Economic calendar preview: Focus shifts to Fed, BOE, and BOJ rate decisions

Economic calendar preview: Focus shifts to Fed, BOE, and BOJ rate decisions
Written by:
Crispus Nyaga
14th September, 04:31
  • The Federal Reserve is expected to leave interest rate unchanged when it delivers its decision on Thursday.
  • The BOJ and BOE are also expected to leave rates unchanged in their monetary policy meetings.
  • Other important data will be UK employment numbers and New Zealand GDP data.

The US dollar ended last week in the green as traders focused on the strong economic data from the United States. The extremely weak British pound also contributed to the dollar strength. During the week, the sterling fell as investors started fearing about the likelihood of a no-deal Brexit. The euro (EUR/USD) remained relatively strong following the relatively hawkish ECB meeting. Here are the key events in the economic calendar to watch out for this week.

Central bank decisions

The Federal Reserve will start its two-day meeting on Tuesday and deliver its rate decision on Thursday. Analysts expect that the bank will leave rates and quantitative easing unchanged. That is because the bank has made clear through its previous statements that it will not tweak rates even after inflation rises above 2%. Also, the bank does not have an incentive to ease considering that recent economic data from the US have been relatively strong.

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In Europe, the Bank of England will start its meeting on Wednesday and deliver its decision on Thursday. Like the Fed, the bank is not expected to change interest rates. It is also not expected to change the limit of its quantitative easing. Still, with the rising risk of a no-deal Brexit, analysts will be looking forward to the bank’s plans.

In Asia, the Bank of Japan will deliver its rate decision on Thursday morning. And as the other major central banks, it is not expected to change its policy since recent data from Japan have been relatively strong.

UK economic data

The British pound will remain in the spotlight as the Office of National Statistics (ONS) will release important data from the UK. On Tuesday, the bureau will release the July employment numbers.

Analysts expect the data to show that the unemployment rate rose from 3.9% to 4.1% during the month. They also see the average earnings with bonus falling by 1.3%. Still, the challenge for UK employment data is that the government will stop the furlough program in October, leading to a higher unemployment rate.

On Wednesday, the bureau will release the August inflation data. According to Bloomberg, analysts expect that the consumer prices will remain below the 2% target. Finally, the bureau will release the August retail sales data. The key currency pair to watch will be the GBP/USD.

New Zealand GDP data

On Thursday, Statistics New Zealand will release the final reading of the country’s second-quarter GDP data. In the previous release, the statistics office said that the country’s economy contracted by 12.8% in the second quarter. That led to a 13.3% year-on-year decline in the quarter. The decline followed to a 1.6% contraction in the first quarter. Other important economic data from New Zealand are balance of trade, which will come out on Wednesday and consumer sentiment from Westpac.

Canadian economic data

There will be several important Canadian data in the economic calendar. On Tuesday, Statistics Canada will release its manufacturing sales data. Analysts polled by Reuters expect the data to show that the sales increased by 8.7% in July after rising by 20.7% in the previous month. On Wednesday, the bureau will release the inflation data from Canada. Analysts expect the data to show that the headline CPI rose to 0.4% in August. Finally, the bureau will release the country’s retail sales on Friday.

Other economic numbers

There will be other important data in the economic calendar. Among them are the minutes from the Reserve Bank of Australia (RBA), Chinese industrial production data and retail sales, and US manufacturing and industrial production numbers. In the Eurozone, Eurostat will release the region’s inflation data on Thursday.

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