Economic calendar: More than FOMC

Summary:

• CNB and FOMC viewed to deliver 25 bp rate hike

• RBNZ expected to stay on hold

• Oil inventories forecasted to decline despite build signalled by API yesterday

While FOMC meeting is definitely the major event of the day one should not be distracted from the fact that two other central banks will also make their decision today. RBNZ will announce its decision 3 hours after Fed but no change in the level of interest rates is expected. On the other hand, Czech National Bank is expected to deliver a 25 bp rate hike at noon (12:00 pm BST). Last but not least, oil traders should keep on guard as weekly inventories data from DOE will be released in the afternoon.

3:30 pm BST - DOE weekly oil stocks. API estimates released yesterday pointed a medium build in the oil stocks but that did little to stop the ongoing rally. However, some weakness could be spotted after one of the major investment banks questioned the possibility of oil price reaching $100 handle. Elsewhere, Donald Trump tries continues to accuse OPEC cartel of artificially high prices. Today’s DOE data release may result in short term shift in moods depending on the reading. Oil inventories are expected to decrease by 1.675 mb while gasoline and distillate stocks are forecasted to increase 0.6 mb and 0.5 mb respectively.

7:00 pm BST - FOMC decision. Market consensus suggests that FOMC will raise interest rates today by another 25bp and would be a huge surprise if the US central bankers chose not to do so. Therefore market participants will focus mostly on statement and press conference of Chairman Powell (7:30 pm BST). Attention should be paid to the updated macroeconomic projections as they may hint whether the Fed is committed to follow its gradual rate hike path or whether moods among central bankers changed.

10:00 pm BST - RBNZ decision. New Zealand enjoyed a decent pace of growth in the second quarter of the year (2.8% YoY) but much has changed since. Shifts on the political scene caused soft indicators to weaken and the price growth remains low. Having that in mind, RBNZ is viewed to be closer to cutting rates rather than hiking. Today’s meeting is not expected to produce a change in the level of interest rates but statement released along with the decision may offer more insight.

Central bank speakers scheduled for today:

• 10:00 am BST - Norges Bank Deputy Governor Matsen

USD clearly underperformed against the EUR in the past couple of weeks. Main currency pair managed to climb above the mid term resistance zone and short term sellers’ attacks seem to be halted by the 33-period moving average (green line on the chart above). Today’s FOMC decision may give USD chance to recover. Source: xStation5