The week of 18th – 22nd February whilst scant of big date announcements does contain minutes of 3 key Central Bank committee discussions on interest rates as well as testimony or speeches from 3 Central bank heads. Markets inevitably will be hopeful of advances in US/China trade discussions and progress in the UK/ EU Brexit deal.
Both the US and Canada are on holiday on Monday. Australia provides us with the first potential market moving event early on Tuesday morning when the Reserve Bank of Australia releases minutes of its Monetary Policy meeting of February. RBA Governor Lowe has already mentioned that the RBA‘s view is more evenly balanced as to whether they raise or perhaps even lower interest rates in the future. The minutes will give us more insight into the RBA’s thinking. The key data announcements form Australia this week are employment numbers early on Thursday morning- with 15,000 new jobs expected to have been created and the unemployment rate expected to remain at 5.0%- as well as Commonwealth Bank of Australia Manufacturing and Services PMI numbers. Last month these came in at 53.9 and 51 respectively. RBA Governor Lowe makes his semi-annual Parliamentary testimony late on Thursday night. Collectively, these events should give us clues to the potential direction of the Australian dollar which is currently trading at 0.7150 in the middle of a broader 0.7000-0.7300 range.
The Federal Open Market Committee minutes of the US are released on Wednesday evening. By and large we know the Fed’s view as this has been explained by Fed Chair Jerome Powell. From recent speeches by Powell it appears that the December correction in equity markets and pressure from Washington have tempered the Fed’s resolute stance on raising interest rates to one of a more “wait and see” policy in which GDP, Inflation, employment, the World economy and markets are all factors that affect the Fed’s thinking. Data about Durable goods expected at 0.2% M/M for December, the Philadelphia Fed Manufacturing Index for February expected at 15.6 and Existing Home Sales expected at 5.01 Million for January all released on Thursday make up the bulk of the important US announcements for this week.
Minutes from the European Central Bank are released on Thursday and on Friday ECB President Mario Draghi will make a speech in Bologna, Italy. This will follow Eurozone Consumer Price Index numbers for January which are expected to be negative for the month. Of the 3 events, Draghi’s speech will perhaps be the most interesting.
Of the other major currencies, Bank of Canada Governor Stephen Poloz speaks on Thursday and on Friday Canada releases Retail sales data for December which is expected to read negative 0.3% for the month.
For commodity traders, Gold and Oil are trading at highs for 2019, with perhaps Gold most likely to encounter resistance from here. (In early 2018 Gold struggled in a 1320 oz-1366 oz range before trading to August lows of 1160 oz.
Good luck and good trading! Ben Robson