Weekly Outlook: Mar 14 - 18; Fed and BoE Policy Meeting Ahead!

The highlight of the week just past was the euro and the ECB policy meeting on Thursday. The 19-nation union central bank cut its deposit rate by 10 basis points to -0.4% and lowered the marginal lending rate to 0.25% from 0.30%. Moreover, surprised the market by shaving the overnight rate to zero from 0.05% before. At the press conference, the ECB President announced the expansion of the QE programme to 80 billion euros per month. Until then the bank was injecting to economy 60 billion euros per month. Draghi hinted that this could be the end of the easing cycle boosting the euro to weekly highs against its counterparts.

The [B]economic calendar for the coming week[/B] is pretty crowded with economic data, beginning today with two press conferences from Bank of Japan and Reserve Bank of New Zealand Governors. In Eurozone, the Industrial Production for January is anticipated to show that the sector recovered after a weak performance in December.

Later in the afternoon, the RBNZ Governor Graeme Wheeler will have a speech. During the night, the Reserve Bank of Australia will publish the minutes of the policy meeting they had two weeks before and hold the monetary policy unchanged. A while later, the Bank of Japan will have its interest rate decision accompanied by a Monetary Policy Statement and early on Tuesday’s European morning, the BoJ Governor Haruhiko Kuroda will give a speech.

Later on [B]Tuesday[/B], morning Eurozone’s employment change for the fourth quarter will be out. In U.S., the Retail Sales will be released and are expected to have declined by 0.1% mom in February from a rise of 0.2% before. The Produce Price Index for February, Business Inventory for January and NAHB Housing Market Index for March will be also eyed. In New Zealand, attention among the market participants will turn to Fonterra’s Global Dairy Auction.

On [B]Wednesday[/B], in UK, the employment report will be released. The ILO Unemployment Rate for the three months to January I expected to have remained stable at the record low of 5.1% and the average earnings including bonus to rise by 2.0% from 1.9% prior. In February, the market predicted that the unemployed people in UK decreased by 9.1K, less than the month before that decreased by 14.8K.

In US, before the Fed policy meeting, a slew of economic indicators will inundate the USD traders. In the housing sector, the Building Permits and the Housing Starts in January will be out. The Inflation Rate will be the closely eyed as it surprised positively in January by picking up closer to Fed’s 2% target in the last 15-months. The inflation rate yoy currently stands at 1.4% and is expected to slow down at 0.9%. February’s industrial production and capacity utilization will be out as well.

At 18:00 GMT time, Fed will announce its interest rate decision accompanied with the FOMC Economic Projections. A half an hour later, Fed Chair Janet Yellen will give a press conference.

Later in the second half of the trading session, the New Zealand’s GDP for the fourth quarter will be out. Overnight, Australia’s employment data for February will be released. The jobless rate is anticipated to remain unchanged at 6% and the number of employed people to increase by 10.0K versus a decrease of 7.9K in January.

Going to [B]Thursday[/B], Eurozone’s Inflation Rate and the BoE policy meeting will attract the attention. Eurozone’s consumer prices are expected to have decreased by 0.2% yoy as the preliminary figures. The 19-nation union’s Trade Balance and Construction Output, both for January will be published.

At 12:00 GMT time, the BoE policymakers are going to vote for the central bank’s Interest Rates. Even though no changed are expected, the voting pattern and the meeting minutes will be closely watched.

In U.S., the weekly jobless claims will be out, as usual, followed from the JOLTS Job Openings for January and the CB Leading Indicator for February. During the night, Bank of Japan’s Monetary Policy Meeting Minutes will be published.

Finally, on [B]Friday[/B], the most important macro-updates are January’s Retail Sales and February’s Inflation Rate for Canada and March’s preliminary Michigan Consumer Sentiment Index in U.S.