Global Markets: 

  • Asian stock markets: Shanghai Composite lost 0.20 %, Hang Seng dropped 0.80 % and ASX fell 1 %. The Nikkei is closed due to a holiday in Japan.
  • Commodities: Gold at $1234 (+0.20 %), Silver at $18.65 (+0.30 %), Crude Oil at $90.40 (-1.10 %)
  • Rates: US 10 year yield stands at 2.61 

News & Data: 

  • New Zealand Performance Services Index 57.9 vs 58.4 prior
  • Australia New Motor Vehicle Sales -1.8 % MoM vs -1.3 % previous 

CFTC Positioning Data: 

  • EUR net short 158,000 vs short 162,000 prior
  • JPY net short 101,000 vs 118,000 short prior
  • GBP net long 27,000 vs long 10,000 prior
  • AUD net long 41,000 vs long 49,000 prior
  • CAD net long 11,000 vs long 13,000 prior
  • CHF net short 14,000 vs short 13,000 prior
  • NZD net long 10,000 vs long 10,000 prior 

The Week Ahead: 

The new trading week will be without doubt an eventful with one. Tomorrow, we have the RBA meeting minutes and the market is expecting that the CB will maintain it’s neutral bias. Later in the day, Bank of Japan Governor Kuroda will hold a speech, in which he will likely repeat that the BoJ will do whatever is necessary to achieve it’s inflation target, but will unlikely provide any new information. The UK will publish it’s inflation data, expected to come in at 0.4 % month-on-month and 1.5 % year-on-year. Germany will release it’s ZEW Economic Sentiment data, which is expected to decline again amid on-going geopolitical tensions. In the North American trading sessions, we’ll see the US PPI release and Bank of Canada Governor Poloz holding a speech.

The main events for Wednesday’s Asian/European session will be New Zealand Current Account data, UK employment data, Bank of England meeting minutes and Euro Zone inflation figures. Later in the day, the US will publish it’s inflation numbers and finally, we’ll have the FOMC Statement and the press conference with Fed Chair Yellen. The market is expecting a shift to a modestly hawkish bias at the next FOMC meeting, which should provide additional support for the US Dollar. It is expected that the Fed will revise their unemployment rate forecasts lower and the inflation forecasts higher.

On Thursday, New Zealand will release it’s GDP data, the UK will publish their Retail Salaes figures and we’ll get the US Building Permits, Initial Jobless Claims and Phily Fed Manufacturing numbers. Also, the Swiss National Bank will meet and decide on interest rates. While the central bank is expected to keep the target rate at 0 %, the market will be looking for comments regarding the 1.20 EUR/CHF floor. The pair traded below 1.2050 after the recent ECB announcement, but has bounced since then as the SNB said it would not hestitate from using negative rates to prevent further gains in the Swiss Franc.

Finally, on Friday, Canada will publish it’s inflation data and we will get the results from the Scottish independence referendum. The polls suggest a ‘No’ vote is still likely, but there has been increasing support for an independence vote recently, which has caused uncertainty in the markets. 

Upcoming Events: 

  • 07:15 GMT – Swiss PPI (0.2 % MoM, -1.0 % YoY)
  • 09:00 GMT – Euro Zone Trade Balance (€15.9bln)
  • 12:30 GMT – NY Empire State Manufacturing Index (16)
  • 13:15 GMT – US Industrial Production (0.3 % MoM)
  • 13:15 GMT – US Manufacturing Production (0.3 % MoM)