The euro was in the doldrums during the lockdown period until the two largest EU economies came together in support of a new recovery fund which would give out grants, sending the common currency to a three-month high. The amount announced is not significant but perhaps is considered enough to lead to more integration if it is finally approved at the EU virtual summit this Friday which will also discuss the long-term EU budget. Expectations are for the debate to [..]
New Zealand will be the last of the major economies to report GDP estimates for the first quarter. The data, due at 22:45 GMT on Wednesday, will likely show the Pacific island nation recorded its first economic contraction in nine years in the first three months of 2020. Policymakers at the Reserve Bank of New Zealand will be keeping a close watch on the numbers as they ponder whether to take rates to negative territory. Although New Zealand is now [..]
The latest employment numbers out of Australia will hit the markets at 01:30 GMT Thursday and forecasts point to more job losses, though that may be more of a counting issue than a reflection of real economic conditions. The high-flying aussie could spike lower if the data disappoint, but its broader direction will hinge mainly on risk sentiment. On that front, much will depend on how the global virus picture evolves, especially in America. Statistical shenanigans? Australia is expected to [..]
As Britain faces its worst recession in 300 years, the Bank of England will be hoping to use its two-day policy meeting on June 17-18 to inject another dose of stimulus into the ailing UK economy. After the bigger-than-expected plunge in GDP in April, the Bank is almost certain to announce a large increase in its asset purchases on Thursday at 11:00 GMT. But with Brexit once again rearing its ugly head, policymakers’ determination to keep the economy afloat may [..]
The Swiss National Bank (SNB) will conclude its policy meeting at 07:30 GMT Thursday, and strangely enough, markets are pricing a 50% chance for a small rate cut. While some more stimulus would make sense, the SNB only has one ‘rate bullet’ left in the chamber so it might prefer to save it for a rainier day, especially now that the upward pressure on the franc has eased. In case policymakers indeed keep their rate powder dry, the franc could [..]
In America, important events begin early this week. On Tuesday, we get retail sales data for May (12:30 GMT), ahead of Fed Chairman Powell’s semi-annual testimony before the Senate (14:00 GMT). Powell will also appear before the House of Representatives on Wednesday (16:00 GMT) and his Q&A sessions with lawmakers on both occasions could be crucial for the dollar and risk sentiment. In the bigger picture, the main driver for markets will be how quickly US virus cases keep rising. [..]
An upcoming summit of EU leaders could decide the fate of the European recovery fund and the direction of Brexit talks, setting up possible stumbling blocks for the euro’s and pound’s rebounds. The pound will also be keeping an eye on the Bank of England’s policy meeting, with more QE looking likely. The Bank of Japan’s and Swiss National Bank’s respective meetings are not expected to be as exciting. But as some of the recent optimism starts to fade, it [..]
A flurry of UK data including GDP numbers for April will hit the markets at 06:00 GMT on Friday, and forecasts point to abysmal readings. Yet, economic data hardly move the markets anymore, so the pound’s performance will likely be shaped by a combination of Brexit news and global risk sentiment. The risks surrounding the currency seem tilted to the downside, though any potential losses may be more visible against the resurgent euro, not so much against the dollar that’s [..]
The Federal Reserve’s Open Market Committee (FOMC) will conclude its two-day monetary policy meeting on Wednesday, announcing its decision at 18:00 GMT. After unprecedented central bank intervention since March to prevent a virus-induced economic meltdown, policymakers are not expected to make significant changes to their emergency programs this week. However, with the initial recovery from the lockdown easings proving stronger and faster than anticipated, everyone will be watching to see whether Fed Chairman Jerome Powell shares this optimism when he [..]
As global markets set their sights on a quick recovery from the COVID-19 crisis, key economic data for April – when the pandemic impact is thought to have peaked – will likely be sidelined next week. The Federal Reserve might also struggle to attract the usual attention when it holds a scheduled meeting as investors are not anticipating any new policy action. But as safe havens like the dollar and yen give way to virus-battered currencies, there are plenty of [..]
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