- BOE’S Monetary Policy Committee’s meeting minutes is released. 0-9 vote for no changes to monetary policy
- Credit Suisse ZEW Survey for Switzerland weaker-than-expected: 4.8 vs. 7.4 previous
The big story of the morning London session was the Bank of England’s MPC monetary policy meeting minutes. As expected, it was a unanimous vote to keep policy as-is, but they re-iterated the hints Carney gave last week of a potential earlier-than-expected rate hikes. Of course, they did express concern on the timing and rate of rate hikes, which may be the cause of the quick fade of the initial spike higher, bringing Sterling down against the majors on the session:
GBP/USD is down 21 pips (-0.13%) to 1.6941 after bouncing off of 1.7000, GBP/CHF is down (-0.21%) to 1.5216, and EUR/GBP is up 23 pips (+0.30%) to get back above .8000
For the rest of the London session, forex market volatility looks to be pretty light, which is understandable given the economic lineup for the upcoming afternoon U.S. session.
At 1:30 pm GMT, we’ll get U.S. current account data (-$97B forecast vs. -$81.1B previous) and Canadian wholesale sales data (0.5% forecast vs. -0.4% previous). Both are not normally big market movers, and the volatility would most likely remain tight ahead of the major event of the day: the FOMC monetary policy statement.
At 7:00 pm GMT, we’ll get the latest decision on monetary policy from the U.S. Federal Reserve, as well as their outlook on the economy. This could be a big market mover as analysts are speculating that we’ll get a signal of an earlier than expected rate hike given the recent strength in the U.S. economy. If rates do move higher, this may hurt risk-on trades and as well as favor the Greenback.
And not too long after the U.S. close, we’ll get another market mover in the form of the quarterly New Zealand GDP report. The expectation is for a 1.1% rise vs. the 0.9% previous read. Check out our forex trading guide for this event and look out for big volatility in the Kiwi around that time…stay frost forex traders!
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