Summary:
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Norges Bank to make interest rate decision in the morning
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PMIs from US and euro area may increase volatility on EURUSD
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First ECB meeting of the year
It looks like almost all of the market moving events scheduled for this week will take place on Thursday. Norges Bank will announce its interest rate decision in the morning. Simultaneously, preliminary PMI data will be released. ECB will announce its first interest rate decision of the year in the early afternoon. Potentially market-moving conference of Mario Draghi will begin at 1:30 pm GMT. PMI indices from the United States as well as DOE report on oil inventories will be published during the US trading hours.
9:00 am GMT - Norges Bank interest rate decision. The Norwegian economy has been coping really well recently. Drop in the PMI indices was smaller than in the euro area, Inflation remains robust way above 3% and today’s data release showed unemployment rate falling from 4% to 3.8%. Norges Bank has all the reasons to deliver a rate hike and indeed it will. However, not today but during meeting in March. Nevertheless, NOK traders should take a look at the statement to see whether central bankers stay committed to their previous plans.
9:00 am GMT - Preliminary PMI indices from the euro area for January. PMI indices from the euro area has been in the free fall mode throughout the major part of the previous year. As concerns over potential global slowdown mount there is little scope for improvement. Both, manufacturing and services, held slightly above the contraction area in the previous month and a drop there at the beginning of the year may spoil moods for the whole 2019.
12:45 pm GMT - ECB interest rate decision. The European Central Bank will hold its first meeting of the year today. Of course no one expects any change to the level of interest rate to be made but investors will focus on remarks concerning recently terminated net asset purchase programme. Mario Draghi will answer journalists’ questions during the post-meeting conference at 1:30 pm GMT. Our preview of the event is available here.
2:45 pm GMT - Preliminary PMI indices from the United States for January. When it comes to the US PMI indices we have observed some volatile swings in 2018. Nevertheless, the manufacturing gauge turned significantly lower in December raising question over the condition of the US economy. As the US government shutdown continues to delay releases of hard data, survey data like PMIs or ISMs may come in handy in assessing the state of the economy.
4:00 pm GMT - DOE report on oil inventories. Against the market expectations yesterday’s API reading showed a major build in inventories. However, major oil agencies claim that actions undertaken by OPEC+ group will be enough to reduce glut on the market and avert further building of stockpiles in the first half of the year. Such a development would surely be positive for oil prices therefore traders should watch inventories data carefully to see whether this scenario materializes. Today’s DOE report is expected to show an almost 0.3 mbd drop in stockpiles.
Major US companies reporting earnings today:
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American Airlines (AAL.US)
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Bristol-Myers Squibb (BMY.US)
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Intel (INTC.US)
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Starbucks (SBUX.US)
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Union Pacific (UNP.US)
EURUSD halted declines at the 1.1350 handle. However, the main currency pair failed to break above the 50-session moving average (green line on the chart) later on questioning potential recovery. Abundance of market-moving events in today’s calendar has a scope to make situation more clear at the end of a day. Source: xStation5
