This week (from the 1st to the 5th of May) will be very interesting for the market. We have not seen a week so full of events for a long time.
The most important market mover is definitely the Federal Reserve’s meeting on Wednesday the 3rd, when the central bank will announce its decision on the interest rates and the FOMC will subsequently publish a report at the end of the meeting. Analysts do not expect any change even if after raising the interest rates by a quarterly percentage point at the last March meeting, Fed members expect another two interest rate increases by the end of the year.
Recent data under expectations of domestic growth (+0,7% vs. +1,2% expected), inflation and retail sales have strengthened the idea that US economy slowed down in the first quarter, even Federal Reserve’s officers probably would prefer to talk about statistical fluctuations.
On the same day, will be published a preliminary estimate of GDP Eurozone for the first quarter of 2017. After the first round of elections in France, the Eurozone returns to the macroeconomic front with the publication of the preliminary estimate of GDP for the first quarter of 2017.
Analysts estimate a quarterly growth of 0,5% and a steady rise of 1,7% over the previous year.
Last week, as predicted by the market, the European Central Bank announced to keep its interest rates and deposit rates unchanged, along with the monthly Quantitative Easing volume purchases.
The reference interest rate is unchanged at 0,00%; the interest rate on deposits is unchanged and remain in negative territory at -0,40%; the amount of purchases on QE are unchanged at 60 billion euros per month.
The ECB’s meeting of 27 April took place between the first and second rounds of the forthcoming French elections.
During the press conference, the Governor of the European Central Bank, Mario Draghi, said the risks for economic growth have fallen and the economy is now approaching a balance situation that will give a strong boost to the European currency.
On Friday, May 5, there will be the publication of another important market mover of the week, namely Non-Farm Payrolls, the new jobs added in the US economy in the month of April.
Analysts expect a strong result for April figure, an increase of 180.000 new jobs, against the 98.000 registered in March.
The expected unemployment rate should increase slightly from 4,5% to 4,6%, while the average hourly wage is estimated to increase by 0,3%, against the + 0,2% published in March.
Regarding monetary policy, next week there will be another central bank who will have to take a decision on interest rate, the Central Bank of Australia (RBA). The market expects membership defensive statements.
A week full of operational ideas in the Forex market is expected, though caution is still to be expected in the run-up to Sunday’s 7 May in France when we will know the name of the next President of France between Emmanuel Macron and Marine Le Pen.