Trump Comments vs Fed Decisions

Daily Update - 01st Feb 2017

Yesterday’s Market

• GBP GFK Consumer Confidence
• JPY BOJ Interest Rate Decision
• EUR Consumer Price Index
• EUR Gross Domestic Product Q4

Yesterday’s Focus

Early morning yesterday, BoJ had their interest rate decision and Governor Kuroda decided that the interest will remain the same as the JPY is as it is already competitive in the market and feels there isn’t a necessity to increase at the time.

Later on, we were greeted with the Euro session which turned out to be positive as the Consumer Price Index had a staggering increase from the initial mark of 0.8% to 1.8% which is a 100% increase followed by the GDP Quarter 4 which was the event of the day for the Eurozone as it too had a positive increase which shows high value in the product & service produced in the Eurozone.

Later in the day It was also announced that the ECB QE that was implemented to boost inflation is showing significant results it is increasing inflation as it is expected and decreasing the unemployment rate. Due to these effects, the ECB might consider diminishing QE in order to maintain current inflation levels which could theoretically cause the EUR to appreciate in the months to come.

Today’s Market

• JPY Bank of Japan Governor Kuroda Speech
• EUR Non-Monetary Policy’s ECB meeting
• USD ISM Manufacturing, ISM Prices, Feds Monetary Policy Statement & Fed Interest Rate Decision

Today’s Focus

The day commences with the BoJ Governor Kuroda’s Speech where he will be touching on Japan’s monetary policies. ECB will be conducting the Non-Monetary Policy meeting where it will be decided whether it will be shifted to a six week cycle.

Rest of the day will be filled with US data such as ISM Manufacturing and ISM Prices which could cause volatility and determine a short-term trend depending on the end result as well as the FED’s interest rate decision that focuses on the interest rates on loans and advances to commercial banks.

The Federal Reserve will hold its first monetary policy meeting of the year, and while no change in rates is expected, the announcement statement could hold clues on the timing of the next rate hike. The U.S. dollar traded sharply lower ahead of Federal Reserve monetary policy announcement. Softer than expected data contributed to the weakness but more importantly investors are nervous about President Trump's push for a lower currency.