🔥 The key event this week that investors are highly anticipating will be the announcement of the Fed Funds rate on Wednesday.
The market is expecting another 0.75% 📈 hike, which will take the rate to 3.25%, the highest it’s been since 2008 📅 A higher rate signals a more contractionary stance taken by the central bank in a bid to fight inflation 🏦
Away from the 🇺🇸 Fed’s interest rate decision, inflation data are also due for 🇯🇵 Japan and 🇨🇦 Canada this week ☝🏼
👇 Let’s take a look at this week’s economic events in more detail
The Reserve Bank of Australia Policy Meeting Minutes – Tuesday, September, 20th
The Reserve Bank of Australia Policy Meeting Minutes will be held at 04:30 on Tuesday, September 20.
Asset(s) Affected: AUD and AUS200 🇦🇺
Why is this event important?
The Reserve Bank of Australia (RBA) Monetary Policy Meeting Minutes are a detailed record of the bank’s most recent policy-setting meeting, containing in-depth insights into the economic conditions that influenced the rate decision.
The Reserve Bank of Australia (RBA) publishes the minutes of its monetary policy meeting two weeks after the interest rate decision is announced. It provides a detailed record of the discussions held between the RBA’s board members on monetary policy and economic conditions that influenced their decision on adjusting interest rates and/or bond buys, significantly impacting the AUD and AUS200. The minutes also reveal considerations on international economic developments and the exchange rate value.
The Canada Consumer Price Index – Tuesday, September, 20th
On Tuesday, September 20, the Canada Consumer Price Index will be released at 15:30 GMT+3.
Asset(s) Affected: CAD and Canadian Stocks 🇨🇦
Why is this event important?
The Consumer Price Index is an important economic metric. It measures the average change in prices paid by consumers over a period of time for a basket of goods and services. The index is calculated and published monthly by the Bureau of Labor Statistics. It is among the most common measures of inflation, indicating the health and direction of the economy.
Excessive inflation poses a danger to economic growth and can also hit the prices of financial assets, stocks as well as bonds. Therefore, traders and investors need to keep a close eye on this indicator when there are Canadian stocks in the portfolio or trade CAD.
The FOMC Economic Projections – Wednesday, September, 21st
On Wednesday, September 21, the FOMC Economic Projections will be released at 21:00 GMT+3.
Asset(s) Affected: US Dollar and US Stocks 🇺🇸
Why is this event important?
This report includes the Federal Open Market Committee’s (FOMC) projection for inflation and economic growth over the next 2 years. An important part of the report is the breakdown of individual FOMC members’ interest rate forecasts.
Rising inflation can cause interest rates to go up in tandem. Higher interest rates are most likely accompanied by lower stock market returns, and this pretty much explains why the stock markets are currently falling. Also, remember the golden saying, “inflation is a silent killer”.
So, the FOMC Economic Projections will help you know the upcoming mood of the currency and stock market for some time to come.
The FOMC Fund Rate, Statement and Press Conference – Wednesday, September, 21st
The FOMC Fund Rate, Statement and Press Conference will be held on Wednesday, September 21 at 21:30 GMT+3.
Asset(s) Affected: US Dollar and US Stocks 🇺🇸
Why is this event important?
When the Federal Open Market Committee (FOMC) changes the interest rate, it impacts both the economy and the stock markets because borrowing becomes either more or less expensive for individuals and businesses.
Accordingly, the FOMC Fund Rate, Statement and Press Conference will allow you to estimate the interest rate for the next period and make predictions about the growth or decline of the U.S. dollar and the stock market.
The Japan BoJ Policy Statement and Press Conference – Thursday, September, 22nd
The BoJ policy statement and Press Conference are taking place on Thursday, September 22nd.
Asset(s) Affected: JPY and NIKKEI225 🇯🇵
Why is this event important?
Kuroda, BoJ’s governor, will give a press conference in order to communicate with investors regarding monetary policy. He talks about the factors that affected the most recent interest rate decision, the overall economic outlook, inflation, and clues regarding future monetary policy.
The BoE Votes, Policy Summary and Rate Announcement – Thursday, September, 22nd
The BoE Votes, Policy Summary and Rate Announcement will be held on Thursday, September 22 at 14:00 GMT+3.
Asset(s) Affected: GBP and FTSE100 🇬🇧
Why is this event important?
The BOE had previously suggested the rise in inflation would only be temporary, but it now accepts that this is no longer the case, and it may hit 13% in the coming months, which is why it has raised interest rates six times between December 2021 and August 2022. It will likely continue to do so in 2023.
The interest rate hike is a disincentive for the stock market (FTSE100) and a stimulant for the national currency due to rising inflation (GBP).
The EU, UK, and US Flash PMI (Manufacturing and Services) – Friday, September, 23rd
The EU, UK, and US Flash PMI (Manufacturing and Services) will be released on Friday, September 23.
Asset(s) Affected: 🇪🇺 EU – EUR and EU Stocks, 🇬🇧 UK – GBP and FTSE100, and 🇺🇸 US – USD and US Stocks.
Why is this event important?
The Purchasing Managers Index (PMI) is a measure of the prevailing direction of economic trends in manufacturing. The PMI is based on a monthly survey of supply chain managers across 19 industries, covering both upstream and downstream activity.
Flash PMI for Manufacturing and Services captures an overview of the condition of sales and employment. It is worth noting that nothing does not influence, either positively or negatively, the GDP as much as the Manufacturing and Services PMI does. Traders want the highest possible reading, as that will be taken as positive for the currencies.
That’s it for this week! 👋
