Monday, 23 October 2017

Three Events To Watch This Week

Posted by Valentine at 12:10 Labels:

Have you already finished that coffee? You better pour yourself another one because this week is just getting started and there are three VERY important events on schedule.

The economic agenda will become more interesting in the second part of the week, leaving the first one for reduced-impact data. Based on the events mentioned below, we suggest paying special attention to these currency pairs: EURUSD, GBPUSD, USDJPY.

Thursday - European Central Bank (ECB) Monetary Policy Meeting

The European Central Bank will unveil its latest monetary policy decision as of 11:45 GMT on Thursday, but no major changes are expected.

The European regulator is expected to decide whether it will leave unchanged the volume of bond purchases or start reducing its monetary policy stimulus.

Details on the monetary policy configuration are likely to come with President Mario Draghi’s press conference, set 45 minutes after the official announcement.

At this stage, asset purchases stand at 40 billion euro per month, including bond and corporate bonds. In January, the quantitative easing program used 60 billion euro per month.

Rumors point to a potential trimming to a range between 25 and 40 billion a month. However, Draghi has defended stimulus more than once in the past few weeks, rising doubts about the future of monetary policy in the region.

Thursday - Japanese Inflation Reports

Early elections in Japan went as planned and Prime Minister Shinzo Abe has secured two-third of the Parliament, a majority that will allow him to push forward “Abenomics” and a revision of the country’s pacifist constitution (useful when North Korean missiles are flying around).

Abe is a strong defendant of monetary stimulus and therefore, we expect no major changes from the Bank of Japan’s monetary configuration in the near future.

However, it is important to keep an eye on inflation, one the regulator’s main benchmarks. The Statistics Bureau will release October inflation report at 23:30 GMT on Thursday, with a forecasted increase of 0.8 percent year-on-year. BOJ’s inflation target remains at 2 percent.

Friday - Q3 US Gross Domestic Product

Third-quarter GDP figures will be available as of 12:30 GMT on Friday and hell everyone will be paying attention to them. Investors are interested about the impact of recent natural catastrophes on the economic growth rate.

According to the economic consensus, data is expected to show an annual growth rate of 2.6 percent from a prior 3.1 percent reading. Sectors such as industrial production, real estate and retail sales are likely to be the ones to blame for the slump.

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