SNB and BoE to Direct the Market Through the Day

Daily Update - 21st June 2018

Yesterday’s Focus

• JPY BoJ Monetary Policy Meeting Minutes
• USD Fed's Powell Speech
• EUR ECB President Draghi's Speech
• AUD RBA's Governor Philip Lowe Speech

Yesterday’s Explained

On Wednesday, BoJ released minutes of the April 26-27 meeting today. The only surprise out of that meeting was that BoJ dropped the time frame it set for achieving the 2% inflation target. The minutes provided more details on the discussions. Many members believed that the timing of reaching the 2% inflation was “merely a projection”. At the same time, “some market participants perceived this projection as a deadline for achieving 2 percent inflation, linking changes in said timing to policy adjustments, and this view was deeply entrenched among them.”

In prepared remarks before a central banking conference in Sintra, Portugal, Powell offered nothing new about U.S. monetary policy. He reiterated that the U.S. jobs market does not appear overly tight and the Federal Reserve should continue with a gradual pace of interest rate rises amid a strong economy to balance its employment and inflation goals.

Powell also cautioned central banks against trying to run an excessively hot labor market for too long in case it undermines their credibility on low and stable inflation.

After four Central banks head’s speech, we could not notice some big movement in the FX market, it was final day of ECB forum in Portugal yesterday, during his speech Draghi said to have patience to central banks since he has already started trimming QE, looking at his comment we can say there will not be much buying of Government bonds or assets, so EUR is still under pressure, and trading at 1.1560 against USD.

Today’s Focus

• NZD Gross Domestic Product
• CHF SNB Interest Rate Decision, SNB press conference
• GBP BoE Asset Purchase Facility, BoE Interest Rate Decision, Monetary Policy Summary, MPC Vote Cut, MPC Vote Unchanged, MPC Vote Hike, BoE Minutes
• USD Jobless Claims, Housing Price Index

Today’s Market

Looks like the day is for UK and Switzerland, though New Zealand will be releasing its GDP report for first quarter, still the focus of the day could some major market moving from some Swiss and British data, after NZD GDP report, Swiss national bank will be releasing its interest decision report along with Press conference, later during afternoon UK will be releasing its number of reports, since last week we have noticed the big declining in GBP/USD, got affected by some political issues in UK, or its base currency US dollar got boost. After UK reports US will be releasing its continuing Jobless claims and initial jobless claims along with its housing price index as finisher of the Day.