Big week for central banks

July 29, 2019

A stack of data is scheduled for publication this week, while various central bank will be holding interest rate meetings.

The EURUSD remained largely flat on Friday, weakening slightly to round out the week. The pair began Friday at $1.11459 and ticked up to a high of $1.11503 early in the day. The euro came off those highs, declining over most of the session until it hit lows of $1.11109 late in the day. It bounced off those lows and is currently trading at $1.11309. The GBPUSD continues to struggle under the weight of new leadership and Brexit, with the new PM raising the prospect of a no-deal Brexit when the deadline passes at the end of October. The pair started the day at $1.24502 and bumped up to a high of $1.24594 early in the day. The pound then began its slide, which it endured for most of the day, hitting a low of $1.23751 late in the day. It is not far off those lows, currently trading at $1.23800.

The Dow made some modest gains on Friday, regaining its footing after the sell-off it went through in the previous session. The index opened Friday at 27,120.84 and dipped to a low of 27,110.99 in the opening hour of trade. From there, the Dow began its slow march up, peaking at 27,229.78 very late in the day. It is not far off those lows, now trading at 27,188.53. The Dax made some small gains on Friday after opening the day at 12,399.37. The German index dipped to a low of 12,349.96 early in the day before picking up, climbing to a high of 12,445.53 and then closing at 12,427.83.

The week ahead is shaping up to be another busy one, with central banks coming into focus. While Japan’s and the UK’s central banks meet at various stages throughout the week, all eyes will be on the US Fed Reserve, which meets in the early hours of Thursday morning. A rate cut is expected, although the economic data remains strong. Fed Chair Jerome Powell has flagged a cut due to slow global growth and trade tensions with China, but key economic indicators within the US remain solid. Markets will wait and see what this meeting holds but it is expected to be good news for US, who always enjoy cheap money.

Data published today and the most important this week includes:

Today – Spanish Flash CPI, UK M4 Money Supply, Mortgage Approvals and Net Lending to Individuals

Tuesday – BoJ Policy Rate, Outlook Report, Monetary Policy Statement and Press Conference

Wednesday – US CB Consumer Confidence and ADP Non-Farm Employment Change, China Manufacturing PMI, Canadian GDP, Australian CPI and Trimmed Mean CPI

Thursday – US Federal Funds Rate, FOMC Statement and Press Conference, UK Official Bank Rate, Monetary Policy Summary, Asset Purchase Facility and BoE Inflation Report, BoE Governor Mark Carney speaks

Friday – US Non-Farm Employment Change, Average Hourly Earnings, Unemployment Rate and ISM Manufacturing PMI, Canadian Trade Balance, Australian Retail Sales


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