The culmination and at the same time the most important event of the Wednesday session will be publication of the minutes of the last FOMC meeting. Although the minutes often pass unnoticed by the market, they are closely followed by investors looking for clues regarding future monetary policy of the Fed. Details in the morning review of the market.
What we find in the calendar? Preparation for the session
Before we get to the forecast before the FOMC minutes, let’s focus on Wednesday’s macroeconomic calendar. During the European trading hours we await few interesting publications.
Particular attention should be paid to the next forecast British GDP for Q4 (10:30) and the January CPI inflation in the euro area (11:00). Then at 14:30 Canadians publish results of retail sales, and at 16:00 we will know the result of the sale of residential real estate in the USA (16:00):
Then will not remain nothing else but wait until 20:00 for the publication of the minutes of the FOMC. For several hours before the event EUR/USD weakens again deepening the February lows – the price is lowest for more than a month andis continuing Tuesday’s depreciation:
When trading closes below the lows of February 15, it can set a new level of 1.0520 resistance area.
Rate hike in March, May or June? Forecasts before FOMC minutes
During her last week before Congress, Fed president Janet Yellen said she did not know exactly when the Federal Reserve decides to raise interest rates, “March, May, June – I am not able to determine precisely.” Statements of this type on one hand can be a smokescreen on the other, however, they suggest that Fed will not hurry with interest rate hikes as early as on its next meeting scheduled for March 14-15.
But back to today’s protocols (regarding the meeting, which took place at the turn of January and February) – as that during the same meeting we didn’t find out too much the same minutes are also not likely to bring much new information. Markets however, will trace any clues about the potential term of changes in US interest rates.
Interestingly can present also individual lookout of FOMC members on the state of the economy. At the hearing before Congress Yellen repeatedly underlined that not all representatives of the central bank’s share positive feedback about the current state of the local economy.
In view of the rather neutral approach to minutes, analysts FOMC expect next hawkish signals suggesting that the Fed is clearly coming to rate hikes. If this scenario comes true, then pairs with the dollar should see another wave of strengthening.
So far, apart from the appreciation against the euro, on the other pairs USD is not doing too well. The exception is presented above chart USD/CHF, where appreciation is seen on last 4 sessions in a row.