GLOBAL INFLATION DATA TO SET THE TRADING TONE FOR FINANCIAL MARKETS
During the upcoming trading week inflation comes back to the forefront for traders and investors, as the United States economy and the eurozone trading block release key CPI inflation numbers for the month of February. Economists expect headline CPI from the U.S economy to remain close the FED's two percent target, whilst the eurozone is expected to show only a modest monthly rise in CPI inflation.
Other highlights from the macroeconomic calendar include the release of the Bank of Japan Meeting Minutes, and a key interest rate decision from the Swiss National Bank. The American economy also releases further high-impact data, with the release of monthly Retail Sales data and the Michigan Consumer Sentiment survey.
Monday 12th March, U.S Monthly Budget Statement
The Financial Management Service issues the U.S Monthly Budget Statement, which resumes the financial activities of Federal Reserve Banks, disbursing officers and all federal entities. The difference in value between the Federal's Government income and the expenditure is measured by the Federal Budget Balance on a monthly basis.
Tuesday 13th March, U.S CPI Inflation
The United States Consumer Price Index is released by the U.S Bureau of Labor Statistics, CPI evaluates fluctuations in the cost of living by measuring the changes in prices consumers pay for a set of items. The report keeps track of changes in the price of goods and services that a typical American household may purchase. Increasing Consumer Price Inflation is usually indicative of more dollars being required, in order to purchase the same sum of basic consumer items.
- The U.S dollar index remains bullish while trading above the 89.90 level, further upside towards 90.45 and 91.55 seems possible.
- Should the U.S dollar index move below the 89.90 level, a decline towards the 89.40 and 88.80 support levels may occur.
Wednesday 14th March, Bank of Japan Meeting Minutes
The BOJ Monetary Policy Meeting Minutes represents a detailed record of the Bank of Japan's policy setting meeting, which are held in order to review economic developments inside and outside of Japan. At last week's Bank of Japan policy meeting, board members of the BOJ choose to keep interest rates unchanged at record low levels, whilst reaffirming their commitment to ultra-loose monetary policy.
- The USDJPY pair remains bullish whilst trading above the 106.20 level, further upside towards 107.30 and 108.10 seems possible.
- Should the USDJPY pair trade below the 106.20 level, a further decline towards the 105.50 and 104.60 levels remains possible.
Thursday 15th March, SNB Interest Rate Decision
The board members of the Swiss National Bank come together to agree on where to set the target range for the nations rate on Thursday, with most economists expecting the SNB to keep rates on-hold at –0.75 percent. Obliged by the Constitution and by statute, the bank act in accordance with the interests of the country as a whole, by raising rates to control inflation or, alternatively, reducing them to spur the economic growth.
- The USDCHF pair is bullish while trading above the 0.9460 level, further upside towards 0.9580 and 0.9640 seems possible.
- Should the USDCHF pair decline below the 0.9460 level, key weekly support is then found at the 0.9380 and 0.9288 levels.
Friday 16th March, Eurozone CPI
The Consumer Price Index, released by Eurostat measures the changes in the price of goods and services from the perspective of the consumer. A higher value of the CPI represents significant inflationary pressures in the Euro Zone economies. Rising inflation can put pressure on the European Central Bank to raise interest rates, because the ECB Governing council have a clear mandated inflation target.
- The EURUSD pair remains short-term bearish whilst trading below the 1.2278 level, further declines towards 1.2205 and 1.2160 seem possible.
- Should the EURUSD pair hold price-action above the 1.2278 level, further upside towards 1.2351 and 1.2500 remains possible.