It’s going to be a short but busy week for trading, particularly in currency markets. Central banks take centre stage with the Bank of Canada, Reserve Bank of Australia and European Central Bank all meeting this week.
Each of these central banks finds themselves stuck between a rock and a hard place between deciding when to tighten monetary policy
but at the same time having to deal with currency rallies. AUDUSD and CADUSD have been trading near 80 cents while EURUSD has spiked up toward $1.2000.
While it’s unlikely any of these central banks will take action this week, their statements and related comments form officials could spark currency moves. The RBA may take the opportunity to try and talk AUD down as the RBNZ has been doing to NZD lately. The Bank of Canada may signal another rate hike on the way later this year, especially in the wake of a spectacular Canadian employment report.
The ECB indicated on Friday the 1st that a decision on what to do about resuming QE tapering may not come until December (the street had been expecting October after the German election). Traders may look to their statement and Draghi comments for clarification.
There are also a number of US Fed officials speaking this week ahead of the pre-meeting blackout that starts on Tuesday the 12th. Traders may look to see if Hurricane Harvey has had any impact on Fed thinking.
Later in the week, China trade and Canada employment numbers may also attract attention from traders.
Energy markets could be active through the week as focus turns to the recovery from Hurricane Harvey, particularly around announcements related to the reopening of refineries, pipelines and ports. Depending in the path it takes as it crosses the Atlantic, Hurricane Irma may also
Economic/Political news (North America time):
Sunday evening Australia inflation
Monday Labour Day holiday in the US and Canada
Monday evening Service PMI for China, Japan, Australia, etc
RBA meeting (1.50% no change expected)
Tuesday US factory orders
FOMC Brainard, Kashkari, Kaplan speaking
Service PMI for UK, Germany, etc.
Eurozone GDP, retail sales
Tuesday evening Australia GDP
Wednesday Bank of Canada meeting (0.75% no change expected)
US and Canada trade balance
US non-manufacturing PMI
Wednesday evening US API oil inventories
Australia retail sales
Thursday Canada Ivey PMI
US energy inventories
ECB meeting (no changes expected)
FOMC Dudley, Mester speaking
Thursday evening China trade balance
Friday Canada employment
UK trade balance, industrial production
FOMC Harker speaking
Friday evening China inflation
TBA Developments related to Hurricane Harvey recovery
Ongoing NAFTA and Brexit talks
Through the week German election debates
Tuesday Hewlett Packard
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