Considering we have Australia’s favourite public holiday this week, the FX markets will not be slowing down for us Aussies. Early Tuesday morning we will have two key speeches from Europe and the UK’s Central banks. Following that we will have Australia’s Consumer Price Index (CPI) Figures out on Wednesday. Thursday we have Interest Rate decisions out of both the USA and New Zealand. To end the week on Friday, we are expected CPI estimates from and the Advance GDP figure out of the USA.
Out Of Europe tomorrow European Central Bank (ECB) President Mario Draghi will continue his concerns on Monetary Policy in the Euro-zone. His last action regarding the two-tiered bank deposit system he tried to implement was swiftly shut down from the majority of large banks in Europe; this due to them not will to cooperate. It is widely speculated that Draghi’s next move will be announced or hinted tonight, during his speech.
Head of the Bank of England (BoE) Mark carney has did the deed last week when mentioning that any interest rates hikes are unlikely for this year, and most likely will be pushed back to 2017. This hike is hugely reliant on the Inflation levels in the UK. Given that they have averaged 0% over the last 3 months; it may be generous to think 2017 will be the year.
Australia’s CPI figures are Expected to remain below the Reserve Bank of Australia’s targets of 2-3%, this at 1.7% year on year. Therefore the figure will be closely watched as these figures will give indication to future monetary policy in Australia. If Australia produces sluggish figures below the minimum target of 2% we can expect cuts within the next 6 months, holding everything else constant.
Both Interest Rate decision from NZ and the USA are expected to remain the same, however we are expecting future policy speculation from both central banks. In the USA we are expecting US Fed Member Janet Yellen to give us an indication of the next hike; conversely, in New Zealand we are expecting Governor of the Reserve bank of New Zealand, Graham Wheeler to mention the likelihood of New Zealand’s next interest Rate hike.
Late week the USA will release their advance Gross Domestic Product figure which has recently been missing key expectations. The market is expecting a figure of 0.8% from a precious 2% figure; depending on the strength of this quarters figure, this will indicate how soon further Interest rate hikes are likely.