17 Jun 2015
Key events for the day ahead - Westpac
FXStreet (Guatemala) - Sean Callow, analyst at Westpac Banking Corporation noted the key events for the day ahead.
Key Quotes:
"In Asia we have Singapore May non-oil domestic exports and Japan May trade balance, neither of which should impact FX notably."
"The UK May unemployment is expected to remain at 5.5%, the lowest since 2008. We will also see the Bank of England MPC minutes. Rates at the June meeting were unchanged yet again. At the May meeting, all agreed to keep policy unchanged, though for two members the decision was “finely balanced” between maintaining and raising the Bank Rate. UK May CPI was subdued as expected, though the BoE sees factors weighing on inflation as temporary. No revisions are expected to Eurozone final May CPI, which should print at 0.3%y/y."
"We expect the FOMC to reinforce our expectation of a Sep funds rate hike (from 0-0.25% to 0.25-0.5%), though of course Chair Yellen should stress ongoing data dependence. The release of quarterly forecasts by FOMC members plus the Yellen press conference 30 minutes later means markets will have plenty to absorb, with volatile trade likely. Given the dismal Q1 GDP report, forecasts for 2015 should be cut notably, with 2016 expectations probably lowered too."
"Inflation forecasts could also be nudged a little lower. However, the general tone of the statement and Yellen’s press conference should be positive, with evidence on jobs, retail sales and housing pointing to a rebound in growth in Q2, setting up for solid expansion in H2. The “dot plot” of expectations for the funds rate by end-2015 should consolidate around 50bp of tightening this year, more than priced in. Combined with the press conference, this should see USD emerge firmer from the meeting."
Key Quotes:
"In Asia we have Singapore May non-oil domestic exports and Japan May trade balance, neither of which should impact FX notably."
"The UK May unemployment is expected to remain at 5.5%, the lowest since 2008. We will also see the Bank of England MPC minutes. Rates at the June meeting were unchanged yet again. At the May meeting, all agreed to keep policy unchanged, though for two members the decision was “finely balanced” between maintaining and raising the Bank Rate. UK May CPI was subdued as expected, though the BoE sees factors weighing on inflation as temporary. No revisions are expected to Eurozone final May CPI, which should print at 0.3%y/y."
"We expect the FOMC to reinforce our expectation of a Sep funds rate hike (from 0-0.25% to 0.25-0.5%), though of course Chair Yellen should stress ongoing data dependence. The release of quarterly forecasts by FOMC members plus the Yellen press conference 30 minutes later means markets will have plenty to absorb, with volatile trade likely. Given the dismal Q1 GDP report, forecasts for 2015 should be cut notably, with 2016 expectations probably lowered too."
"Inflation forecasts could also be nudged a little lower. However, the general tone of the statement and Yellen’s press conference should be positive, with evidence on jobs, retail sales and housing pointing to a rebound in growth in Q2, setting up for solid expansion in H2. The “dot plot” of expectations for the funds rate by end-2015 should consolidate around 50bp of tightening this year, more than priced in. Combined with the press conference, this should see USD emerge firmer from the meeting."