How Central Bank Meetings, Minutes Will Move Markets This Week

  • Monday, July 3, 2017

Prattle’s Macrocast is a data-driven research report providing analysis and forecasting on upcoming central bank releases. Sign up for a free 30-day Prattle trial to receive the full Macrocast weekly.

The Most Important Central Bank Releases This Week
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While last week was dominated by ECB, BOE, and BOC rhetoric, this week promises to be much more focused on the RBA and Riksbank policy meetings and Fed minutes. The Fed minutes are likely to provide a significant glimpse into how, and perhaps even when, the Committee intends to begin unwinding the balance sheet. The RBA and Riksbank are both likely to hold rates and edge slightly more hawkish. For the RBA, this may mean signalling a future rate hike, while for the Riksbank it could mean not signalling further stimulus.

After confusion about remarks from Mario Draghi last week, ECB officials will likely continue to clarify that the bank does not intend to tighten policy as long as it poses a risk to financial conditions. BOE officials do not have any scheduled speeches to clarify Mark Carney’s remarks from last week, but the record of the FPC meeting will likely reflect concerns about both upside risks of rising inflation and downside risks due to Brexit. Given the asymmetry of the policy tools at the BOE’s disposal—tightening is much easier than loosening at this point—the bank appears poised to stay the course and, like the ECB, will only tighten when it is unlikely to adversely impact financial conditions.

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The Prattle Team

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