The Forex market is in for another volatile week. This week, investors should focus on the interest rate decisions of the central banks of the United States, United Kingdom, Japan, Norway, and China. The US Federal Reserve is expected to cut interest rates this week by 0.25%, while other central banks are expected to hold rates at current levels. However, there could be surprises in Norway and China. Special attention should be paid to Jerome Powell’s remarks at Wednesday’s press conference after the interest rate announcement. There will also be many inflation reports this week, particularly in the Eurozone, Canada, the UK, and Japan.
Monday, September 16
Monday will be the quietest day of the week, with no major economic events. It’s a bank holiday in Japan and China.
Main events of the day:
- Switzerland Producer Price Index (m/m) at 09:30 (GMT+3);
- Eurozone Trade Balance (m/m) at 12:00 (GMT+3).
Tuesday, September 17
On Tuesday, Canada will release CPI inflation data for August. Inflationary pressures are expected to continue to decline, which will confirm the Bank of Canada’s policy vector for further rate cuts. The US retail sales data will be studied to determine how the US consumer feels during a high interest rate period. This data may affect the probability of rates cut by the FOMC on Wednesday. It’s a bank holiday in China.
Main events of the day:
- Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3).
- US Retail Sales (m/m) at 15:30 (GMT+3);
- Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
- US Industrial Production (m/m) at 16:15 (GMT+3).
Wednesday, September 18
The main event on Wednesday will be the Fed Interest Rate Decision. Economists are almost certain that the Fed will cut the rate by 0.25%, but there is a 30% chance of a larger 0.5% rate cut. The investors will also focus on the FOMC forecasts and on the speeches of Fed Chairman Jerome Powell at the end of the meeting to get clues as to the Fed’s next steps. If the dot plot and Powell propose to cut rates this year by fewer basis points than the 115 currently expected by the market, the dollar index could be fuel to rise, putting pressure on risk assets. Also, on Wednesday, investors should pay attention to the UK inflation data. Inflation is expected to fall from 2.2% to 2.1% year-on-year, increasing the likelihood of a rate cut by the Bank of England in November.
Main events of the day:
- Japan Trade Balance (m/m) at 02:50 (GMT+3);
- UK Consumer Price Index (m/m) at 09:00 (GMT+3);
- UK Producer Price Index (m/m) at 09:00 (GMT+3);
- Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
- US Building Permits (m/m) at 15:30 (GMT+3);
- US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
- US Fed Interest Rate Decision at 21:00 (GMT+3);
- US FOMC Statement at 21:00 (GMT+3);
- US FOMC Economic Projections at 21:00 (GMT+3);
- US FOMC Press Conference at 21:30 (GMT+3).
Thursday, September 19
The Bank of England will make an Interest Rate Decision on Thursday, where no change is expected as services inflation remains at the same high level. At the last meeting, the Bank of England signaled that it would be cautious about future rate cuts. However, volatility in currency pairs with the British pound will increase sharply. Also, on this day, there will be a meeting by the Norwegian Central Bank. Analysts expect Norges Bank to keep the rate unchanged as well. There is a small probability that the Norwegians will start a cycle of rate cuts. Special attention should be paid to New Zealand GDP data. This data is published once a quarter. Weak growth of 0.1% is forecast, but if the data comes out worse than expected, it could hit NZD as it increases the likelihood of a rate cut from the RBNZ.
Main events of the day:
- New Zealand GDP (q/q) at 01:45 (GMT+3);
- Australia Unemployment Rate (m/m) at 04:30 (GMT+3);
- Norwegian Interest Rate Decision at 11:30 (GMT+3);
- UK BoE Interest Rate Decision at 14:00 (GMT+3);
- UK BoE MPC Meeting Minutes at 14:00 (GMT+3);
- US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
- US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
- US Existing Home Sales (m/m) at 17:00 (GMT+3);
- US Natural Gas Storage (w/w) at 17:30 (GMT+3).
Friday, September 20
On Friday, traders should be directed to the Bank of Japan’s monetary policy meeting. No changes are expected, but bank officials may give a clear message about the rate hike at the next meeting, which was repeated by Japanese officials last week. This could give fuel to the Yen to strengthen further. In China, the central bank will also hold a policy meeting. Economists do not expect any changes, but the Bank may spring a surprise with a rate cut, as it has done several times before. Also worth watching on Friday is retail sales data in the UK and Canada. This report is a good indication of consumers’ purchasing power. The better the indicator is, the better it is for the national currency, and vice versa.
Main events of the day:
- Japan National Core Consumer Price Index (m/m) at 02:30 (GMT+3);
- China PBoC Loan Prime Rate (m/m) at 04:15 (GMT+3);
- Japan BoJ Outlook Report at 07:00 (GMT+3);
- Japan BoJ Interest Rate Decision at 07:00 (GMT+3);
- UK Retail Sales (m/m) at 09:00 (GMT+3);
- Canada Retail Sales (m/m) at 15:30 (GMT+3);
- Eurozone ECB President Lagarde Speaks (m/m) at 18:00 (GMT+3);
- Switzerland Trade Balance (m/m) at 09:00 (GMT+3);
- German Producer Price Index (m/m) at 09:00 (GMT+3);
- Switzerland SNB Monetary Policy Statement at 10:30 (GMT+3);
- Switzerland SNB Interest Rate Decision at 10:30 (GMT+3);
- Switzerland SNB Press Conference at 11:00 (GMT+3);
- US Manufacturing PMI (m/m) at 16:45 (GMT+3);
- US Services PMI (m/m) at 16:45 (GMT+3).
- New Zealand Trade Balance (m/m) at 01:45 (GMT+3);
- Australia Manufacturing PMI (m/m) at 02:00 (GMT+3);
- Australia Services PMI (m/m) at 02:00 (GMT+3);
- Singapore Consumer Price Index (m/m) at 08:00 (GMT+3);
- Eurozone German Manufacturing PMI (m/m) at 10:30 (GMT+3);
- Eurozone German Services PMI (m/m) at 10:30 (GMT+3);
- Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
- Eurozone Services PMI (m/m) at 11:00 (GMT+3);
- UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
- UK Services PMI (m/m) at 11:30 (GMT+3).
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
