10:36 June 17, 2023
The meetings of the central banks Fed, ECB and BoJ are over, but the decision-making marathon of the central banks in June is not yet over! In the next week! On Thursday, investors will have an opportunity to hear from the Bank of England and the Swiss National Bank, while Fed Chair Powell will address Congress on Wednesday and Thursday for his semi-annual hearing. Finally, the preliminary PMI indices from Europe will be released on Friday. Watch for GOLD, DE30 and GBPCHF in the upcoming trading week.
GOLD
The US Federal Reserve left interest rates unchanged last week for the first time in 15 months. However, the dot plot proved very hawkish, with the median suggesting two more rate hikes of 25 basis points this year, prompting a pullback on the gold market led. Fed Chairman Powell will appear before Congress for his semi-annual hearing on Wednesday and Thursday next week. While his statements are likely to echo his views from the post-meeting press conference, his responses to lawmakers’ questions could still add to volatility.
DAX / DE30
A new set of preliminary PMI indices from Europe will be released this week, based on European indices such as the DAX could affect. June poll data will be released on Friday morning, with German and French readings getting the most attention at 11:15 am and 11:30 am GMT respectively. No major deviations from May readings are expected – manufacturing indicators are likely to remain on a downward trend, while data for services continue to point to expansion in the sector.
GBPCHF
The forex pair GBPCHF is one of the forex pairs likely to see increased volatility on Thursday 22nd June. This is due to the fact that both the Swiss National Bank and the Bank of England will announce their interest rate decisions. The SNB will announce its decision at 11:30 a.m. German time and is expected to raise interest rates by 50 basis points. The BoE is due to announce its decision at 15:00 GMT and is also likely to hike rates, but only by 25 basis points. However, the SNB could take a dovish stance as some say a rate hike of just 25 basis points makes sense. Meanwhile, the Bank of England is expected to hike rates by 125 basis points by the end of the year.
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