NFP report for August and OPEC+ meeting are behind us and now markets shift their attention to number of central bank policy decisions scheduled for next week. Central bankers from the euro area, Canada and Australia will announce decisions. Apart from that, a number of Fed members will deliver speeches next week. Be sure to watch US500, EURCAD and AUDUSD in the week ahead!
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Bull market on Wall Street continues with indices like S&P 500 (US500) and Nasdaq-100 (US100) reaching new record highs on an almost daily basis. Data has been improving recently and may continue to do so, especially labour market data. Federal pandemic unemployment benefits are set to expire next week, what should encourage more people to return to work. Potential QE tapering is a big risk for equities and a number of Fed speakers scheduled for next week may shed some light on the future policy outlook. 6 Fed members will deliver speeches on Wednesday alone.
Investors will be offered policy decisions from central banks from Canada and the European Union. ECB will announce its decision on Thursday at 12:45 pm BST and investors hope for more details on the timeline of QE tapering in Europe. Bank of Canada will announce its rate decision on Wednesday at 3:00 pm BST. However, in this case central bankers aren't expected to make any moves or announcements as risks to growth in the country mount. EURCAD was quite muted this week but things are set to get more interesting in the days ahead.
Apart from ECB and BoC, the Reserve Bank of Australia will also announce rate decisions next week. Announcement will come on Tuesday at 4:30 am BST. While RBA agreed to scale-back its bond-buying programme in July, minutes unveiled that central bankers from Australia consider Delta coronavirus variant to pose a major risk to the economy. As cases in the country spiked and new restrictions were enacted, there is a feeling that the RBA may hit a dovish tone next week. AUDUSD enjoyed strong gains this week and managed to distance further away from its recent 10-month low.
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