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- FED and friends to move markets in a busy week for the global economy
FED and friends to move markets in a busy week for the global economy
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Loading...The Federal Reserve in the US are about to meet this Wednesday, with market expectations for strengthening the position that interest rates will not be changed for now. This may lead to slight caution against US dollar purchases, which is reflected in consolidation movements at the US dollar crosses. Senior economist at Bloomberg Economics, Yelena Shulyatyeva, said: "A further downward shift in the Fed’s dot plot will occur, but the median should still reflect at least one rate hike this year.".“Recent remarks from policy makers suggest there could be new information about the balance-sheet unwind, including its size and timing. However, specific details concerning the assets in the portfolio are unlikely to be released at this stage,” she added.
Markets in the week ahead will be driven mainly by central bank meetings, expecting bankers in the UK, Brazil, Colombia, Iceland, Switzerland, Philippines, Indonesia, Russia, Thailand and Norway to meet. Analysts do not expect any changes to key benchmarks anywhere except in Norway where inflation figures show values above the central bank's target for the second time in the last six months, possibly leading to higher interest rates. We can expect a strengthening of the Norwegian krone, with the USDNOK and EURNOK crossovers at key levels and breakthrough in favor of NOK will activate technical formations with a positive expectation of purchases of the Norwegian currency.
This week we are also expecting a Super Thursday from UK. Mark Carney and company are unlikely to hurry up with interest rates and the overall expectation is that there will be no change from the current 0.75%. During the week, traders will also watch close on the economic data on the labor market, inflation and retail sales that last consolidated:
In addition to parliamentary talks, insistent Theresa May, who is still trying to get the green light for a deal with the EU, will make the week quite dramatic for GBP traders. For now, at the beginning of the first European trading session, the pound is subject to slight tension, but the general opinion of analysts is that the bulls will remain in control.
The fact that the Fed will release the gas from the interest rate will give relief to the emerging markets currencies, where there will be a lot of meetings with central banks during the week, as we have said above in the article. Exotic currency lovers have the opportunity to buy some exotic FX crosses against the USD, such as the Brazilian Real.
Australian dollar traders will watch Australia's data this week:
Labor market data from Australia will be posted on Thursday in small hours as new negative data may suggest that the next interest rate change will be a decrease. This may result in sales of AUD to all crosses.
Source: Bloomberg Finance L.P.
Charts: Used with permission of Bloomberg Finance L.P.
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