5 Central Bank Events You Can Trade This Week

Start your trading week right by prepping for the major market happenings! This week, we’ve got TWO interest rate decisions and THREE central banks releasing monetary policy meeting minutes.

1. RBA monetary policy meeting minutes (Tues, 1:30 am GMT)

First among this week’s set of central bank events is the RBA’s release of its monetary policy meeting minutes. Recall that RBA Governor Stevens and his men chose to sit on their hands during the latest RBA interest rate decision.

What’s interesting to note about their June rate statement was that Governor Stevens eased off his downbeat remarks a bit, choosing to highlight the green shoots in the economy instead of focusing on the weak spots. In his press statement, Stevens noted that there were signs of improvement in the housing sector and that business investment is likely to pick up.

However, several economic reports from the Land Down Under have failed to impress. Check out Australia’s May economic data roundup and its dismal jobs data, for instance. With that, it probably wouldn’t be so surprising to see a few dovish remarks on the domestic economy in the meeting minutes, which might then lead to a bit of Aussie weakness.

2. BOJ monetary policy meeting minutes (Tues, 11:50 pm GMT)

In their latest interest rate statement, BOJ Governor Kuroda and his gang of policymakers made no move to increase stimulus, insisting that the Japanese economy will stay resilient amidst the recently implemented sales tax hike. Yen bulls took this as a sign to charge, as Japanese policymakers don’t seem willing to dole out another round of aggressive easing measures just yet.

A closer look at the latest reports from Japan does reflect resilience. Although some reports like consumer spending and industrial production came in the red, other economic data such as inflation figures showed promising results. Some even say that the recent dip in spending and production was just a knee-jerk reaction and that economic activity will resume its pickup sooner or later. This optimistic outlook might be reflected in the BOJ minutes due this week and provide another boost to the yen.

3. BOE MPC meeting minutes (Wed, 8:30 am GMT)

On Wednesday, it will be the BOE’s turn to show market watchers their assessment and outlook for the U.K. economy. Carney did provide a preview to this event late last week when he spoke of the BOE possibly hiking rates sooner than markets expect, as house prices gains continue to spur inflation.

Data from the U.K. has also been impressive so far, especially with their jobs data showing consecutive gains in hiring enough to bring the unemployment rate to its lowest level in five years. Do keep close tabs on any upward revisions to growth and inflation forecasts, which might stoke stronger rate hike expectations from the BOE and push the pound higher against its forex counterparts.

4. FOMC rate statement (Wed, 6:00 pm GMT)

The FOMC statement is already notorious for sparking fireworks across the charts, but what makes this particular event even more exciting is the fact that the Fed is also set to print its revised economic projections this time.

Their previous interest rate decision hasn’t caused much of a ruckus in price action as they simply decided to carry on with the taper and refrain from making any drastic changes to the accompanying statement. This week’s policy decision might not contain any surprises also, as market watchers would probably zoom in on the Fed forecasts instead.

Huge revisions to their growth forecasts might drive the Greenback in a clear upward direction as opposed to its recent mixed performance to its forex counterparts. On the other hand, significant downgrades might lead market watchers to doubt that the Fed is moving closer to hiking interest rates. Keep your eyes and ears peeled for any comments regarding U.S. yields as well.

5. SNB interest rate statement (Thurs, 7:30 am GMT)

Last but not least is an event that’s usually quiet but also has the potential to spark multi-hundred pip moves every now and then. Now the latter doesn’t happen very often but it wouldn’t hurt to be ready to grab that opportunity when it happens, right?

This particular interest rate decision could be one of those market movers, as SNB Chairman Jordan has previously hinted that they are ready to adjust monetary policy when the ECB does. After all, the SNB is very intent on defending the EUR/CHF peg at all costs and the recent ECB easing extravaganza might just prompt the Swiss central bank to up their game.

Traders have already priced in the possibility of SNB easing or currency intervention from the moment that ECB head Draghi suggested that rate cuts might happen. With EUR/CHF hovering dangerously close to the 1.2000 floor, the SNB might decide to jawbone or actually pull the trigger during their monetary policy statement. Stay on your toes and watch out for spikes among other franc pairs as well!

Which among these central bank events are you looking to trade this week? Share your trade plans in our comment box or cast your votes in our poll below!