A week of central bank decisions but the Fed will draw most of the focus

This week’s price action largely resulted around the dollar and events in US fixed income as the DXY toyed with the 90.0 handle. While policy decisions from the Bank of Canada and the European Central Bank were released, markets tended to focus on inflation barometers in the US ahead of next week’s FOMC meeting. There was a lot of hype for Thursday’s US CPI release, and while the inflation print didn’t disappoint at 5%, the market reaction was underwhelming. The S&P 500 hit a fresh all time high, the US 10-year dropped 10bps to 1.43%, and the dollar broadly weakened. Next week, the economic calendar is brimmed with central bank policy decisions. The Federal Reserve, Central Bank of the Republic of Turkey, and the Central Bank of Brazil are likely to be the most exciting ones out of the agenda. Over the weekend, events in the UK will focus on the government’s decision to stick to its June 21st reopening plan as cases of the delta variant rise.

Read Monex’s Week Ahead here:

DOWNLOAD THE FULL REPORT

Authors:

Simon Harvey, Senior FX Market Analyst

Olivia Alvarez Mendez, FX Market Analyst

Ima Sammani, FX Market Analyst

Disclaimer

This information has been prepared by Monex Canada Inc., an execution-only service provider. The material is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is, or should be considered to be, financial, investment or other advice on which reliance should be placed. No representation or warranty is given as to the accuracy or completeness of this information. No opinion given in the material constitutes a recommendation by Monex Canada Inc., or the author that any particular transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, it is not subject to any prohibition on dealing ahead of the dissemination of investment research and as such is considered to be a marketing communication.