mask Week Ahead | Markets on Edge with Volatility Stoked by the Trade War, Rate Decisions and Election

05/ 11/ 2018

Week Ahead | Markets on Edge with Volatility Stoked by the Trade War, Rate Decisions and Election

5th November 2018 - 9th November 2018

Monday

  • JPY Bank of Japan Monetary Policy Meeting Minutes
  • JPY Bank of Japan Governor Kuroda Speech
  • USD Markit Services PMI

The Bank of Japan publishes a study of economic movements in Japan after the actual meeting. These meetings are held to review economic developments inside and outside of Japan and indicate a sign of new fiscal policy. Any changes in this report tend to affect the JPY volatility.

The Services Purchasing Managers Index (PMI) released by Markit Economics captures business conditions in the services sector. As the services sector dominates a large part of total GDP, the services PMI is an important indicator of the overall economic condition in US.

 

Tuesday

  • AUD RBA Interest Rate Decision
  • EUR Markit Services PMI

RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive

The Services PMI released by the Markit Economics interviews German executives on the status of sales, employment, and their outlook. Because the performance of the German service sector is extremely consistent over time, services does not impact final GDP figures as much as the more volatile figure on the manufacturing sector. 

 

Wednesday 

  • EUR Non-Monetary Policy’s ECB Meeting

The European Central Bank (ECB) announced on july that the Governing Council meetings dedicated to monetary policy will change to a new six-week cycle, from January 2015. Non-monetary policy meetings will continue to be held at least once a month.

 

Thursday

  • USD Fed’s Monetary Policy Statement
  • USD Fed Interest Rate Decision

Following the Fed's rate decision, the FOMC releases its statement regarding monetary policy. The statement may influence the volatility of USD and determine a short-term positive or negative trend. A hawkish view is considered as positive, or bullish for the USD, whereas a dovish view is considered as negative, or bearish.

With a pre-set regularity, a nation's Central Bank has an economic policy meeting, in which board members took different measures, the most relevant one, being the interest rate that it will charge on loans and advances to commercial banks. In the US, the Board of Governors of the Federal Reserve meets at intervals of five to eight weeks, in which they announce their latest decisions. A rate hike tends to boost the local currency, as it is understood as a sign of a healthy inflation.

 

Friday

  • GBP Gross Domestic Product
  • USD Producer Price Index

The Gross Domestic Product released by the National Statistics is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity. 

The Producer Price Index ex Food & energy released by the Bureau of Labor statistics, Department of Labor measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Those volatile products such as food and energy are excluded in order to capture an accurate calculation.