Sunday 16.12.2018 FX opening rates.
Good evening all and welcome to another exciting week in our company. I hope the weekend was as peaceful and restful as possible.
It’s pretty quiet, of course illiquid, at the open of the e-commerce markets tonight but enjoy the last few hours of calm before a whirlwind of data, CB’s and more buckets full of Brexit and trade of all kinds will come our way.
RBA minutes on Tuesday, FOMC on Wednesday, BOE and BOJ on Thursday rate decisions. The main one to be the Fed of course with several possible outcomes of which the 2 most plausible are a rate hike/caution or a no hike/relatively hawkish on current situation besides another 3 or 4. My base case is still they raise but signal a slower rate path slope. Just be cautious not running to blindly to many USD short. USD is still a high yielder in majors land.
BOE not expected to change anything as long as Brexit continues.
BOJ should keep the usual ” foot on the pedal” but it’s not the first time Kuroda surprised the markets in December. We know they’re studying very hard how to make the market understand that tapering is not changing monetary policy but sooner or later we may just hope they’ll be a little more specific. The longer they wait, the harder the trap will squeeze around their necks and making it impossible to find a decent way out. Not much more to expect though now the govt is putting extra stimuli in place.
There will be important data out, to start with EUR CPI tomorrow, the week going crescendo again with UK and Canadian CPI to follow on Wednesday and many more goodies coming our way in between and after.
Here are the rates