First New Year’s week was noted by the publication of data on the Chinese PMI. This event caused the increased volatility of the Forex market by the end of the week. The data was quite weak and this factor forced some traders to replace their “landmarks” in favor of the Japanese yen.

Chinese PMI totaled 51 points, while the projected figures were about 51.2 points.

Also, this event was related to rebound of USD/ JPY from already formed at the end of last year long-term maximum. The British pound also came under pressure because of not so optimistic Chinese data.

As for the Euro, this Forex currency is not “paid” significant attention to the good performance of the industrial PMI of Italy and Spain, which may contribute to its further weakening against the U.S. dollar.

In Spain, the PMI rose to 50.8 points, while in Italy the comparable figure was 53.3 points. Nevertheless, this positive background had no significant support to the pair EUR/USD, which showed a decrease in the beginning of the new year. By the end of last week, the pair was in the region of 1.3598 against 1.3756 at the beginning of it.

This week we are waiting for formal appointment of J. Yellen as head of the US Fed. According to the rules, her candidacy have to pass a voting process but it has long been clear to everyone what Yellen will be elected as a chairman of one of the most influential financial regulators.

The main event of the week will be the publication of data on the U.S. labor market. Release is scheduled for Friday. November’s was strong enough and showed good growth in employment. A number of jobs above 205.000 may add an additional to those, who are waiting for the next step of quantitative easing’s program reduction. This, in turn, may lead to a strengthening of the U.S. dollar against its major competitors.

Traders should also pay attention to the U.S. ISM data for the services sector, which will be released today and to the protocol of FOMC December’s meeting (to be released on Wednesday), at which it was decided to reduce the QE program.

In Europe, the ECB and the Bank of England are going to a meeting on Thursday to decide on further monetary policy. The Bank of England is unlikely to take any unexpected measures. As for the European regulator, it is not so predictable, since the low level of inflation in the euro area gives the opportunity for adoption of new incentive-based measures such as the introduction of negative interest rates on deposits.

Analysts say that in anticipation of scheduled for this week meeting, the ECB may face a pretty strong political pressure, especially if Tuesday the CPI index in the euro zone will be worse than expected.

Despite the fact that most economists do not expect the adoption of new incentive-based measures, we must remember how ECB literally shocked the market unexpectedly lowered interest rates by 25 basis points at a meeting on November 7.

Even if we take into account the fact that the new measures will not be accepted, this theme may well sound during a post-meeting press conference.