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Week Ahead – Pressure on Fed and BoJ to pump more stimulus; SNB meets too

Posted on March 13, 2020 at 1:50 pm GMT

As the coronavirus pandemic continues to wreak economic havoc across the globe, the pressure is on central banks to provide more stimulus amid the fast deteriorating outlook. The US Federal Reserve has already made an emergency rate reduction and is widely anticipated to follow it up with another cut next week. The Bank of Japan will be a more interesting one, however, as, although some action is certain, investors aren’t quite sure what form it will take. One central bank [..]

Will the fragmented ECB disappoint markets? – Forex News Preview

Posted on March 11, 2020 at 2:33 pm GMT

The European Central Bank (ECB) will announce its policy decision at 12:45 GMT on Thursday and even though markets have fully priced in a 10 basis-points rate cut, economists disagree. Indeed, with the central bank nearly out of ammunition and policymakers divided, the ECB may only introduce targeted lending measures and ramp up its QE programme, not cut rates. If so, euro/dollar may spike higher. In the bigger picture though, it’s becoming difficult to envision a sustained rally from here. [..]

UK budget could satisfy Tory voters; monthly GDP data may be shrugged off – Forex News Preview

Posted on March 10, 2020 at 3:29 pm GMT

UK GDP growth readings for January will be out on Wednesday at 09:30 GMT but the government’s budget may steal the show around 12:30 GMT as markets anticipate the new minister of finance to take actions against the deadly coronavirus outbreak. While the data may prove a weak market mover, the budget statement, although expected to come in less ambitious than some earlier reports suggested, may provide some floor to the pound if the government’s spending plans please the Tory [..]

Softer US inflation may build case for more aggressive easing by Fed – Forex News Preview

Posted on March 9, 2020 at 3:32 pm GMT

Consumer and producer price figures – due Wednesday and Thursday, respectively, at 13:30 GMT – will be the main release out of the United States this week. But with the economic climate being presently overrun by the sweeping coronavirus epidemic, the data will probably be overlooked as policymakers pay more attention to forward looking indicators. It also means there’s likely to be more pain to come for the tumbling US dollar, which has been battered by the collapse in Treasury [..]

Week Ahead – Will the divided ECB underdeliver?

Posted on March 6, 2020 at 2:48 pm GMT

The main event next week will be the European Central Bank (ECB) policy meeting, where markets are pricing in a 90% probability for a rate cut even though economists forecast no action. It’s a close call, but the fragmented ECB may opt for more targeted lending measures to shield the economy from the virus fallout, not a rate cut. There’s also a raft of economic data coming up, alongside the UK government budget. All told, markets will continue to dance [..]

Chinese exports probably plunged in February on virus shutdowns – Forex News Preview

Posted on March 6, 2020 at 2:10 pm GMT

China will report trade numbers for February on Saturday – the first since authorities imposed lockdowns on many cities – and so the data will be seen as an important barometer to how badly business activity was impacted by the outbreak of the coronavirus. Any indication that the factory shutdowns had a far more devastating effect on the economy than is currently being predicted is likely to spark more panic selling of risk assets when markets open on Monday. January [..]

Canadian jobs data may flag more rate cuts as loonie skids – Forex News Preview

Posted on March 5, 2020 at 3:11 pm GMT

After the Bank of Canada slashed interest rates this week, expectations are running high that more will follow, and the next clue may come from Canada’s jobs numbers on Friday (13:30 GMT). While the BoC’s bigger-than-expected cut this week was primarily motivated by the virus fallout, there have been a few other trouble spots lurking in the Canadian economy lately, which could weigh on the struggling loonie if they appear to have impacted employment growth in February. Jobs growth probably [..]

US nonfarm payrolls: An asymmetric risk? – Forex News Preview

Posted on March 5, 2020 at 11:55 am GMT

The latest US employment data will hit the markets at 13:30 GMT on Friday and although forecasts point to another decent report, that may not be enough to stop the Fed from cutting rates again soon amid virus concerns. As for the dollar, there might be more pain to come in the near term as continued Fed rate cuts would further erode its carry appeal, especially if the ECB fails to live up to the market’s dovish expectations next week. [..]

Bank of Canada to likely cut rates as virus risks grow – Forex News Preview

Posted on March 3, 2020 at 4:39 pm GMT

The Bank of Canada is expected to join the Federal Reserve and Reserve Bank of Australia in cutting interest rates this week as the global wave of central bank action to counter the economic fallout from the coronavirus outbreak begins. The BoC will announce its decision on Wednesday at 15:00 GMT and is widely anticipated to lower its overnight target rate by 25 basis points. Expectations of policy easing have pulled the Canadian dollar to 9-month lows as the virus [..]

ISM PMIs could upset dollar if virus impact confirmed – Forex News Preview

Posted on February 28, 2020 at 2:29 pm GMT

The deterioration in the US preliminary IHS Markit PMI survey in February was partially attributed to the coronavirus outbreak and markets are now turning their attention to the more important ISM PMI indices for release on Tuesday (manufacturing) and Thursday (non-manufacturing) at 15:00 GMT to confirm potential disruptions in US business activities. Should the numbers ratify concerns, especially those for the services sector, the sliding dollar may push for more losses. ISM services PMI may not show contraction after all The deadly Covid-19 disease is spreading fast [..]

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