This week will be rich in publication of minutes of recent meetings of key central banks and in publication of preliminary PMI indices for November. These events seem to be the most important in the macroeconomic calendar.
Central Banks — The Fed, the European Central Bank (ECB) and the Reserve Bank of Australia (RBA) will publish the minutes from their latest meetings. Already on Tuesday, November 19 at 1:30 the minutes of the last RBA meeting will appear. During the October meeting, the Australian central bank left the main interest rate at a record low of 0.75 percent. The RBA said that global economic changes would justify a longer period of low interest rates in Australia to achieve full employment and an inflation target. These may also be investors' expectations before the publication of minutes. If there were any mention of a possible further interest rate cut, this could be bad news for the Australian dollar.
On Wednesday, November 20 at 20:00 the minutes of the last Fed meeting will appear. Let us remind you that in October there was a third cut in interest rates in the United States, and the range for the federal funds rate was set at 1.5-1.75 percent. In its decision, the Fed seemed to mainly follow falling inflation expectations and fears of an economic slowdown related to the trade war. Policymakers, however, have signaled that it is likely that the time will now come to pause and keep interest rates unchanged with the possibility of an appropriate response if necessary.
On Thursday, November 21 at 13:30 there will also be minutes from the last ECB meeting headed by Mario Draghi. At that time, the central bank decided to leave interest rates unchanged, but with the possibility of lowering them when inflation prospects did not return close to but below 2 percent target.
On Friday, November 22 at 10:00 PMI’s for the euro zone will be published (manufacturing and services PMI). Due to the easing of the trade war and the chances of reaching a preliminary agreement, the market assumes that PMI could increase this month compared to the previous month. Similar expectations also apply to US PMI, which will be published the same day at 15:45. The market and investors will watch these indices carefully as they may herald an improvement in sentiment and in the global economy.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal Opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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