RBNZ, BOE Central bank decisions

This week was full of twists and turns. It started with the dollar getting stronger into midweek. Yellen spoke at the Economic Club in Washington on Wednesday and pretty much paved the way for the liftoff at the next Fed meeting.

On Thursday was ECB and Draghi's day and they disappointed with the expected stimulus. They cut the deposit facility rate to -0.3% from -0.2% and extended the QE to March 2017 from September 2016 but they did not increase the amount of bond buying as expected. To make matters worse, the FT released the wrong decision on a Tweet before the announcement, causing even more confusion and trading anxiety. On the disappointment and a continuous short squeeze, the EURUSD moved 4.3% from the low to the high and traded the largest trading range of the year.

Today, the US employment statistics were released along with OPECs decision to increase production (oh there was talk of a reduction of output on Thursday). The employment firmly solidified the liftoff as the number of new jobs increased by 211K (est 200K). The prior months were also revised higher by 35K and the unemployment rate remained steady at 5.0%.

With the final major economic piece of the puzzle in place for the fed, if there is not a hike, the 460 pip more on the ECB decision might be doubled.

So with this week more or less in the rear view mirror, what is on the docket for next week?

Here are some of the the highlights:

Tuesday:

  • AUD: NAB business confidence
  • China trade balance (est 64.15B vs 61.64B). Exports are expected to fall by 5.0% YoY (vs -6.9% last month). Imports are expected fall by -11.8% vs -18.8% last month
  • BOJ Kuroda speaks
  • UK manufacturing production (Est -0.1%)
  • Canada building permits MoM - Est +3.0% vs -6.7% last month and
  • BOC Poloz speaks. With employment and trade not too stellar today (although full time jobs was good) and oil prices at 40.00, will he be more concerned about the economy?

Wednesday:

  • China CPI YoY Est 1.4%
  • RBNZ rate decision. The NZD was one of the strongest currencies this week

Thursday:

  • Australia: Employment report (-10K vs +58.6K last month). Last month was a shocker at 58.6K. Will this month show a correction?
  • SNB rate decision and press conference. Always a chance for a surprise as the SNB continues to think the currency is way overvalued.
  • BOE rate announcement. No change expected
  • US employment claims. Then again do traders care. Employment is steady in the US

Friday:

  • US Retail Sales (Est +0.2%, Core +0.3%)
  • US PPI (est 0.0%)
  • Preliminary UoM Consumer sentiment (est 92.3 vs 91.3)