In-depth Analysis

Focus on central banks meetings (Fed, BoJ, SNB and BoE)

 

On Monday 19th: Canada releases its Raw Materials Index, and Australia’s Jonathan Kearns of the RBA speaks.

On Tuesday 20th: The Australian Monetary Policy Meeting Minutes are published, Building permit data from the US is due, and Canada publishes CPI data.

On Wednesday 21st: Fed Monetary policy decision is released and forecasts are made for the coming two years by the FOMC, Crude oil stocks are reviewed for the US, and American Existing home sales reports are published.

On Thursday 22nd: Bank of Japan and Bank of England monetary policy decisions are released, the US Current Account data and Initial Jobless change, followed by the Swiss interest rate decision.

On Friday 23rd: US and European Manufacturing and Services PMI’s due, Core Retail Sales published from Canada, and a webinar featuring Fed Chair Powell goes live. 

Weekly outlook

 

Some highly anticipated economic releases for traders this coming week as the US, the UK. and the Swiss central banks meet to discuss and decide on interest rates for the coming period as inflation has somewhat started to slow down. The balancing act continues as they are both tasked with trying to avoid almost certain recessions while trying to bring inflation back to the target range of around 2%.

 

From a number of European countries and the US are both the monthly Manufacturing and the Services PMI’s for a look at the individual economies from the perspective of purchasing managers and their spending for upcoming projects and services.

Monday 19th of September

 

A quiet day for economic releases, Canada publishes its Raw Materials Price Index (RMPI) for the month of August, which calculates the price change in raw materials that manufacturers purchase for their products, including international imports. Falling prices are either passed on to consumers as discounts or boost profit margins for the producer, rising prices do the opposite.

 

In Australia, Head of Domestic Markets for the Reserve Bank, Jonathan Kearns, gives a keynote address at the AFR Property Summit today. Investors watch his public statements for clues about upcoming monetary policy decisions.

Tuesday 20th of September

 

In Australia, the Minutes from the previous monetary policy meeting on September 6th are released as they are usually in the following two weeks. This will include everything taken into consideration for the previous rate increase to 2.35%.

 

The US publishes its latest Building permits data for August for a look at the change in the number of new permits that were issued by the government. Expectations are for a drop from 1.685M to 1.610M.

 

Canada will release its CPI data today. For the month of August compared to July there is expected to have been a drop from 0.1% to -0.1%.

 

Also, ECB President Christine Lagarde speaks.

Wednesday 21st September

 

The Federal Reserve is due to meet for its Monetary Policy Meeting where it will decide on the direction of interest rates for the coming period. The Fed has been busy increasing rates to put the brakes on inflation this year, as they currently sit at 2.25%- 2.50% after increasing its benchmark rate a total of 225 basis points in 2022. 

 

Analysts believe rates are set to increase by another possible 75 basis points in this month as inflation still sits over 8%. The FOMC also releases its forecast for the economy and inflation for the next two year period.

 

Also in the US, Crude Oil is expected to have increased over the week by .833M on the previous week’s 2.442M.

 

The Existing Home Sales for the US outlines the change in the number of sold existing properties from the previous month, and is expected to show a drop from 4.81M to 4.70M.

Thursday 22nd of September


Traders will be watching different monetary policy meetings today, starting with the Bank Of Japan which is expected to leave its interest rate unchanged at -0.10%.

 

The Bank of England also releases its monetary policy decisions. The BoE has been steadily raising rates this year for a total of 165 basis points so far. They’re currently sitting at 1.75% after the previous meeting’s 50 basis points bump, experts are tipping for another increase of the same 50 points up to 2.25% this week, as inflation sits just below 10%.

 

From the US, the Current Account Index for the second quarter is expected to report an increase from the previously record-breaking -291.4B to -261.4B which shows the value of exports minus imports of goods and services and interest payments for the month. Forex traders watch this figure as it strongly impacts the value of the USD.

 

The US Initial Jobless Claims are expected to be up from 213K to 218K for the week prior. The increase shows more people filed for unemployment insurance over the week.

 

From Switzerland, the Swiss National Bank will set the target range for interest rates. Forecasts are for an increase from the world’s lowest -0.25% to 0.50%.

Friday 23rd of September

 

A number of Manufacturing and Services PMI’s are released today from both Europe and the US. Readings above 50 are said to be indicative of economic growth in the sector in question, whereas below 50 is a sign of contraction. The activity levels of purchasing managers are important for traders interested in the country’s economic performance.

 

French Manufacturing PMI is set to drop from 50.6 to 49.9, while its Services PMI is also expected to drop from 51.2 to 50.4. The German Manufacturing PMI is set to drop from 49.1 to 48.3, and its Services PMI is also expected to drop from 47.7 to 47.2. In the Eurozone, a drop from 49.6 to 48.8 is expected for the Manufacturing PMI, and a further drop is forecasted for the Services PMI from 49.8 to 49.1. 

 

British Manufacturing PMI is expected to increase from 47.3 to 47.4 and Services PMI is forecast to drop from 50.9 to 50.3. The US Manufacturing PMI is expected to drop from 51.5 to 51.2, and Services PMI looks set to increase from 43.7 to 45.0.

 

From Canada comes the Core Retail Sales data, which measures the change in the value of retail sales (excluding cars) for a look at what’s happening with consumer spending as it relates to the economy. This is expected to have dropped for the month of July compared to June, from 0.8% to -1.1%.

 

The Federal Reserve hosts a webinar with leaders from businesses and various major sectors of the economy as a means to open conversations around re-building the economy post-pandemic. Fed Chair Jerome Powell is due to deliver opening remarks during the ‘Fed Listens’ Webinar.

 

 

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