Economic Week: ECB Meeting, Fed Minutes In Focus

  • by Ahmed Mamdouh
  • April 8, 2019, 11:58 AM
  • 149 Views
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Perhaps the most prominent economic event this week will be the European Central Bank's monetary policy meeting and the Federal Reserve’s minutes, as well as any developments related to the Brexit and the trade dispute between the United States and China.

US Dollar

Hopes for a trade deal rose after the last week’s round of US-China trade negotiations, but markets will keep a close eye on any developments.

U.S. Donald President Trump said at the end of last week that the United States and China are aiming to reach a trade deal in the next four weeks, but he did announce anything about the long-awaited summit with Chinese leader Xi Jinping.

This week, the Federal Reserve minutes of March’s monetary policy meeting will be released, where market participants are expected to discuss the details of the vote by the Federal Committee members in order to hold interest rates.

It is worth mentioning that the latest Fed meeting has witnessed a cut in interest rate hike forecasts this year, which will increase the importance of the minutes as it will probably divulge details about all the variables that affected the FOMC's decision.

On the economic data front, the U.S. consumer price index may show a 0.3% rise in February and a 1.8% annualized increase.

Euro

The euro’s movements will largely depend on the ECB's monetary policy decision, as policy makers will meet this week to set interest rates.

The central bank is expected to retain interest rates at the current low levels, but markets will wait for an update about the economic conditions in the euro area, amidst the latest global slowdown, trade risks and Brexit uncertainty.

As for the economic data, investors will focus on a number of industrial reports from major economies in the euro area.  

Pound Sterling

A wave of optimism prevailed at the end of last week as expectations increased that the EU would grant Britain the possibility of postponing Article 50 for a year.

A European diplomat familiar with the plan told CNN that the idea of ??a "flextension" of the Brexit will be presented at the European Council summit in Brussels on April 10.

At the same time, British Prime Minister Theresa May will be looking for a compromise with opposition leader Jeremy Corbyn to be presented to the House of Commons this week.

The UK will also release important economic indicators including industrial production, trade balance and monthly GDP for February.

Commodities

Gold fell last week as a result of some gains in the U.S. dollar and after prices fell below the psychological level of $1300 per ounce.

The direction of the yellow metal this week will probably depend on the green currency’s movements and the ability of the yellow metal to build on a strong support point that will push it back above the mentioned psychological level.

With regard to oil, prices managed to rise last week after increasing optimism that the United States and China could reach a trade agreement soon.

But last week's surge in US crude oil inventories limited the gains, with inventories rising 7.238 million barrels.

The next meeting of OPEC and non-OPEC members is expected to be held in June, as they will discuss the extension of supply cuts.

Ahmed Mamdouh

Ahmed Mamdouh is the head of the English Fundamental Analysis at Ofeed.com, with 11 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from the American University in Cairo and a Bachelor Degree in Economics from the Faculty of Economics and Political Science, Cairo University.

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