Last week, the Reserve Bank of Australia kept interest rates on hold at 0.75%. RBA governor Lowe’s semi-annual testimony to a parliamentary committee was balanced while he remained mindful of downside risks.
New Zealand employment numbers disappointed while both Canadian and US employment figures exceeded expectations. US President Trump was acquitted by the Senate of impeachment charges. Coronavirus fatalities grew and exceeded those of the SARS epidemic.
This week, we look forward to an interest rate decision from the Reserve Bank of New Zealand, GDP figures from the UK and the Eurozone, and an inflation gauge and retail sales numbers from the US. Several central bankers will also be on the stage, notably Fed Chair Jerome Powell, who will testify to committees from both the US House of Representatives and the Senate.
Monday 10th February saw a rise in Chinese inflation as year on year CPI for January rose to 5.4% from a previous reading of 4.9%. US CPI on Thursday is also expected to rise to 2.5% Y/Y for January from a previous reading of 2.3%. Last week, Australian CPI also rose, perhaps reflecting the knock-on effects of US/China trade tariffs.
On Tuesday morning, the UK reports its 4th quarter GDP situation, which is expected to have fallen to 0.8% Y/Y. It is a busy day for central bankers. ECB President Lagarde speaks at the Strasbourg European Parliament. Bank of England Governor Carney speaks before a House of Lords committee. US Fed Chair Powell will take questions from a House of Representatives Financial Services Panel.
On Wednesday, the Reserve Bank of New Zealand is largely expected to keep interest rates on hold at 1.0%. There is a slim chance of a cut. RBNZ Governor Orr will give a news conference after the decision and will testify later at a parliamentary select committee. Fed Chair Powell will also testify to a Senate Banking Panel.
The main event of Thursday is US CPI. On Friday, 4th quarter Eurozone GDP is anticipated to remain flat at 1.0%. US retail sales (M/M) for January are expected to remain stable at 0.3%. The University of Michigan’s Consumer Sentiment Index for February is set to fall slightly to 99.2 from last month’s reading of 99.8.
For those that keep an eye on cryptocurrencies, enthusiasts will have been delighted to see that Bitcoin touched 10,000. Crude oil is teetering around $50 per barrel. US equity indices remain elevated despite potential supply-side disruption from a multitude of Chinese exporters.
Good Luck and Good Trading! Ben Robson
Ben Robson is the CEO of Spectrex Commodities and author of Currency Kings- How Billionaire Traders Made Their Fortune Trading Forex And How You Can Too.
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