The Reserve Bank of Australia is due to announce its next policy decision on Tuesday at 0430 GMT and is widely expected to keep interest rates unchanged, pausing after two consecutive cuts. However, with the Australian dollar coming under heavy selling pressure over the past week, its clear investors are anticipating more reductions in the months ahead. Hence, the language in the RBA’s statement will be carefully examined for clues about the likely scale of future cuts. RBA to pause [..]
In a relatively busy week for the US calendar, the popular Nonfarm payrolls report will steal the show on Friday at 1230 GMT, two days after the FOMC policy meeting. It’s expected to indicate that the labour market is still a bright spot in the US economy and hence supportive of consumption. The data, however, are likely to leave the window open for further monetary easing in the year ahead as risks continue to linger on the horizon. In June, new job positions surged by a surprising 224k, surpassing [..]
The Bank of England will announce its latest policy decision on Thursday at 11:00 GMT and will also publish its quarterly inflation report, followed by a press conference with Governor Mark Carney at 11:30 GMT. Markets are anticipating the Bank to strike a more dovish tone but whether this will involve signalling a rate cut is far from clear. What is certain, however, is that the meeting is unlikely to halt sterling’s slide, which is under pressure from the growing [..]
The Federal Reserve is virtually certain to cut rates on Wednesday at 18:00 GMT – the question is how deep it will slash. A 50 basis points (bp) cut seems excessive given recent Fed commentary, so a 25bp move is probably on the cards instead. Since markets still price in a ~20% chance for a 50bp cut, the immediate reaction in the dollar may be higher. Whether any surge is sustained though, will depend on the signals that policymakers send [..]
The Flash Harmonized Consumer Price Index (HCPI) and initial GDP growth estimates will be on the watchlist early on Wednesday. Following a dovish policy meeting by the European Central Bank last week, the data could assure markets that further monetary easing is the right choice for the months coming ahead. What markets don’t know yet though is the size and the duration of the upcoming stimulus package, with investors and hence the euro eagerly waiting this week’s data to give [..]
Australia will publish quarterly inflation data on Wednesday at 01:30 GMT amid a stepping up by the Reserve Bank of Australia in its efforts to spur price growth. The RBA has cut rates twice since June on slowing economic growth and stubbornly low inflation and so the latest readings on the consumer price index (CPI) will be dissected for clues on the prospect of additional easing by the central bank. The Australian dollar is looking highly vulnerable ahead of this [..]
Investors will be glued to their screens next week, with a plethora of central bank meetings and an avalanche of data releases set to provide ample excitement. The Fed is certain to slash rates, though probably only by a quarter-point, which may briefly lift the dollar given expectations for even more aggressive action. The BoJ and BoE are both likely to soften their tones, while in the euro area, growth and inflation data may decide how forcefully the ECB acts [..]
The Bank of Japan will announce its latest policy decision on Tuesday. There is no set time for the announcement, but they are usually made slightly before 03:00 GMT. As the BoJ’s peers have begun cutting or are planning to cut rates, pressure is growing on the central bank to ramp up its already massive stimulus program. But with few tools left at their disposal, policymakers are likely to be hesitant before approving a new round of easing. Making matters [..]
The first estimate of US GDP for Q2 is due at 12:30 GMT on Friday, and may be crucial in shaping the narrative over how deep the Fed will cut rates next week. While a 25 basis points (bp) cut is certain, markets also assign a ~20% chance for a ‘double’ cut of 50bp, which seems excessive. Hence, the dollar may have room to recover for now, if these aggressive bets are scaled back. The US economy likely grew at [..]
Three months before Draghi’s departure, chances for a looser monetary policy are rising higher as heightening global risks are threatening to keep the European Central Bank (ECB) on guard. Nevertheless, more stimulus will likely be a matter of guidance for the future at Thursday’s policy meeting rather than an order for execution despite expectations for a weaker flash composite PMI. Eurozone flash Composite PMI to inch lower The ECB is struggling as Eurozone economic indicators have yet to show any sign of improvement, while [..]
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