Interest Rate decisions by 2 central banks today. What to expect?
This article is originally referred from IronFX News.
ECB Interest Rate Decision
- ECB is to announce it’s interest rate decision today and is widely expected to remain on hold at 0.00%.
- Currently, EUR OIS imply a probability for ECB to remain on hold at 98.39%.
- Market focus is expected to shift to the accompanying statement and the following press conference.
- We see the case for the statement to sound a bit more cautious and a bit less upbeat as recent financial data were quite soft.
- Should there be a more dovish tone we could see the EUR weakening.
BoJ Interest Rate Decision
- Bank of Japan will announce its interest rate decision during the Asian morning on Friday and is widely expected to remain on hold at -0.10%.
- Currently JPY OIS imply a probability for BoJ to remain on hold at 91.62%. Softening inflation data, household spending and weak wage growth support such an idea.
- Market focus is expected to shift to the accompanying statement, however no surprises are expected.
- The key issue seems to be if the BoJ will continue to project the inflation rate hitting it’s target of +2.0% yoy in 2019 or not.
- Should there be a rather dovish tone we could see the JPY weakening.
Today’s other economic highlights
- Germany: GfK Consumer Sentiment for May, Survey: 10.8 Prior:10.9, 06:00 (GMT), neutral to bearish for EUR
- Sweden: Interest Rate Decision, Survey:-0.50% Prior:-0.50%, 07:30 (GMT), SEK OIS imply probability of 93.73% to remain on hold
- US: Durable Goods Orders for March, Survey: +1.6% mom Prior: +3.0% mom, ≈12:30 (GMT), USD could weaken
- Durable Goods Orders (Ex-Transport) for March, Survey: +0.5% mom Prior:+1.0% mom, ≈12:30 (GMT), USD could weaken
- Preliminary Goods Trade Balance for March, Survey: -74.8B Prior:-75.88B, 12:30 (GMT), Neutral for USD
- Initial Jobless Claims, Survey: -230K Prior:232K, 12:30 (GMT), Neutral for USD
- Speakers: Czech National Bank Board Meeting followed sometimes by Press Conference
Original Source: IronFX News