Busy week ahead BOE, BOJ and Fed Meeting

Weekly Report - 17/12/2018

Waiting on the FED


Lately, Traders are concerned with the U.S. economy and if the FED is going to follow its past rate hike after December. On September, the Fed appeared too confident regarding the economy for the next year. At this conference, they may slow down and have a more cautious sentiment about their estimation of the expected economic growth. The Bank of England at Thursday’s meeting is expected to hold interest rates fixed. Policymakers are continuing to support the hold policy about increasing rates at this meeting due to fears over Brexit, but also the recent mixed economic data.

Investors are not anticipating anything new from the Bank of Japan as well. We may search for clues that gives us the confidence that the rates will remain unchanged at -0.1%. Japan is also scheduled to publish its newest inflation data.

The Week that was

British Prime Minister Theresa May last week won the leadership vote. She went last week to the EU to find supporters for her Brexit agreement from European lawmakers as well as find solutions to the Irish backstop matter. The backstop, in reality, defines that Northern Ireland will continue to be in a European-wide rules union till a full trade deal is achieved. The Prime minister is still under pressure from pro-Brexit supporters concerned about the backstop.


Main Focus This Week

First, Dollar Spot Index closed the week up about 0.9% to $97.430. The following week will be important as it includes essential economic drivers like Monday and Thursday manufacturing PMI numbers plus November housing sector on Tuesday and Wednesday. An especially full day will be Friday that marks the Finalized 3rd quarter, the FED’s preferred November Core PCE Price Index figures, GDP numbers, November durable goods, and November personal spending. While the numbers will impact the markets, many investors are waiting on the FED and its rate plan for 2019 to come out.


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