We’ve got a busy week ahead of us, folks! Aside from the classic non-farm payrolls (NFP) Friday, we’ve got not one, not two, but FIVE central bank events to potentially rock our charts:
RBA’s first post-CPI decision
Tomorrow at 3:30 am GMT the Reserve Bank of Australia (RBA) will make its first interest rate decision since Australia’s Q3 2016 CPI was released. If you recall, the central bank had cut its rates twice so far this year, both of which happened directly after the Q1 and Q2 CPI reports were published.
Will the RBA cut its rates to a new low this week? Maybe not. For starters, the Q3 2016 CPI printed better-than-expected, with the weighted mean CPI still within the RBA’s estimates.
Not only that, but business conditions are also pointing to a rebound. But, as mentioned in our latest Australian economy snapshot, the RBA could also continue to wear its dovish feathers and point out Australia’s weak labor market.
BOJ: How’s “QQE + NIRP + YCC” going?
Not one to be left behind, the Bank of Japan (BOJ) will also publish its own monetary policy decision and conduct a presser sometime during tomorrow’s Asian session trading. Remember that Kuroda and his gang didn’t have a huddle in October but, in its September statement, they ditched their asset purchases schedule in favor of keeping 10-year Japanese government bond (JGB) yields low.
Market players aren’t expecting changes from the BOJ this week, but the pressure is still on especially after Japan’s latest inflation numbers failed to show any upward momentum. Watch out for any dovish rhetoric and/or attempts to jawbone the yen, folks!
BOC’s Poloz Speech
Completing tomorrow’s triple threat is Bank of Canada (BOC) Governor Stephen Poloz and his scheduled speech at 4:00 pm GMT. The text will be released 15 minutes ahead, and a presser is scheduled 75 minutes from when Poloz delivers his speech.
Don’t discount Poloz’s speech as a non-event! Just days ago the BOC head honcho caused pain for the Loonie when he hinted that he and his team have actively discussed adding more stimulus. Then, he clarified that “Our best plan right now, we think, is to wait for the next 18 months or so.”
Since the statement was taken to mean that the BOC won’t do anything for 18 months, he had to clarify his clarification in under an hour and say that the 18-month statement was “in reference to the time frame over which the output gap is expected to close… not intended as a reference to the Bank’s monetary policy.”
Don’t worry, if Poloz gives another mixed-signal party tomorrow, he’ll have a chance to clarify on Friday at 12:35 am GMT when he speaks at the Oshawa Walk of Fame event.
Fed: How about now?
What’s bigger than an NFP release? How about an actual Fed decision? For months Janet Yellen and her team have been on the edge of raising their interest rates for the first time since December. Heck, the September meeting was a “close call” with three votes in favor of hiking rates!
The pressure has only gained momentum this month after the annualized GDP clocked in a two-year high in Q3 2016 and manufacturing, trade, and housing indicators have shown improvements. However, the closely-watched labor market indicators remain mixed at best. This and the upcoming elections could convince FOMC members to save their plans for later.
Is the BOE ready to add more stimulus?
Rounding up this week’s central bank parade is the Bank of England (BOE) policy decision and quarterly inflation report scheduled on Thursday at 12:00pm GMT. For newbies out there, you should know that the inflation report also includes the BOE’s economic forecasts for the next two years.
For the past few days, we’ve seen better-than-expected GDP, consumer prices, and employment data from the U.K. However, consumer activity remains weak and the pound is still haunted by the prospect of a “hard Brexit” and refuses to see any upward momentum.
This week we’ll see if the BOE is as skeptical of the recent strong reports as market players are. Mark Carney has hinted at the need for more stimulus but admitted that there are limits to monetary policy.
Will they give nods to recent reports and admit that a Brexit vote is not as bad as they initially estimated? Or will they save their bullets for another month and wait for a bigger battle?