Although the main event of the session is undoubtedly a summary of the December meeting of the Federal Reserve and publication of the minutes of the FOMC from midday markets will know quite a number of interesting data directly from the Old Continent. Undoubtedly, they can have an impact on quotation of EUR – at least in the short term.
Festival of PMI and Eurozone inflation
Starting from 09:00 market will start to receive information about national results of the PMI service and the overall PMI index for the largest euro area economies. At 10:00 will be published total result while at 10:30 will be a separate report for the British market (along with data about credit and money supply M4).
Another important data from Europe will be published at 11:00 and will cover the December forecast consumer inflation (CPI). Analysts expect the growth rate in terms of yoy from 0.6% to 1.0%.
Before us a weak predictor of NFP?
At the beginning of US session eyes of investors will focus on the ADP report regarding private employment in the United States. According to the forecasts for December should be at level of 173,000 (after the November reading 216,000).
For a large part of investors Wednesday’s ADP is a predictor before Friday’s NFP publication. Weaker reading could convince investors about the fact that the jobs report on January 6, 2017 also will not be within positive
EUR/USD in anticipation of Wednesday’s series data as yet quiet. The session moves in less than 40 pips range:
What to look for in the minutes of the FOMC?
The icing on the cake of Wednesday’s trading will of course be the FOMC minutes released at 20:00, which will summarize again the December meeting of the Fed – the same, during which it was decided to raise interest rates.
What should we look for in those minutes ? First of all, the discussion on potential changes in monetary policy in connection with the New Year’s change in the board of the Fed and the arguments that have been used to support rate hike decision by 25 basis points (which took place for the second time in 10 years).
Although the market picked up the December FOMC decisions as strongly hawkish Janet Yellen during a press conference tried to give whole rather dovish nature – stressed that much depends all the time on a rather uncertain fiscal outlook.
If a similar tone occurs in the protocols, then we will see decline of at least part of the supply pressure from a number of significant instruments. This refers, among other things to gold, which in recent declines was more dynamic:
From the statistics it is one of the best times for a rebound on gold. As reported in previous text, XAU/USD had strongest gains in January and February.
