MARKETS LOOK TO THE FEDERAL RESERVE INTEREST RATE DECISION AND POLICY STATEMENT
DOVISH OR HAWKISH FOMC
The main event for financial markets this week will be the U.S Federal Reserve interest rate decision, and monetary policy statement. Most market participants expect the Federal Reserve will keep rates on-hold this month, and signal a possible rate hike in December.
We also get to see other Central Bank policymakers in action this week, with the release of the RBA meeting minutes from the recent September 5th rate decision. The Reserve Bank of South Africa and Bank of Japan will also meet later in the trading week, to decide on interest rates and deliver key monetary policy statements.
Monday 18th September, Eurozone CPI
The final reading of the eurozone's Consumer Price Index for the month of August, which measures the change in the price of goods and services from the perspective of the consumer, is expected to show a +0.3 percent increase.
The year-on-year CPI comparison figure for the month of August, is expected to show that inflation increased at the same pace as the previous year, at +1.5 percent.
Tuesday 19th September, RBA Meeting Minutes
Investors will look for further clues on the Australian economy, from the release of the Banks meeting minutes, from the previous Reserve Bank of Australia interest rate decision.
The meeting minutes will highlight why the RBA choose to keep interest rates unchanged on September 5th, and give further insight about the domestic economy and future policy decisions.
Wednesday 20th September, FED Interest Rate Decision
The Federal Open Market Committee meet to decide on where to set current U.S interest rates, with most economists agreeing that the FED will wait until December to raise rates, and keep U.S interest rates on hold this month, at 1.25 percent.
Investors will look to the FOMC's monetary policy statement for further clues on balance sheet reduction, growth and inflation expectations, and the timing of future U.S interest rate rises.
Thursday 21st September, SARB Interest Rate Decision
The South African Reserve Bank is expected to cut interest rates –0.25 percent, as the domestic economy experiences headwinds, bringing the overall interest rate at which private sector banks borrow money from the SA Reserve Bank, to 6.50 percent.
Traders should look to the market reaction from the local currency, the South African rand, with focus on the USDZAR and EURZAR pairs.
Friday 22nd September, German Manufacturing PMI
The German economy releases the first look at the Manufacturing Purchasing Managers Index for the month of September, which measures the activity level of purchasing managers in the countries vital manufacturing sector.
Economists expect the German PMI manufacturing reading to come in at a solid 59.0, which is far above the 50-reading needed for expansion, but slightly below the previous months 59.3 reading.