Central Bank

Harris replacing Biden may not be a radical overhaul where policies are concerned, but it has certainly brought the Democrat’s prospects for maintaining power back from the brink of death. From a market perspective, it means Trump is no longer a ‘walk in’ President, and political headlines from the US are no longer driving sentiment for now. Thankfully, we have intertest rate decisions from the FOMC, BOE and BOJ to drive sentiment, along with NFP and Australia’s CPI report for good measure.

Traders will keep a close eye on the outcome of the second round of the French elections at the Asian open next week, as it could have a direct impact on European markets. Given that the far right failed to secure a majority government, there are upside risks for the euro if they do not perform as well as currently expected. Jerome Powell will also address the Senate Banking Committee ahead of a key inflation report next week. Both events have the potential to shape policy expectations for 2025. NZ dollar traders should closely monitor the RBNZ meeting to see if they maintain the hawkish stance that surprised markets in their prior meeting.

Concerns that headline employment figures could be lagging a worse picture alongside a lack of updated service inflation figures prompted the RBA to hold rates in June. And that makes the quarterly CPI report in a few weeks all the more important.

Futures traders may be heavily net-short Swiss Francs, but the rapid rise of the currency this week ahead of the SNB meeting suggests some are wary of being caught short a less-dovish central bank.

Traders are clearly keeping a close eye on the 158 handle after USD/JPY spiked up to it. Note that we're yet to see a daily close above 158 since late April, which landed one day before the MOF first intervened this year.

For the first week in a while, US data is not dominating the market focus. With a key US inflation report and FOMC meeting freshly in the rear-view mirror, markets can now shift attention to domestic data. Three top-tier central banks meet next week, including the RBA on Tuesday, followed by the Swiss National Bank (SNB) and Bank of England (BOE) on Thursday. UK inflation data on Wednesday could set the tone for what to expect at future BOE meetings. Flash PMIs across Asia, Europe, and the US then close out the week, which can shape expectations for future growth and inflationary pressures.

With a key US inflation report being delivered less than six hours ahead of an FOMC meeting, it leaves plenty of potential for volatile swings leading into the headline event of the week. The Bank of Japan also announce their monetary policy decision, which puts USD/JPY onto the radar for currency traders.

AUD/USD could be susceptible to movement from minutes of the recent FOMC and RBA meetings. But with Australian unemployment data hitting a three-year high, a softer set of wage figures could bring forward bets of a rate cut.

We have a busy calendar with what would usually be ‘red flag’ days, including central bank meetings with the FOMC, BOJ and BOE. There’s a reasonable chance we’ll see no action across all three, but the bigger response for global markets could be if the BOJ widen or abandon their yield curve control (YCC).

The hawkish tone of the RBA’s October monetary policy minutes has caught markets by surprise, seeing the AUD pop higher against the USD and crosses.

NZD/USD's break above 60c ahead of the RBNZ's announced that they held rates at 5.5% again was shortly lived, and momentum has turned decisively lower. Ans there could be further downside to come.

At the most basic level the Fed delivered what was expected; another policy pause with the potential for further hikes. The opening paragraph tipped noted an economy which is “expanding at a solid pace” with a slower but “strong” job growth and elevated inflation. There’s nothing remotely dovish there. And then we look at the numbers…

The US dollar rises as the Fed still expects another rate hike and only two rate cuts next year

With an ECB interest rate decision and three US data points sandwiched in between, we could be in for an interest hour's trade on EUR/USD. And that likely explains why the 1-day implied volatility band is more than twice its 20-day average.

Money supply is directly controlled by central banks of influential countries around the world. Learn how they decrease and increase money supply in this article.

The RBNZ held their cash rate steady for the first time following 12 consecutive hikes, whilst AUD/USD broke above its 200-day MA ahead of a key US inflation report.

Key inflation reports for Canada and Australia will be released over the next 24 hours which could have a direct impact on interest rate decisions for the BOC and RBA.