Central Banks take center stage

FXStreet (Bali) - There will be a few central bank meetings and important data points this week, notes Franklin Wang, Strategist at Nomura.

Key Quotes


"In the US, Q1 GDP will be released on Wednesday. Adverse weather conditions, West Coast port disruptions, the stronger dollar and the fall in crude oil prices will all have likely hurt economic activity in Q1 2015; we expect headline Q1 GDP to grow by 1.0% qo-q SAAR with final sales increasing by only 0.1%. The FOMC meeting statement will be released on Wednesday and we expect an uneventful monetary policy statement. The employment cost index will be released on Thursday and we forecast a 0.7% q-o-q increase in total compensation in Q1. The ISM Manufacturing will be released on Friday; we expect a decline by 0.5pp to 51.0 in April."

"In Europe, UK GDP will be released on Tuesday and we expect 0.4% q-o-q. Eurozone CPI will be released on Thursday and we expect a decline of 0.1% y-o-y in April. The Riksbank will release its rate decision on Wednesday; our base case is a 10bp rate cut to -0.35% with a 60% probability. Additional government bond purchases are also likely (see SEK: Can Riksbank prevent foreign inflows? 24 April 2015)."

"Elsewhere in the world, the RBNZ will release its rate decision on Wednesday; we believe the Bank will keep its policy rate on hold and modify its statement to suggest that monetary policy may need to be kept accommodative for longer (see RBNZ Preview: Pushing NZD lower, 24 April 2015). The BOJ will release its policy statement on Wednesday too and we expect no change in policy."