- Forex traders are in for an eventful week next week with a slew of economic data accompanying key central bank interest rate decisions
- The week of March 6th starts off with February Retail Sales data from the European market
- This will be followed by Australia’s January trade balance data and the Reserve Bank of Australia’s interest rate decision
- The focus then shifts to the United States, where Federal Reserve Chair Jerome Powell testifies to the US Banking Committee
- Soon after Fed Chair Powell’s testimony, the Bank of Canada will announce its interest rate decision
- The week closes off with the Bank of Japan’s (BOJ) interest rate decision
Forex traders are in for an eventful week next week with a slew of economic data accompanying key central bank interest rate decisions.
The week of March 6th starts off with February Retail Sales data from the European market. The data reflect changes in sales of the Eurozone retail sector in the short term. February Retail Sales (YoY) are forecast to increase to 1.9 per cent from -2.8 per cent last recorded.
RBA interest rate decision
This will be followed by Australia’s January trade balance data and the Reserve Bank of Australia’s interest rate decision. Traders are forecasting a quarter-point rate hike after minutes of the last meeting showed that the Board forecast “further increases.” Since a rate hike is not yet priced in by the market, any increase in interest rate may give a short-term boost to the AUD. However, traders may look for further clues from RBA’s Rate Statement.
Key U.S. events
The focus then shifts to the United States, where Federal Reserve Chair Jerome Powell testifies to the US Banking Committee. His two-day testimony could give some indications on the U.S. monetary policy outlook.
The market will also keep a close watch on the U.S. nonfarm payroll data and February unemployment rate on Friday. Although the U.S. is expected to have lost 57,000 job positions in February, the unemployment rate is forecast to remain unchanged at 3.4 per cent.
BOC interest rate decision
Soon after Fed Chair Powell’s testimony, the Bank of Canada will announce its interest rate decision. The market expects the policy rate to remain unchanged at 4.5 per cent. The rate was last increased in January by 0.25 per cent, being the 8th rate hike in the past 12 months.
In its last meeting, the central bank had indicated a rate pause conditional upon the prevailing inflation rate and economic growth data. The recent data shows that Canada’s headline inflation has fallen to 5.9 per cent, while the Real gross domestic product (GDP) was nearly unchanged in the fourth quarter. BOC’s rate statement, which follows the interest rate decision, will be key for traders to get further guidance.
Kuroda’s last BOJ meeting
The week closes off with the Bank of Japan’s (BOJ) interest rate decision. The meeting also marks to be the last meeting for Haruhiko Kuroda as governor of the BOJ.
Although the market has not priced in any rate hikes, the focus will be on BOJ’s Monetary Policy Statement. Japan’s inflation rate sits at 4.3 per cent, which is well above the central bank’s 2 per cent target. Therefore, traders will pay close attention to the incoming governor, Kazuo Ueda, for his tone on policy direction.
