POLITICS AND CENTRAL BANKS HEADLINE A BUSY WEEK FOR FINANCIAL MARKETS
TRUMP AND THE FED
During the upcoming trading week, financial market participants face a number of key risk events, as President Donald Trump meets with North Korean leader Kim Jong-Un in Singapore and the FED, ECB, and BOJ decide on interest rates. The Federal Reserve is widely expected to increase US interest rates 0.25 basis points this week, while speculation grows that the European Central Bank will communicate to investors the exit timing of the Central Banks current QE programme. The Bank of Japan is largely expected to keep interest rates on hold and maintain its ultra-loose stance towards fiscal policy.
The United Kingdom is also heavily in focus with the release of key Manufacturing, Employment, Unemployment and Inflation data. The American economy also releases key Producer Price Index, Consumer Price Index, Retail Sales, and Consumer Confidence data.
Monday, June 11th, UK Industrial Production
Industrial Production measures the overall output of the energy sector, factories, mines and utilities inside the United Kingdom economy. Industrial Production is highly significant as a short-term indicator of the stability and efficiency of UK industrial activity. Due to industrial production accounting for a large part of the volatility of the United Kingdom’s Gross Domestic Product, manufacturing trends can be useful for predicting UK economic output.
- The GBPUSD pair is bearish while trading below the 1.3450 level, further losses towards 1.3369 and 1.3300 remains possible.
- If the GBPUSD pair moves above the 1.3450 level, buyers may test towards the 1.3500 and 1.3616 levels.
Tuesday, June 12th, US Consumer Price Index
The Consumer Price Index evaluates fluctuations in the cost of living by measuring the changes in prices consumers pay for a set of items. CPI is used as the headline figure for inflation, as rising inflation reflects a decline in the US dollar’s purchasing power. The Consumer Price Index report keeps track of changes in the price of goods and services that a typical American household may purchase.
- The USDJPY pair is bullish while trading above the 110.00 level, buyers may test towards the 110.26 and 111.00 levels.
- If the USDJPY pair remains below the 110.00 level, sellers may test towards the 109.00 and 108.18 levels.
Wednesday, June 13th, US FOMC Interest Rate Decision
The Federal Open Market Committee members meet eight times per year to decide on monetary policy, and where to set United States interest rate. Rate changes impact interest rates for consumer loans, bonds, mortgages and the US dollar exchange rate. The FOMC policy statement is usually very important, maybe more important than the actual interest rate move made by the central bank, due to it being highly anticipated. This FOMC Monetary Policy Statement usually includes hints for future policy decisions and contains the Federal's collective outlook on the US economy.
- The USDCHF pair is bearish while trading below the 0.9900 level, further downside towards 0.9800 and 0.9750 seems likely.
- If the USDCHF pair moves above the 0.9900 level, buyers are likely to test towards the 0.9949 and 0.9989 resistance levels.
Thursday, June 14th, EU ECB Press Conference
After the ECB Interest rate decision is announced, the European Central Bank holds a monthly conference with the current ECB President, Mario Draghi. The main points of the conference are usually inflation and an economic overview or examination of the causes of the ECB's interest rate decision. During the press conference, ECB President Draghi usually gives important clues related to the future monetary policy.
- The EURUSD pair is bullish while trading above the 1.1750 level, further upside towards 1.1839 and 1.1900 levels seems possible.
- If the EURUSD pair moves below the 1.1750 level, sellers may start to test towards the 1.1700 and 1.1651 levels.
Friday, June 15th, Japan BOJ Interest Rate Decision
The BOJ Interest Rate Decision released by the Bank of Japan is a consensus amongst the board members of the BOJ on where to set the nations interest rate. The Bank of Japan meets once a month for two days to discuss economic developments inside and outside of the country. Changes in the interest rates have wide consequences for the Japanese economy, affecting consumer loans, mortgages, bonds and the exchange rate of the Japanese yen.
- The GBPJPY pair is bullish while trading above the 146.00 level, further upside towards 147.35 and 148.90 remains possible.
- If the GBPJPY pair declines below the 146.00 level, sellers are likely to test the 145.55 and 143.90 support regions.