June 17th Forex Preview: A busy day for the markets

Jun 17, 4:30 am
volatile

The currency markets practically went nowhere this week in a clear indication in the run up to the high impact news releases this week. However, today marks one of the busiest days for the currency markets in the week with some major news releases lined up from across the globe. No doubt, volatility is likely to creep into the markets today. Here’s the quick guide to today’s main events:

UK Jobs Report

The May unemployment data is due for release at 0830 hours GMT. The consensus, heading into this event is the expectation that the UK’s average earnings index rose 2.5% from 1.9% previously while the unemployment rate is expected to be steady at 5.5%.

So far, the UK’s labour market has managed to grow at a steady pace, but some economists are of the view that the UK’s unemployment rate still has further scope for improvement. Of course, all things remaining equal, the change in the average earnings index will be a number to watch for as it signals improving wages in the workers, which could indirectly be seen as a boost to the UK economy and retail spending.

BoE Meeting Minutes

Around the same time as the UK jobs report is released, the BoE will be releasing its meeting minutes. There is no major shift expected from the BoE as inflation continues to remain subdued and the markets are most likely to ignore the outcome from the Central Bank’s meeting minutes unless there is a surprise that hasn’t been priced into the markets.

Eurozone CPI

Although not that big of a market mover under current circumstances, the Eurozone’s final CPI numbers are expected to be released at 0900GMT. The consensus expects the headline CPI to stabilize at 0.3%, while the Core CPI is expected to be steady at 0.9%.

A match of estimates on the actual print is unlikely to bring about any major changes to the Euro cross currencies as the markets shrug off economic releases and instead focus on the Greece debt negotiations which are seemingly showing no signs of progress.

FOMC Statement and Press Release

The US Federal Reserve will conclude its two-day meetings and will publish its monetary policy statement which includes the Fed staff economic projections and a press conference by Janet Yellen.

While the markets rule out a rate hike in today’s meeting, the tone of the Fed chair and the monetary statement is likely to offer more clues in regards to future rate hikes. Although the US experienced a slump in the first quarter GDP, which contracted, recent data has suggested that the US economy should bounce back by the end of the second quarter.

A rate hike from July’s meeting is very much a possibility although the markets are pricing in a September/October rate hike.

Expect to see quite some volatility starting from the FOMC event which is due at 1800GMT with the press conference starting 30 minutes later.

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John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.

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