FED SPEAKERS DRAW ATTENTION ON MONDAY
A series of economic data and monetary policy events will headline the financial markets on Monday. Chief among them are a series of Federal Reserve speakers, who could shed light on the future of U.S monetary policy.
The economic calendar begins in Europe with a report on German factory orders scheduled for 06:00 GMT. Orders for manufactured goods are forecast to rise 0.7% in March, following a 0.3% gain the month before.
At 07:15 GMT, the Swiss government will report on consumer inflation for the month of April. The consumer price index (CPI) is projected to rise 0.2% from the previous month and 0.8% annually.
Later in the morning, Sentix will report on euro-wide investor confidence. The monthly report is expected to show a solid increase in the investor confidence index for the month of May.
Shifting gears to North America, Federal Open Market Committee (FOMC) members Thomas Barkin and Robert Kaplan will deliver speeches at 18:00 GMT and 19:30 GMT, respectively. Both officials were part of last week’s FOMC meeting, which resulted in the Fed leaving interest rates on hold.
Federal Reserve Bank of Chicago President, Charles Evans, is also scheduled to deliver a speech at 19:30 GMT.
The Fed is widely expected to raise its benchmark interest rate when it meets in June. The June policy decision will be accompanied by quarterly projections covering GDP, unemployment and inflation, as well as officials’ forecast for interest rates over the next three years.
North of the border, Bank of Canada Deputy Governor, Timothy Lane, is also scheduled to deliver a speech at 19:00 GMT.
In terms of economic data, the Federal Reserve will report on consumer credit change at 19:00 GMT. Consumer credit is forecast to rise $16.5 billion in March, compared with a $10.6 billion gain the month before.
Europe’s common currency traded slightly higher on Monday but remained well below the psychological 1.2000 barrier. At the time of writing, EUR/USD was trading at 1.1971 for a gain of 0.1%. Above the intermediate resistance, the bulls are likely to run into challenges around 1.2030.
The Swiss franc continues to trade near parity against the dollar, with prices hovering just below 1.000. At the time of writing, USD/CHF was trading at 0.9995. The pair has gained 400 pips over the last month as momentum returned to the greenback. Swiss CPI data and US Fed speeches on Monday could impact the direction of this pair.
After challenging the 110.00 level last week, USD/JPY has succumbed to bearish pressure, with prices falling back below 109.00. At present, USD/JPY is trading at 108.77, having declined 0.3%. The pair is holding on to a critical support near 108.73, which corresponds with the 100-day SMA.