Rates of interest could also be the secret this week as main central banks launch their selections whereas others print extra deets on their earlier bulletins.
ICYMI, I’ve written a fast recap of the market themes that pushed forex pairs round final week. Test it!
Which calendar occasions shall be below the highlight and what are markets anticipating? Right here’s an inventory:
Main Financial Occasions:
RBA coverage assertion (Apr 5, 4:30 am GMT) – As anticipated, the Reserve Financial institution of Australia (RBA) saved its money price unchanged at a report low of 0.1% for the fifteenth month in a row in March.
RBA named Ukraine as a brand new supply of uncertainty, together with vitality and provide considerations. It additionally stated that it gained’t elevate its charges till “precise” inflation stays inside its 2% – 3% vary.
AUD dropped throughout the board and made new intraday lows in opposition to its counterparts earlier than larger commodity costs pushed it larger by the tip of the Asian session.
This week, markets count on RBA preserve its rates of interest but additionally flip a bit extra hawkish because it considers inflation considerations and Australia’s strengthening economic system.
FOMC assembly minutes (Apr 6, 6:00 pm GMT) – Two weeks in the past, Fed members raised their rates of interest for the primary time in three years. Extra importantly, they signaled that there shall be extra to return AND that they might begin decreasing their steadiness sheets as quickly as Could.
Since then, some members have hinted at a 50-basis level hike in Could whereas others are solidifying the steadiness sheet schedule. We’ll know extra from the March assembly minutes scheduled this week.
ECB financial coverage assembly accounts (Apr 7, 11:30 am GMT) – The European Central Financial institution (ECB) turned surprisingly hawkish final month, not solely dropping its hints of taking its charges additional into damaging territory but additionally asserting that it may finish its Asset Buy Programme (APP) in Q3. Markets had solely priced within the Pandemic Emergency Buy Programme (PEPP) ending in March!
The assembly minutes may present particulars on simply how hawkish ECB members have turned, and provides clues on the central financial institution’s rate of interest hike schedule.
Canada’s labor market information (Apr 8, 12:30 pm GMT) – Easing lockdown restrictions helped drag Canada’s unemployment price from 6.5% to five.5% in February. Particulars additionally confirmed a web of 336K employees discovering jobs for the month.
The upside surprises helped enhance CAD in opposition to its counterparts earlier than profit-taking partially erased its good points close to the tip of the buying and selling session.
This week, markets see the jobless price remaining at 5.5%, a web of 140K jobs created, and a slight enchancment in participation price. Higher-than-expected numbers would help Financial institution of Canada (BOC)’s plans to lift its charges additional within the subsequent couple of months.
Foreign exchange Setup of the Week: EUR/USD
Euro merchants are in for some motion as we learn the way a lot hawkish ECB members have turned throughout their March assembly.
Before you purchase EUR prefer it’s the most recent airfryer, although, you need to be aware that any EUR energy in opposition to USD will play in opposition to EUR/USD’s downtrend on the every day.
Lack of decision in Ukraine would additionally restrict the euro’s good points this week. After which there’s the Fed’s assembly minutes, which ought to spotlight the central financial institution’s aggressive tightening schedule and possibly push USD larger throughout the board.
The pair has room to climb because it flirts with the underside of a month-long uptrend however its good points may shortly discover resistance from a development line and 100 SMA ranges on the chart.
Shorter-term merchants can reap the benefits of March’s uptrend and search for purchase alternatives across the 1.1000 ascending channel help.
In the event you’d relatively commerce EUR/USD’s longer-term downtrend, then you’ll be able to look forward to EUR/USD to climb nearer to the every day chart’s resistance zones earlier than executing promote orders.