FOMC Rate Decision: Dominant Focus Next Week
Next week promises to be a significant one for financial markets as the Federal Open Market Committee (FOMC) is set to announce its decision on the federal funds rate. The outcome of this decision will have far-reaching implications for the global economy, impacting everything from interest rates to stock market performance.
Key Economic Indicators to Watch
Throughout the week, there will be a number of key economic indicators released that will provide valuable insights into the state of the global economy. On Monday, the US Empire State Manufacturing Index will be announced, with a forecast of -4.1, slightly better than the previous -4.70.
On Tuesday, attention will shift to Germany with the release of the ZEW Economic Sentiment index, which is expected to come in at 17.2, down from the previous figure of 19.2. In Canada, the Consumer Price Index (CPI) for the month is expected to show a slight increase of 0.1%, compared to the previous month’s 0.4%.
The US will also release data on core retail sales and retail sales for the month, with forecasts of 0.2% and -0.2% respectively. These numbers will be closely watched by investors and analysts for signs of consumer confidence and spending patterns.
Wednesday’s Highlights
Wednesday will bring more economic data, starting with the UK’s Consumer Price Index (CPI) year-on-year figure, which is expected to remain steady at 2.2%. In the US, Building Permits data will be released, with a forecast of 1.41 million, slightly higher than the previous month’s 1.40 million.
The most anticipated event of the day will be the FOMC’s announcement on the federal funds rate. The market is expecting a cut to 5.25%, down from the current rate of 5.50%. Following the rate decision, Federal Reserve Chairman Jerome Powell will hold a press conference to provide further insights into the committee’s decision-making process.
Later in the day, New Zealand will release its Gross Domestic Product (GDP) quarter-on-quarter figure, with a forecast of -0.4%, a significant drop from the previous quarter’s +0.2%. Australia will also release employment data, with forecasts of 25.8K new jobs created and an unchanged unemployment rate of 4.2%.
Thursday and Friday’s Events
On Thursday, the Bank of England will announce its interest rate decision, with expectations of it remaining unchanged at 5.00%. The US will release data on unemployment claims, the Philly Fed Manufacturing Index, and existing home sales.
Friday will see the Bank of Japan’s policy rate decision, with expectations of it remaining below 0.25%. Bank of Canada Governor Tiff Macklem will speak, and data on core retail sales and overall retail sales in Canada will be released. European Central Bank President Christine Lagarde and Federal Reserve Bank of Philadelphia President Patrick Harker will also speak on Friday.
In conclusion, next week will be a busy one for investors and analysts, with a range of economic indicators and central bank decisions set to shape market sentiment and direction. Stay tuned for updates and analysis as events unfold.
