This week sees a whole raft of economic data and policy decisions from key Western economies. The US 4 July public holiday, Bank of England interest rate announcement, ECB interest rate announcement, US Non-Farm payroll and Manufacturing PMI will be watched carefully by traders to determine what the overall sentiment is and where the next trade will be.
In the last Bank of England MPC meeting it was highlighted that a further £50bln of quantitative easing will be added. Cable rallied on the back of the announcement and we could see something similar this week.
The expected rate cut from the ECB could be seen as a positive or a negative and only price action will dictate this to us.
After a disastrous ISM Manufacturing PMI number on Monday, the lowest reading since the credit crisis in 2009, the FOMC statement and Non-Farm payroll will be key to any QE3 expectations. If unemployment comes out negative then we almost certainly see another round of quantitative easing in the US.
Good luck out there!
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