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Investors await the FED, BOE and BOJ interest rate decisions next week
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Loading...There is undoubtedly one of the most important weeks of the year in which we will witness three basic interest rates decisions and Non Farm Payrolls from the United States. We expect Bank of Japan, Bank of England and FED to decide on interest rates and to present their intentions for the development of monetary policies. In addition, we expect Friday data on new jobs in the United States. Consensus forecasts are 190,000 new jobs, with better data bringing dollars out of lethargy, but worse will lead to a deeper correction than resistance levels where the greenback is. The Technical Dollar Index is at a key level of resistance that failed to fall over the past two months. After forming a double peak, the short-lived ascending channel was drilled, then successfully tested in the previous two weeks. Price Action, which the price registers, is indicative of moods among traders, and we can conclude that the resistance zone remains significant with a high probability of a turnaround to a downward trend. In addition, the Fibonacci 50% correction of the main downward trend, as well as DeMarker, is pointing downwards from a surplus zone.
FX: Dollar index at key levels
Although no interest rate increase is expected from the Fed next week, the bank's report will be important to traders. If hawkish moods among Fed members persist, we can expect a certain amount of support, but with lesser effect. Conversely, if we see a decline in positivism among Central Bank members, the USD will most likely record a sharp and deep decline.
Unlike Japan and the United States, where no interest rate is expected, Bank Of England is likely to raise another key interest rate. The probability of raising interest rates is close to 80%, suggesting that the base interest rate is likely to rise by another 25 basis points to 0.75%. Investors will follow closely the Dot Plot of the bank from where they will draw information on current moods among bank members. To this day, they remain relatively positive. 4 will surely vote for promotion, while only 2 remain opposed to raising interest now, suggesting that a change in their thinking is very likely. As for those who are neutral in terms of interest, they have positive attitudes. I expect strong movements in the pounds in it support, but with limited effect, as much of the expectations are already accrued in price.
The moods at Bank Of England before the interest rate decision next week
Next week, we expect a lot of economic data from the Eurozone, such as GDP, retail and production index. Better data will be well accepted by EUR-investors, who expect the ECB to finally undertake a significant tightening of monetary policy. Broken through the prism of the ECB, better data will support QE termination, as well as an increase in the base rate as early as the middle of 2019.
Economic calendar for the upcoming week - 30.07. - 03.08.2018г.
Monday
02:50 Japan - Retail Sales
10:00 Switzerland - KOF Leading indicator
17:00 USA - Pending Home Sales
Tuesday
01:45 New Zealand - Building permits
02:50 Japan - Industrial production
04:00 China - Industrial Production
04:00 New Zealand - Business Confidence of ANZ
No Japan Time Schedule - Basic Interest Rate and Monetary Policy Report
09:00 Germany - Retail
10:55 Germany - Unemployment rate
12:00 Eurozone - CPI
12:00 Eurozone - GDP
12:00 Eurozone - Unemployment rate
15:30 Canada - GDP
17:00 USA - Consumer Confidence
23:30 US - API Petroleum Stocks
Wednesday
Switzerland - Holiday
01:30 Australia - AIG Production Index
01:45 New Zealand - Unemployment rate
04:45 China - Caixin Production Index
10:55 Germany - Production PMI
11:00 Eurozone - Production PMI
11:40 UK - Production PMI
15:15 USA - ADP Non Farm Payrolls
17:00 USA - ISM Production Index
17:30 US - Crude Oil inventories
21:00 USA - Fed monetary policy report
21:00 United States - Basic Interest Rate
Thursday
04:30 Australia - Trade Balance
11:30 UK - Construction PMI
14:00 United Kingdom - Interest Rate decision
14:00 United Kingdom - MCP Dot Plot
14:00 United Kingdom - Bank Of England Report on Monetary Policy
15:30 USA - Jobless claims
Friday
04:30 Australia - Retail Sales
04:45 China - Services PMI
10:15 Switzerland - CPI
11:30 UK - Services PMI
12:00 Eurozone - Retail Sales
15:30 USA - NFP
15:30 Canada - Trade Balance
20:00 USA - Baker Hughes oil rig count
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