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The Most Important Central Bank Releases This Week
Although the ECB, BOE, and BOJ all have scheduled communications this week, the biggest market movers are almost certainly going to be the Fed and the BOC. ECB speakers Cœuré and Constancio are likely to further signal that any effort to taper asset purchases will be gradual and designed to avoid tightening financial conditions. The BOE’s Credit Conditions Survey and Review will likely both score a bit dovish, even as pressure mounts to hike rates due to rising inflation. The BOJ’s Regional Economic Report will likely score hawkish, helping to lift BOJ sentiment back toward neutral.
Fed policymakers are going to be very active this week, with seven scheduled speeches plus Yellen’s testimony before both the House and Senate. Yellen and the various other speakers are going to need to provide the markets with more hawkish signals if they intend to justify the push to unwind the balance sheet. Similar to the Fed, the BOC appears ready to engage in a hawkish policy change for the first time in 7 years. BOC trend has risen significantly over the last two months, suggesting the bank is poised for a rate hike this week. Nevertheless, fundamental economic data—especially inflation—remains soft, so the BOC may elect to hold rates and hike later in 2017. Prattle data suggests a hike is more likely than a hold, but, given the soft economic data, this is far from certain.
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The Prattle Team