On Tuesday and Wednesday Janet Yellen will deliver an annual report on the activities of the Federal Reserve. In addition, the Fed chairman will share with forecasts of FED regarding US monetary policy. This will certainly be the most important event of the day, and perhaps of the week, so keep in mind that afternoon Yellen’s speech in your trading plan. What happened in last hours, and what else will happen in the course of today’s session? More about this below:
Discussion on the Asian session should begin with the most recent data from China. Report on the January changes in the level of the Chinese CPI positively surprised investors. Last month, the dynamics of consumer inflation reached a rate of 1% per month, which translates into an increase of 2.5% compared to the corresponding period a year earlier. Positive information coming to us from Beijing influenced quite heavily on the valuation of AUD. In addition, better data (including the index of business confidence) published the National Bank of Australia. In result of the synergy of two positive factors, AUD/USD once again found itself in the vicinity of the February high:
About 8:00 we got to know the latest German CPI calculation. This time, more important, however, proved to be published in parallel, estimates of changes in the level of GDP of our western neighbor. Germany’s economic growth weakens noticeably. On a quarterly basis, GDP growth was only 0.4% (against a forecast of 0.5%), while in annual terms, only 1.2% (instead of the forecast 1.7%). Although these are only preliminary calculations, for reaction of the market we didn’t have to wait to long. On the chart of EUR / USD there was a large black candle:
What else awaits us?
Tuesday’s session will be more resourceful in macroeconomic readings than yesterday. Already a quarter after nine o’clock we will calculate the CPI from Switzerland. Much more interesting, however, they may be scheduled for 10:30 am data from the UK. We will know the number of reports on CPI, underlying CPI, PPI (producer inflation) and the index of real estate prices.
About 11:00 we will follow the German ZEW report concerning the economic sentiment of entrepreneurs and their assessment of current economic conditions. In parallel, Eurostat will publish the preliminary calculation of the change in GDP euro-zone countries. Expected no changes compared to the previous reading after weak data from Germany may be too optimistic scenario. In addition, at 11:00 we will also change the level of the European industrial production and the ZEW index.
The US session starts publication of PPI at 14:30 Polish time. Definitely more important, however, will be hearing of mrs.Yellen in Congress, which is scheduled for 16:00. At 19:00 and fifteen minutes later we still await speech of two members of the FOMC – Kaplan and Lockhart.
