upstream costs.

Beyond inflation metrics, January’s retail sales, industrial output, and manufacturing output figures will serve as crucial indicators of the U.S. economy's vitality at the beginning of the yearThe labor market remains a pivotal focus as seasonal fluctuations in initial jobless claims may persist.

Moreover, any updates regarding U.S. tariff policies will be under the market's lensCurrently, the plans for imposing high tariffs on Canada and Mexico have been postponed for one month, while decisions regarding the European Union and the UK remain undecidedGiven that tariffs pose a potential inflationary threat, their implications on Federal Reserve policy could be profound.

As we move into the latter half of the earnings season, notable companies slated for reporting include McDonald's, Coca-Cola, Cisco, Applied Materials, and Deere, among others.

In commodities, oil prices are under pressure owing to a rise in U.S. crude inventories coupled with investors' concerns that tariffs may dampen economic growth and subsequently decrease oil demandFor the third consecutive week, crude futures have declined, with WTI near-month contracts dropping 2.11% to $71.00 per barrel, and Brent near-month contracts down 1.66% to $74.54.

Ozker Descaire, a senior analyst at Swissquote Bank, highlighted in a report that uncertainties surrounding U.S. trade policy and other tariff measures may hamper global growth projections and could further support the ongoing decline in oil pricesA price range of $65-$68 per barrel is increasingly seen as realisticFlynn, a senior market analyst at Price Futures Group, encapsulated the unpredictability, cautioning that market dynamics will constantly shift based on tariff impositions or removals.

Contrasting the dip in oil, international gold prices have surged, marking their sixth consecutive week of increases

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Gold futures for February delivery on the COMEX rose by 1.95%, reaching $2867.30 per ounce.

Gold has become a preferred asset in times of political and economic uncertainty, inching closer to the $2900 markA spokesperson from High Ridge Futures commented, “The core focus in the gold market remains the uncertainty surrounding U.S. tariff policies.”

The Labor Department reported the addition of 143,000 jobs in January, falling short of market expectations of 170,000, with the unemployment rate at 4%, slightly below the expected 4.1%. Charles Evans, of the Chicago Federal Reserve, remarked that strong economic conditions, characterized by full employment and easing inflation, could enable the Fed to consider rate cuts, but the uncertainty surrounding tariffs mandates a cautious approach in policy decisions.

Turning to the UK, the specter of stagflation looms largeThe European Union's statistics agency revealed a CPI increase of 2.5% in January, up from 2.4% in December of the previous yearThe European Central Bank had previously anticipated easing inflation as conducive for rate cuts to invigorate the Eurozone economy, which is battling sluggish growth, particularly in Germany, its largest economy, which has experienced contractions for the second consecutive year.

However, following the U.S. decision to impose new import tariffs on Canada and Mexico, the prospect of targeting Europe is becoming more probableHigher tariffs could lead to an unpredictable inflation outlook, with ECB President Christine Lagarde stating, “What is certain is that this will have negative ramifications globallyThe effects of tariffs could range widely between inflationary and deflationary, largely influenced by whether differing economies engage in rate adjustments or retaliatory measures.”

The coming week will reveal important industrial production and last year's fourth-quarter GDP data from the EurozoneAmong major economies, particular attention will be paid to unemployment rates in France and January’s CPI figures from Germany and Spain.

Last week, the Bank of England announced a surprise rate cut of 25 basis points, with two out of nine committee members advocating for a 50 basis point cut

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