Your Weekly Fundamental View (Sep 18–22)

September 18, 2017 19:19

Need to Know

This week is abundant with strong economic data. FOMC and BOJ rate decisions are in focus and traders should be well aware that both the actual data and press releases and/or statements regarding their respective monetary policies should move both the USD and YEN currency basket. Let's take a look at this week's most important fundamental data.

Coming Up

The AUD Monetary Policy Meeting Minutes Are Due on Tuesday, 19 September

The data represents a detailed record of the RBA Reserve Bank Board's most recent meeting, providing in-depth insights into the economic conditions.

Why should you care? Traders and investors always look for cues for future economic policy and any possible hints of interest rate change. A short term price spike in AUD pairs following the news could also be used to trade the event.

USD Crude Oil Inventories Due on Wednesday, 20 September

A build-up in crude oil inventories usually signals a decreasing demand from refiners. On the other hand, a drop would signal that refiners are still producing at elevated levels, and the inventory overhang in oil products could continue.

Why should you care? This is primarily a US indicator, but it also affects the CAD, due to the large size of Canada's energy sector.

FOMC Statement and Federal Funds Rate Decision on Wednesday, 20 September

Source: Historical FOMC chart, highcharts.com

The FOMC statement discusses the US economic outlook and the outcome of the FOMC members vote on their interest rates. The rate decision is usually priced into the market, and anything unexpected should lead to heavy volatility in USD crosses.

Why should you care? Traders usually decipher the statement based on the general sentiment (hawkish, neutral, or dovish) as USD crosses tend to move a lot after the statement disclosure. This time market doesn't expect any deviations from the predicted outcome so any outcome that deviates from the prediction could be very volatile.

BOJ Monetary Policy Statement, policy rate with a press conference on Thursday, 21 September

The most important decision for the BOJ and Yen, it shows the interest rate levied on excess current account balances held at the BOJ.

Why should you care?

Market doesn't expect any hike or rate cut so the deviation from the expected result could bring huge volatility in the Yen currency basket. The statement is among the primary tools the BOJ uses to communicate with investors about monetary policy. It contains the outcome of their decision on asset purchases and commentary about the economic conditions that influenced their decision.

USD Unemployment Claims Are Released on Thursday, 21 September

These claims are the earliest national economic data, representing the number of individuals who filed for insurance for the first time during the past week. If the actual result is weaker than the forecast, it could be reflect well on the currency.

Why should you care? The number of unemployed people is an important signal of the overall economic health and could hint at future monetary policy steps.

CAD CPI is Out on Friday, 22 September

The data defines the change in the price of goods and services purchased by consumers.

Why should you care? News can show a bit of volatility in the US crosses as the CPI accounts for a majority of overall inflation.

NZD Parliamentary elections are due on Friday, 22 September

The winners will likely be projected before the official vote count is announced, based on early vote counts and exit polling

Why should you care? Elections usually create volatility in their respective currencies. Price gaps are possible