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Weekly Forex Outlook: March 16 – 20

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This week has a heavy economic calendar and promises to inundate traders with a plethora of macro-economic data. The dominant events of this week agenda are the policy meetings from three of the world’s major banks, Fed, BoJ and SNB. Moreover, Inflation Rate in Eurozone will be closely eyed by market participants.

Today, is quiet day in Europe, where the most notable event is the release of the German Buba Monthly Report of Deutsche Bundesbank, which contains statistical tables, speeches and analysis of current and future economic conditions from the bank’s viewpoint. Later in the day, investors will be also watching for a speech from ECB President Mario Draghi, after the ECB launched its massive stimulus program which will pump 60 billion euros a month into the euro zone economy.

The releases in US would give further insight into the housing sector performance. The National Association of Home Builders releases Housing Market Index for February forecasted to increase slightly to 56 from 55 in January, being above 40 from mid-2012. The Industrial Production for February is also coming out, expected to accelerate slightly to 0.3% from 0.2% in January. In addition, the US Department of Treasury will release the Net Long-Term TIC (Treasury International al Capital) Flows for January.

Tomorrow, early in the morning, Reserve Bank of Australia and Bank of Japan release their Monetary Policy Minutes and Statements respectively. After the release, BoJ governor, Haruhiko Kuroda, will have a press Conference.

In the Eurozone, final CPI for February, will attract the trader’s attention, forecasted to remain unchanged and negative at -0.3%, on a yearly basis. Traders would also keep a tab on the yearly Employment Change release for Q4, which is expected to drop slightly to 0.1% from 0.2% last quarter.

We can consider, equally important, the German and European ZEW Survey for March. The ZEW survey, which measures economic sentiment of institutional investors and analysts, is a fairly reliable indicator of future patterns. Both the Current Situation and Expectations indices for Germany are expected to increase, as well as the Economic Expectation for Eurozone.

In the US, following Monday’s NAHB and Industrial Production announcements, Building Permits and Housing Starts releases will add to the greater picture of Housing market outlook. The market expects Building permits to increase a little to 1.07M from 1.06M in January and Housing Starts to decrease slightly to 1.05M from 1.07M.

On Wednesday, we start the day with British news. Investors will wait for the release of BoE minutes. We expect the MPC to vote unanimously to keep rates on hold at its March meeting. Traders expect no major change in the voting pattern despite the robust growth of UK economy. Unemployment Rate and Claimant Count Change for February are also due, both expected to slightly decrease to 5.6% from 5.7% and -30.0K from -38.6K respectively. Since, the time of the release, is at the same time with the employment data, this may trigger some volatility for the GBP. Numbers like that will help boost confidence in the UK economy.

In the afternoon, Fed is going to hog the limelight. The optimistic results released last week, showing that the U.S. economy is at a steady strengthening period encouraging Central Bank to raise the interest rates sooner than expected. However, Wednesday’s Interest Rate Decision and the FOMC meeting will keep the traders cautious. Interest Rate Decision announcement will be followed by Fed’s Monetary Policy Statement and a press conference.

In Switzerland, the ZEW Survey for expectations in March is coming out ahead of the SNB policy meeting due on Thursday.

Later in the day, the New Zealand’s GDP reading for the fourth quarter may affect the NZD cross currency pairs. The New Zealand economy expected to expand by 0.8% from 1.0% last quarter.

The first key event of Thursday is the Interest Rate Decision of the Swiss National Bank. Behind the crucial events (Black Thursday) had happened in January the market expects the interest rate to remain unchanged at -0.75%.

The other key event is coming from the European Central Bank. Two weeks after Governing Council meeting, ECB publishes the Economic Bulletin Report and the Targeted LTRO (Long-Term Refinancing Operation). The European Central Bank will lend banks cash for lending it to companies and people. Back in September 2014, the bank has lent 82.6 billion euros, and three months later 129.8 billion euros. However, in both cases they were far lower than market expectations.

From the US, we get the Philadelphia Fed Manufacturing Survey for March. Expectations are for 7.3, increasing from its previous level of 5.2; while not market affecting, should be worth looking at it. It is worth to mention that the weekly indicators about the Jobless claims in US are also to be released.

Late in the night, Bank of Japan Monetary Policy Meeting Minutes will keep the attention in the Asian trading session. Early on Friday, Reserve Bank of Australia’s Governor Glenn Stevens gives a speech. It will be interesting to see if it makes any comments on the recent AUD depreciation, as well as the decline in inflation (1.7% yoy).

During the European day, the Canadian releases may have an effect on the movement of the USDCAD and EURCAD pairs. The Inflation Rate for February expected to accelerate by 0.9% from 1.0% on a yearly basis and the Retail Sales for January expected to improve by -0.3% from -2.0% the previous month.

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