On Thursday, attention of the markets is going to be fully paid to the 2-day Federal Open Market Committee meeting. The question is whether the Fed will increase its interest rates, the move markets have been long waiting for, which would cause a serious growth in the USD, or a correction if rates stay unchanged. Many experts suggest that despite a fall in unemployment and an increase in participation rates, the rate hike is going to be delayed. There are two main reasons for doing so – financial market instability caused by a decline in the Chinese stock market, and low inflation in the US. Increasing rates in current conditions may cause an excessive strengthening in the USD, which would harm the American economy. There is a possibility that the Fed will delay the rate increase but announce the dates of its future hike at press conference. So markets will find out of the Fed Interest Rate Decision today at 9 pm (all times stated in GMT +3), at 9:30 pm the Fed’s Monetary Policy Statement and Press Conference will start, and at 10 pm FOMC Economic Projections is due.
There are few more important events on Thursdaythat attention needs to be paid to. The Bank of Japan Governor Kuroda Speech is planned for 9:35 am, at which he could tip about the future bank’s actions. The SNB Interest Rate Decision is due at 10:30 am, and the regulator is likely to leave the interest rate unchanged at its current -0.75%. August data on retail sales is coming out in the UK at 11:30 am, an important indicator for the GDP growth estimate. Both figures, Retail Sales (year-on-year) and Retail Sales ex-Fuel (YoY) are expected to fall, from 4.2% to 3.8% and from 4.3% to 3.9% respectively, which would pressure the GBP. Construction sector data for August is due in the US at 3:30 pm. Building Permits (MoM) are forecasted to grow from 1.119 to 1.160 million, while Housing Starts (MoM) are expected to fall from 1.206 to 1.170 million. The RBA’s Governor Glenn Stevens Speech is due at 2:30 on Thursday night, during which he will share his view of the prospects of the Australian economy.