Your Weekly Fundamental View (Apr 24–28)

April 24, 2017 14:17

Need to know

The main focus of this week is on JPY and EUR. The BOJ (Bank of Japan) will decide the overnight rate followed by a rate statement. This event should bring volatility to JPY currency basket. Let's take a look at the important fundamentals events this week. The BOJ is expected to leave the rate unchanged. Similarly, the ECB will decide on a minimum bid rate which is expected to be unchanged.

Coming up

USD CB Consumer Confidence is due on Tuesday, 25 April.

The data represents a level of a composite index based on surveyed households.

Why should you care? Financial confidence is a leading indicator of consumer spending

AUD CPI is released on Wednesday, 26 April.

The report measures a change in the price of goods and services purchased by the consumer.

Why should you care? This could be one of the AUD's most important inflation data because it's used as the central bank's inflation target.

USD Crude Oil Inventories are due on Wednesday, 26 April.

A build-up in crude oil inventories usually signals decreasing demand from refiners. On the other hand, a drop would signal that refiners are still producing at elevated levels and the inventory overhang in oil products could continue.

Why should you care? This is primarily a US indicator, but it also affects CAD due to Canada's huge energy sector.

USD Unemployment Claims are released on Thursday, 27 April.

These claims are the earliest national economic data, representing the number of individuals who filed for insurance for the first time during the past week. If the actual result comes weaker than the forecast, it could be deemed good for the currency.

Why should you care? The number of unemployed people is an important signal of the overall economic health and could hint at future monetary policy steps.

JPY Interest Rate Decision will be announced on Thursday, 27 April.

Source: Historical BOJ rate decisions

Rate decision is usually priced in the market so it tends to be overshadowed by a statement that follows the decision.

Why should you care? The statement contains the outcome of their decision on asset purchases and commentary about the economic conditions that influenced their decision. Volatility of all JPY crosses could be high. It has an effect on Nikkei index too.

ECB Minimum Bid Rate Decision is released on Thursday, 27 April.

Source: Historical ECB rate decisions

We assume that the short term interest rates are the paramount factor in currency valuation. The rate decision is usually priced in the market and tends to be overshadowed by an ECB presser.

Why should you care? Traders might exploit short term volatility to trade the spike after the rate decision and press conference. EUR basket is affected. Additionally, the investors look at most other indicators merely to predict how rates will change in the future.

CAD and USD GDP are out on Friday, 28 April.

The GDP and Advance GDP are important measure of economic activities.

Why should you care? The data tends to be the gauge of economic health and might create a spike in the price of both USD and CAD currencies after the are released.