SNB and BOE monetary policy decisions in focus
Good day, everyone! Hope you're all doing well as we look to get things going in the session ahead. It's been a lively start to the day as we see some movement in the aussie and yen - but this isn't a risk-related move!
The aussie is holding weaker after a mixed jobs report but all that does is just reaffirm the fact that a rate cut is most likely to come next in October and we're seeing markets start to rush to price that in at the moment.
Meanwhile, the yen is firmer as the BOJ once again failed to offer any signals that it is going to ease monetary policy any time soon.
It's one of those "bend until it breaks" reaction as markets to feel a bit more at ease to bid up the yen (bend) in light of global macro trends until the BOJ decides to step in (break).
Looking ahead, we may be in for a surprise later today with the SNB possibly announcing a rate cut even though expectations are for the central bank to stay on hold. So, keep an eye out for that just in case.
Otherwise, markets should see more calm as traders continue to digest the Fed decision yesterday which offered little to the imagination.
Powell's emphasis whereby every meeting should be "live" offered no sense of a massive push back against market pricing, so now traders will have to wait on the next big event to skew the October odds on either side - currently ~56% odds of unchanged (nearly 50-50).
0600 GMT - Switzerland August trade balance data
Prior release can be found here. General indication of trade conditions in the Swiss economy, a minor data point.
0730 GMT - SNB announces September monetary policy decision
Prior decision can be found here. Expectation is for the SNB to stand pat at this meeting but this is where they could potentially spring a surprise and get markets off their back with regards to franc strength. With the ECB already committing to stimulus measures last week, it could be a matter of time before the SNB needs to step in and they may yet do so today. The franc hasn't been overwhelmingly strong since the ECB decision (EUR/CHF ~1.10) so that may give them some breathing room to not act today but is prevention better than cure? We'll have to wait and see.
0800 GMT - Eurozone July current account balance
Prior release can be found here. General indication of flows in/out of the Eurozone economy. Not a release that will move markets whatsoever at this current point in time.
0830 GMT - UK August retail sales data
Prior release can be found here. Consumption activity is expected to be more flat/tepid in August as the summer time boost starts to wear off. Nonetheless, the data here will do little to convince of any significant shift in Brexit/BOE pricing so don't expect it to have a lasting effect on the pound. If anything else, a boost here may point towards the UK avoiding a technical recession for this year at least.
1100 GMT - BOE announces September monetary policy decision
Prior decision can be found here. With Brexit uncertainty still prevailing, don't expect much fireworks from the BOE today (no change expected). If anything else, just watch for whether or not they will keep their "gradual and limited tightening" bias but otherwise most - if not the entirety - of their statement will be somewhat similar to that of August.
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading!
