Last night saw the release of the U.S. FOMC Minutes which were a lot less dovish than expected, as though many members saw a rate hike late this year due to the USD strength and fall in oil prices, many members expressed that U.S. data would warrant a hike in June. However the FOMC Minutes are based on a meeting held back on the 17th-18th April, and is fairly outdated with the NFP results last week being the lowest rise since December 2013. This highlighted the slowdown in the U.S economy and therefore views on a rate hike are likely to have changed since the last meeting. Yet EUR/USD and GBP/USD were able to make swift downward movements this morning with GBP/USD breaking below the 1.48 mark and EUR/USD moving below the 1.08 mark. Since post NFP on Friday, both GBP/USD and EUR/USD reached highs of 1.5 and 1.1 respectively, the less dovish tone from the FOMC has allowed the USD to pare back some of its losses. Post NFP saw many analysts push expectations of U.S rates at 0.5 bps in March 2016, this may have been slightly over-evaluated and an initial rate hike is more likely between July and September of this year.
Today sees the release of BOE interest rate decisions and Monetary easing, as both are expected to be unchanged. Though there has been talk from more dovish members of the BOE to increase the use of Monetary Easing, it is very unlikely to change, as Carney outlined the next big move from the BOE will be a rate hike.
The afternoon will see the release of Jobless Claims data, with Initial Jobless Claims previously at 268k and Continuing Jobless Claims previously at 2.325m. Any positive employment data is likely to support USD strength; however Jobless Claims data is becoming more insignificant as focus turns more towards ADP figures and NFP. Therefore not much volatility is expected from this announcement today for Jobless Claims data.
Tomorrow will be important for the UK as NIESR GDP estimates will be released in the late afternoon, also for those trading the Canadian Currency; CAD Unemployment Rate is expected in the early afternoon.
Next week is expected to be more significant as the ECB press conference occurs on Wednesday, and issues related to Greek debt resolution and the assessment of the current QE program are likely to be addressed. As a deadline is set to be met at the next Eurogroup meeting on the 24th April, conflict is still being met between Greece and Germany, as Greece continue their argument to what they are owed back to post World War II. As talks began it seemed highly unlikely for a Greek exit, however many analysts are now seeing this as being more possible as the days continue to count down.
That’s the wrap for today, Good Luck with your trading endeavours.