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Reading the latest FOMC statement from the last week, one would wonder why there was a strong reaction in the currency market. However, the surprise came from the Federal Open Market Committee economic projections release from the June 15-16 FOMC meeting. In the latest FOMC economic projections, 13 members of the FOMC see interest rates increase in 2023, and seven members see interest rates hike in 2022. It is clear that many members of the FOMC are watching the spike in the US inflations and are reacting to it. Furthermore, during the FOMC press conference, we learned from the FED chairman Powell that a discussion for the potential taper of the 120$ billion monthly FED bond purchasing has begun.
As a result of these changes from the FOMC, we witnessed a strong reaction in the USD and a modest reaction in the stock markets.
The Central Banks are cautious because they don’t know what challenges the world economy will face with the COV19 pandemic in the coming winter.
Next week the markets are waiting for the latest statement from the Bank of Englan and the bank interest rate decision. Although no changes are expected the BoE statement may cause volatility in the GBP pairs.
The focus for the week ahead is on the following economic data releases:
Monday, June 21, 2021
- UK – Rightmove HPI m/m
- Australia Retail Sales m/m
- Germany – German Buba Monthly Report
- Euro Area – ECB President Lagarde Speaks
- US – FOMC Member Williams Speaks
Tuesday, June 22, 2021
- New Zealand – Westpac Consumer Sentiment
- New Zealand – Credit Card Spending y/y
- Australia – CB Leading Index m/m
- Japan – BOJ Core CPI y/y
- UK – Public Sector Net Borrowing
- UK – CBI Industrial Order Expectations
- Euro Area – Consumer Confidence
- US – Existing Home Sales
- US – Richmond Manufacturing Index
- US – FOMC Member Daly Speaks
- US – Fed Chair Powell Testifies
Wednesday, June 23, 2021
- Australia – Flash Manufacturing PMI
- Australia – Flash Services PMI
- Australia – Goods Trade Balance
- Australia – RBA Assist Gov Ellis Speaks
- Japan – Monetary Policy Meeting Minutes
- Japan – Flash Manufacturing PMI
- France – French Flash Manufacturing PMI
- France – French Flash Services PMI
- Germany – German Flash Manufacturing PMI
- Germany – German Flash Services PMI
- Euro Area – Flash Manufacturing PMI
- Euro Area – Flash Services PMI
- Euro Area – ECB President Lagarde Speaks
- Switzerland – SNB Quarterly Bulletin
- UK – Flash Manufacturing PMI
- UK – Flash Services PMI
- Canada – Core Retail Sales m/m
- Canada – Retail Sales m/m
- US -Current Account
- US – FOMC Member Bowman Speaks
- US – Flash Manufacturing PMI
- US – Flash Services PMI
- US – New Home Sales
- US – Crude Oil Inventories
- US – FOMC Member Bostic Speaks
Thursday, June 24, 2021
- Germany – ifo Business Climate
- Euro Area – ECB Economic Bulletin
- UK – Asset Purchase Facility
- UK – MPC Asset Purchase Facility Votes
- UK – Monetary Policy Summary
- UK – MPC Official Bank Rate Votes
- UK – Official Bank Rate
- US – Final GDP q/q
- US – Unemployment Claims
- US – Core Durable Goods Orders m/m
- US – Durable Goods Orders m/m
- US – Final GDP Price Index q/q
- US – Goods Trade Balance
- US – Prelim Wholesale Inventories m/m
- US – FOMC Member Bostic Speaks
- US – Natural Gas Storage
- US – FOMC Member Williams Speaks
- US – Bank Stress Test Results
Friday, June 25, 2021
- New Zealand – Trade Balance
- Japan – Tokyo Core CPI y/y
- UK – GfK Consumer Confidence
- UK – CBI Realized Sales
- UK – BOE Quarterly Bulletin
- German – German GfK Consumer Climate
- Euro Area – M3 Money Supply y/y
- Euro Area – Private Loans y/y
- US – Core PCE Price Index m/m
- US – Personal Income m/m
- US – Personal Spending m/m
- US – Revised UoM Consumer Sentiment
- US – Revised UoM Inflation Expectations
- China – CB Leading Index m/m
