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FX Fundamentals: 5 Central Bank Decisions to Be Released

FX Fundamentals: 5 Central Bank Decisions to Be Released

13-12-2021 09:53

ZFX  - It's looking very busy in the economic calendar for today. Just for this week, we will be having FIVE decisions made by central banks and a few top-level reports.

So what can analysts expect from this catalyst?

Major Economic Events:

China's Data Dump (15 December, 9:00 AM GMT+7) – China will be releasing number of major economic reports in the middle of the week and all of them might have big impacts on risk sentiments.

Retail sales in the month of November is expected to grind to a crawl from 4.9% to 4.8% year-on-year while it is likely that industrial production is to rise from 3.5% to 3.8%. Expect a fall from 6.1% to 5.4% in fixed assets investments.

US Retail Sales (15 December, 8:30 PM GMT+7) – With the top figure showing signs of falling from 1.7% to 0.8%, a slower consumer spending pattern is expected for November. More likely, it went from 1.7% to 0.9% in the report's core version.

FOMC Statement, Projections and  Press (15 December, 2:00 PM GMT+7) – The US central bank is widely expected to keep interest rates at < 0.25% but may print an update on their economic outlook.

Dollar traders want to know whether the Fed will return to a cautious stance due to the Omicron variant or continue with their tapering move. Note that price pressures remain very high, so policymakers might consider speeding up their timeline for withdrawing stimulus. Any major changes in the Fed's growth and inflation forecasts could provide some clues about their tightening plans, along with an adjustment to the dot plot of interest rate forecasts.

New Zealand Quarterly GDP (15 December, 4:45 AM GMT+7) – After an impressive 2.8% growth figure in Q2, New Zealand may report a sharp 4.5% contraction for the previous quarter.

A bigger cut in growth could crush hopes to see another rate hike from the RBNZ in the near term, which may be bearish for the Kiwi.

Australian Jobs Report (16 December, 7:30 PM GMT+7) - The Land Down Under could be looking at a sturdy rebound of 200K in the hiring market for November. This will follow a previous loss of 46.3K loss in jobs.

This should be enough to bring the unemployment rate down from 5.2% to 5.0%, but a weaker-than-expected figure could mean more declines for the Aussie.

SNB's Monetary Policy Decision (16 December, 3:30 PM GMT+7) – No actual rate change is expected from the Swiss central bank, so traders will likely remain wary of any surprise remarks.

BOE Monetary Policy Statement (16 December, 7:00 PM GMT+7) – Expectancies of the Bank of England to reserve increasing interest rates are still in effect.

No changes to asset purchases are expected either, with policymakers likely to take a step back due to the emergence of Omicron and possible lockdowns.

Also keep in mind that hawkish members like Saunders have been reducing their upbeat comments recently, so a more somber BOE statement is likely.

ECB Monetary Policy Statement (16 December, 8:30 PM GMT+7) – No actual changes to interest rates or bond purchases are expected from the ECB this time around. Policymakers have emphasized how inflationary pressures are only temporary, especially with supply chain disruptions still at play. However, market watchers are likely to stay tuned for clues on what the central bank will do after PEPP ends in March.

BOJ Monetary Policy Decision (17 December) – Japan's central bank will also keep its interest rates and QE program unchanged. Many expected this announcement to be a non-event as the Japanese economy is still struggling to recover from the pandemic.

Some expect the BOJ to extend their emergency facilities, perhaps at a reduced rate, given how the BOJ has lowered its economic forecast in their October meeting.

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Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.

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