A busy central bank week will reveal market trends

Frank Walbaum FX Strategies.Asia

Important news for the week

Wed, 29th, 14:45 CET CA BoC interest rate decision.
Wed, 29th, 19:00 CET US FED interest rate decision.
Thu, 30th JP BoJ interest rate decision.
Thu, 30th, 14:15 CET EU ECB interest rate decision.
Fri, 31st, tentative US Core PCE price index.

Rate decisions

This week will offer a lot of volatility moving forward. The various interest rate decisions might move markets. The recent slide in the CAD might continue. A rate cut of the BoC, which is being expected, might cause the EURCAD and USDCAD to push higher again. Furthermore Jerome Powell is also expected to reduce rates in the US. The Dollar, however, might not weaken much as such move has been long expected. The negative sentiment of the Dollar has recently started to fade and the DXY is rising again. While no changes are expected from the BoJ as well as the ECB the latter event might be interesting. Words from ECB’s Lagarde might move markets depending on her future outlook of the rate development. A potential hint to falling rates could then set the Euro unter pressure again.

Market talk

Stock markets seem to continue their upside after Friday’s weaker than expected consumer price index is expected to support Jerome Powell in cutting interest rates during this week’s meeting. Falling prices wouldn’t cause a rate cut to hence boost inflation again but instead help supporting the economy and the shrinking workforce. Precious metals look like they will fall further. After the record gais in recent weeks falling prices might now continue to push markets lower. The month- end might be interesting to watch, as this might lead to a bearish candlestick pattern, which could increase the pressure. Also oil prices seem to move lower again. After the recent push due to the added sanction over Russia from the US the upside seems limited now.

Tendencies in the markets

Equities positive, USD stronger, BTC positive, ETH positive, oil weaker, Silver weaker, Gold weaker.

Author

Frank Walbaum

FX Strategies.Asia

Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.

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