IronFX, Volatility Alert: Interest Rate Decisions by ECB, BoJ and FOMC
Central Banks’ Interest Rate decisions are mixing the markets recently.
This article is originally referred from IronFX News.
ECB Interest Rate Decision
- ECB is to announce its interest rate decision today at 11.45 (GMT) and is widely expected (97.28% by EUR OIS) to remain on hold at 0.00%.
- Market focus could shift to the accompanying statement which may have a more hawkish tone, as the inflation rate has accelerated.
- It could also be the case that the bank could announce or imply that it will gradually end or taper, its massive QE program.
- Should that be the case we could see the common currency strengthening as such a scenario may not have been totally priced in by the market.
BoJ Interest Rate Decision
- BoJ is to announce its interest rate decision tomorrow during the Asian session and is widely expected to remain on hold at -0.10%.
- Currently, JPY OIS imply a probability for the bank to remain on hold, of 95.75%.
- Should the bank remain on hold we could see the market turning its attention to the accompanying statement, which could have a neutral to dovish tone due to the recent lukewarm financial data.
- Should that be the case we could see the JPY weakening against its major counterparts.
FOMC hikes by 25 basis points
- The FOMC hiked its interest rate by 0.25% reaching +2.00%, as was expected.
- Also the dot plot changed implying 2 more hikes could be expected (probably September and December) in 2018.
- Overall there was a rather hawkish tone in the accompanying statement and most of the Fed’s anxieties were shrugged off.
- The USD strengthened upon the decision and we could see it getting some support in the near future, guided by the decision.
Today’s other economic highlights
- Germany: Final HICP for May, Survey: +2.2% yoy Prior: +2.2% yoy, 06:00 (GMT), could strengthen EUR
- France: Final CPI (EU Norm.) for May, Survey: +2.3% yoy Prior: +2.3% yoy, 06:45 (GMT), could support EUR
- UK: Retail Sales for May, Survey: +0.5% mom Prior: +1.6% mom, 08:30 (GMT), could weaken GBP
- US: Core Retail Sales for May, Survey: +0.5% mom Prior: +0.3% mom, 12:30 (GMT), could strengthen USD
- US: Retail Sales for May, Survey: +0.4% mom Prior: +0.2% mom, 12:30 (GMT), could strengthen USD
IronFX Daily Report ‘June 14th’
Original Source: IronFX News
