Forecasting the Coming Week: Enter the Fed… the BoJ, and the BoE!

Firmer US inflation prints lent support to the Dollar and US yields, underpinning at the same time the view of a Fed’s rate cut at the June gathering. On another front, EUR/USD and GBP/USD abandoned the area of recent peaks, and the Japanese yen remained in the limelight ahead of the BoJ’s potential lift-off next week.

The USD Index (DXY) climbed past the 103.00 hurdle with certain conviction, aided by rising speculation over an interest rate cut in June and the increasing likelihood of only two rate cuts (instead of three) for the current year. In the upcoming week, the NAHB Housing Market Index is due on March 18, ahead of Building Permits and Housing Starts on March 19. The Fed meets on March 20 along with the always-relevant press conference by Chair J. Powell. Usual Initial Jobless Claims, the Philly Fed Manufacturing Index, Existing Home Sales, the CB Leading Index, and flash S&P Global Manufacturing and Services PMIs are due on March 21.

EUR/USD picked up some pace after bottoming out in fresh weekly lows near 1.0870, reversing at the same time three consecutive weeks of gains. On March 18, the final Inflation Rate in the broader Euroland is due seconded by the Balance of Trade figures. The ZEW’s Economic Sentiment is expected for both Germany and the euro bloc on March 19, prior to the flash Consumer Sentiment in the euro area on March 20. March 21 will see the release of advanced Manufacturing and Services PMIs in Germany and the broader euro region, while Germany’s Business Climate tracked by the IFO institute is due at the end of the week.

The persistent risk-off mood weighed on the British pound and dragged GBP/USD to new multi-day lows near 1.2520 on Friday, ending the week with marked losses. In the UK, the Inflation Rate is due on March 20 ahead of Public Sector Net Borrowing, flash Manufacturing and Services PMIs, and the BoE interest rate decision, all on March 21. Finally, Retail Sales and the Gfk Consumer Confidence are due on March 22.

USD/JPY advanced for the fourth straight session on Friday, extending the rebound past the 149.00 barrier following lows in the mid-146.00s recorded on Monday. Machinery Orders are due on March 18, while the BoJ meeting and Industrial Production come on March 19. In addition, the Reuters Tankan Index, Balance of Trade figures, and the advanced Jibun Bank Manufacturing and Services PMIs are due on March 21. Ending the week, emerge the Inflation Rate and Foreign Bond Investment readings.

AUD/USD put the key 200-day SMA around the 0.6560 to the test on Friday, adding to Thursday’s losses and extending further the weekly leg lower. On March 18, the RBA’s Consumer Inflation Expectations come on March 18, prior to the RBA meeting on March 19. Additionally, the Q4 GDP Growth Rate and the flash Judo Bank Manufacturing and Services PMIs are scheduled for March 20. The Australian labour market report is due on March 21, ahead of the Balance of Trade results.

In China, Fixed Asset Investment, Retail Sales, Industrial Production, and the Unemployment Rate are all due on March 18. USD/CNH ended the week in a positive tone and beyond the 7.2000 barrier.

Anticipating Economic Perspectives: Voices on the Horizon

• ECB C. Lagarde speaks on March 20 along with BuBa President J. Nagel.
• BoC T. Gravelle and FOMC M. Barr speak on March 21.
• BuBa President J. Nagel, FOMC M. Barr, and Atlanta Fed R. Bostic speak on March 22.

Central Banks: Upcoming Meetings to Shape Monetary Policies

• The RBA and the BoJ will meet on March 19.
• The PBoC, the BI, and the Fed will hold their events on March 20.
• The BoE and the Norges Bank meet on March 21.