American FX Outlook: World’s most important central bankers are set to speak as House of Commons votes on Brexit future

What you need to know before markets open

• People’s Bank of China, Chinese central bank published a paper suggesting lower banks’ reserve requirement ratios (RRR), which would boost market liquidity and loosen monetary conditions.
• World equity markets reversed a negative streak on China’s move.
• Cryptocurrencies dropped after the second South Korean exchange said it was hacked stealing $32 million worth of token, mostly Ripple.
• Sintra central bankers’ symposium headlines the four most important central bank governors afternoon in London.
• The UK House of Commons is set to vote on Brexit related laws in an attempt to revert the House of Lords Monday’s decision strengthen the position of parliament in dealing with the withdrawal conditions after leaving the EU.

Wednesday's upcoming market moving events

• The RBA Governor Philip Lowe, The Federal Reserve Bank Chairman Jerome Powell, the Bank of Japan Governor Haruhiko Kuroda and the ECB President Mario Draghi all appear in the same panel discussion in central bankers’ symposium in Sintra at 12:30 GMT.
• The US existing home sales are seen reaching 5.52 million remaining unchanged over the month in May.
• The UK House of Commons is set to vote on the UK government’s proposal of Brexit legislation that has been ousted on Monday in the upper chamber of House of Lords.
• The New Zealand Q1 GDP is expected to rise 0.5% Q/Q while increasing 2.5% y/y.

Major market themes

• Sterling fell to lowest level in last 6 months ahead of the House of Commons Brexit laws voting.
• Euro is trading also slightly lower as trade war tensions eased, but the US Dollar remains supported by the monetary policy divergence.
• Watch Euro factoring in comments from ECB President Draghi speaking later on Wednesday.
• Watch NZD react to Q1 GDP release. 

Earlier in Asia/Europe

• The Bank of Japan meeting minutes revealed that one member, most likely Goushi Kataoka,  voted in favor of more easing in order to meet the inflation target.
• German PPI rose 0.5% m/m while increasing 2.7% y/y in May.
• The ECB executive board member Benoît Cœuré was chairing Panel “Microeconomics of price and wage-setting” at ECB Forum on Central Banking in Sintra.