Key Events for the Trading Week Ahead
The United States has a new President. On Saturday, Joe Biden won Pennsylvania, and with that the minimum number of votes needed to win the presidency.
However, the news did not have much of an impact on financial markets. At the opening today, we barely saw the USD moving, implying that the outcome was already priced in. Therefore, traders can return to the regular financial events for the week ahead and for the rest of the weeks left of 2020.
What to Look For This WeekCopy link to section
The main event of the trading week is the ECB’s forum on central banking. Some years ago, the ECB copied the Fed’s model and started organizing an annual forum in Sintra, Portugal, just like the Fed does in Jackson Hole. Only this year, due to the pandemic, the event takes place online.
Nevertheless, some important topics are covered and the heads of the ECB, BOE, and the Fed are scheduled to speak. In a world dominated by central banks’ interventions, the event will likely create volatility in financial markets.
Later today, the Bank of England’s Governor Andrew Bailey speaks at the Green Horizon Summit. It is the first out of three speeches he will hold over the week, so expect the GBP pairs to be affected by his interventions.
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The Reserve Bank of New Zealand (RBNZ) is scheduled to release its interest rate decision and monetary policy on Wednesday. The market does not expect anything new from the RBNZ, but if we look at the Reserve Bank of Australia (RBA) stimulus package released last week, it could be that the RBA will surprise markets.
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The CPI (Consumer Price Index – inflation) in the United States on Thursday will affect the USD pairs. The market expects a further decline MoM, and so the pressure builds on the Fed to act at the next meeting.
Speaking of the Fed, it did not change the monetary policy at last week’s meeting for the simple reason that the focus in the country was elsewhere. However, just like the ECB, the Fed is expected to further ease monetary conditions in December.
With that, expect any news related to the transfer of power in the United States to affect the markets too. Trump is unlikely to leave the office without fighting until the last day.