Interesting news to consider before you trade

Analyse der Finanz- und Warenmärkte

The dollar has been weakening throughout April, and last week was no exception. Despite progress in the economic recovery, the Fed intends to stick to its stimulative monetary policy.

The euro strengthened on Friday amid the publication of strong business activity indices. It is clear that the recovery of the Eurozone is gaining momentum (and this is despite the increase in the number of people infected with coronavirus and widespread quarantine).

Even high retail sales and business activity did not help the pound. UK consumer spending rose 5.4% in March, more than triple the forecast.

Australia's economy is also gaining momentum, as evidenced by increased activity in the manufacturing sectors.

The New Zealand and Canadian dollars finished Friday's trading in a sideways position. Since the "hawkish" statement of the Bank of Canada, the pair USDCAD did not show much progress. Partially it is connected to presence of a considerable number of short positions on it. Data on retail sales and GDP of Canada will be published in the coming week.

• Fed meeting on monetary policy.

The most important event this week will be the FOMC meeting on Wednesday evening. Given the latest data on the US economy, the unemployment rate is likely to fall to record lows by this fall. This could prove to be one of the fastest ways out of a major economic crisis in decades.

Against the background of such data, the Fed is likely to adhere to a gradual reduction in the provision of liquidity in the style of the Bank of Canada, depending on the development of the economy. As we all understand, any news about QE cuts can make the markets a little nervous.

• Events of the week.

Monday will start with the release of data on the durable goods market and the Dallas Fed manufacturing activity index. In addition, the markets will pay attention to the information about the IFO business climate in Germany. In the last case, it is worth noting that the business sector remains optimistic about economic conditions in the largest economy in the Eurozone. The business climate has improved over the past 2 months, indicating an increase in business confidence.

On Tuesday, the US house price index will be released. Here, we monitor how the recovery affects inflation. Also on Tuesday, we will see data on consumer confidence in the United States. We expect more than strong data.

The Bank of Japan will publish a decision on the rate, but any changes on it or on its QE program are extremely unlikely, given that the bank made the last changes to the program only in March.

On Wednesday, the focus will be on the Fed meeting, which is not expected to bring any changes to monetary policy. Instead, we'll be keeping a close eye on the press conference, where some useful comments may appear.

Wednesday is also an important day for the OPEC+ meeting. OPEC and non-OPEC countries surprised markets at their last meeting by announcing a phased increase in production for May, June and July. The upcoming meeting will obviously be mostly technical, and no new decisions are expected during it.

Thursday - US jobless claims day, US GDP for Q1, Eurozone economic data, German, Spanish and Italian inflation indices, Swedish economic trends review.

On Friday, Germany will release preliminary GDP for Q1. In addition, data on unemployment in the Eurozone and Italy, GDP for the 1st quarter of the Eurozone, France, Italy, Mexico, Spain and Portugal, inflation index of the Eurozone will be available.


FAQ