The long-awaited news of last week was ECB’s interest rate decision. It became known that ECB left interest rates unchanged: key refinancing rate has remained at the level of 0.0%, the deposit rate:-0.40%, loan rate: 0.25%. Asset purchase program was left at the level of 80 billion euro per month.
During the last press-conference ECB president Mario Draghi said that the interest rates would be either kept at the current levels or lowered for a long time, even after the termination of QE program.
At the time of press-conference volatility in the pair EUR/USD was above 120 points. Next day the pair lost over 60 points due to poor European macro-economic statistics. However, European stock indices hardly responded to the ECB’s decisions and the comments by Mario Draghi.
At the opening of the trading day the pair EUR/USD is undergoing downward correction.
Investors’ attention this week will be focused on the meetings of the Central Banks of New Zealand (27 April), USA (27 April), Japan (28 April).
Other news will be as follows:
16:00 – sales of new homes in the USA in March. This index indirectly shows the state of the manufacturing, service sectors, as well as the labor market.
15:45 – US preliminary business activity for Aril as per Markit.
16:00 – US consumer confidence index for April. Positive consumer price index contributes to the economic growth in the country and vice versa.
00:45 – New Zealand’s trade balance for March.
03:30 – important inflation indices of Australia for Q1. The decline in indices will indicate the decline of the purchase activity of the population, and the decrease of selling prices. These factors will trigger slowdown of the economic development in the country. Decline in inflation will force the Central Bank to introduce monetary policy easing, which will cause the decline of price of the national currency.
After 06:00 press-conference of the Bank of Japan will start. Bank’s president, Mr. Kuroda will speak on the future monetary policy of the bank.
16:30 – weekly data on changes to oil inventories in the USA by US Department of Energy. Now, the US oil inventories have reached historical highs at the level of 500 million barrels. The level of oil stocks have grown by 2.08 million barrels last week.
20:00 – US Fed interest decision. It is expected that interest rates will be left unchanged.
20:30 – comments on US monetary policy and interest decisions.
23:00 – interest rate decision by the NZRB. Following up comments of the Bank on future monetary policy. It is possible that the RBNZ will lower interest rates, which will indicate continuation of the soft monetary policy. The rate may be lowered twice: in June and August.
01:30 – Japanese macro-economic statistics for March-April.
05:00 – interest rate decisions by the Bank of Japan and following –up press-conference.
11:00 – business sentiment index and consumer confidence index of Eurozone for April.
14:30 – Important US macro-economic statistics for April and Q1including GDP for Q1, price index and number of applications for unemployment benefits for the last week. The decline in applications will show improvement of the labor market and the entire US economy.
11:00 – preliminary consumer price index for April and unemployment rate in Eurozone for March.
Summary: According to the agency Bloomberg and key people in the Japanese government, the Central Bank can continue monetary policy easing, lowering interest rates. Other leading Central Banks of the world also adhere to monetary policy easing, unlike the US Fed. There are all grounds to consider opening medium-term long positions on the USD.