Talking Points:
- Consensus forecasts expected UK industrial and manufacturing production to have contracted in February, and for GDP to come in flat.
- No rate move is anticipated at the April ECB meeting, but a greater discussion about the new TLTRO program and the effects of negative interest rates could be prominent.
- The March Fed meeting saw the FOMC eliminate plans to raises rates in 2019, as well as end its balance sheet reduction process sooner than expected.
Join me on Mondays at 7:30 EDT/11:30 GMT for the FX Week Ahead webinar, where we discuss top event risk over the coming days and strategies for trading FX markets around the events listed below.
04/10 WEDNESDAY | 08:30 GMT | GBP INDUSTRIAL & MANUFACTURING PRODUCTION, GDP (FEB)
February UK Industrial Production is due to have grown by only 0.1% over the past month, down from the 0.6% monthly rate seen in January; the year-over-year reading is due in at -0.8% from -0.9%. February UK Manufacturing Production will take a similar path: 0.2% from 0.8% (m/m); and -0.7% from -1.1% (y/y). Ultimately, the monthly February UK GDP reading is due in at 0% from 0.5%.
Read the full report: February UK GDP & GBPJPY Price Outlook
04/10 WEDNESDAY | 11:45 GMT | EUR EUROPEAN CENTRAL BANK RATE DECISION
There’s little reason to think that the conditions in front of the Governing Council will warrant a change in tone beyond their dovish shift seen last month. They’ve already eliminated their previous forecast of a rate hike sometime around “summer 2019,” and rates markets are leaning more into a rate cut (15%) than a rate hike (1.8%) by the end of the year.
Read the full report: April ECB Meeting & EURJPY Price Outlook
04/10 WEDNESDAY | 12:30 GMT | USD CONSUMER PRICE INDEX (MAR)
According to Bloomberg News, headline CPI is expected in at +1.8% from +1.5%, and Core CPI is due in to hold at 2.1% (y/y). The inflation report on Wednesday will only underscore the belief that the Fed is due to keep policy on hold for the foreseeable future; Fed funds futures are pricing in a 39% chance of a 25-bps rate cut in October and a 56% chance of a 25-bps rate cut by December.
Read the full report: March US Consumer Price Index & USDJPY Price Outlook
04/10 WEDNESDAY | 18:00 GMT | USD MARCH FOMC MEETING MINUTES
The Federal Reserve’s March meeting hit markets like an earthquake. Between the decision to eliminate the prospect of a 25-bps rate hike in 2019 as well as end the balance sheet reduction process later this year, traders were caught off guard. Citing a weakening economic backdrop in the United States thanks to the US government shutdown, coupled with a challenging global environment weighed down by trade tensions, the Fed took what some may consider a surprisingly dovish stance.
Read the full report: March Fed Meeting Minutes & EURUSD Price Outlook
FX TRADING RESOURCES
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--- Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher, email him at cvecchio@dailyfx.com
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