14/ 05/ 2017

Week Ahead | Inflation data to dominate uneventful week

During the second week this month, the dollar gained ground against several currencies around the world in spite of the political controversy that cropped up last week.

Though Macron’s election as the next president of France was anticipated, it provided some amount of relief to the markets. In the UK, the BOE came out a bit dovish on inflation, wages and despite hopes for a smooth Brexit process.

The mix of events scheduled for the coming week include; jobs data from Australia, housing data from the US, Inflation data from Euro Zone and UK.

11/ 05/ 2017

Bank of England Super Thursday

Yesterday’s speech from ECB Mario Draghi is moderately optimistic on Eurozone growth, saying that the rebound is becoming increasingly solid and that “downside risks have further diminished”. Simultaneously, he stressed that it is “too early to declare success”, adding that the bank’s improved forecasts assume the full implementation of its stimulus measures.

Today’s reports coming out from UK, will give its latest view on the state of the UK economy and will be the key for markets in gauging the short-term direction for monetary policy and sterling as due to be released today will be coming from Bank of England on its interest rates; the minutes of the monetary policy committee’s meeting at which the decision was reached; and the quarterly inflation report.

10/ 05/ 2017

King Dollar Returns

The dollar is finally managing to show relative strength after weeks of indecisive price action. The US currency had been rising strongly in recent days against all the major currencies, except the likes of the euro, and pound. But at the start of this week, we have seen a sharp fall in the EUR/USD.

The dollar remains fundamentally supported as we have been banging on about it for months. Continued strength in US economic data has allowed the Federal Reserve to tighten its monetary policy. The market now fully expects another rate rise in June.

Today’s focus will be on ECB chief Mario Draghi speech to Dutch Parliament followed by New Zealand Interest Rate Decision & Monetary policy statement.

09/ 05/ 2017

Euro Rallies after Macron Wins French Presidency

Macron has won the second round of the French elections, in accordance with popular expectations, and this has hurt the EUR. The ensuing tensions and market risks have obscured the Fed policy. As a result, the markets have paid minimal attention to the Fed balance sheet normalization. We could see this from the drop in the US dollar against the EUR.

Later in the day, as there’s no other reports coming, Germany will release its Trade Balance, Imports and Exports data.