Your Weekly Fundamental View (Dec 19-23)

December 19, 2016 14:30

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Need to know

This week's main focus is on the Bank of Japan's (BOJ) monetary policy statement. There will also be a press conference and an interest rate announcement.

Coming up

Australian monetary policy meeting minutes comes out on Tuesday, 20 December.

The Reserve Bank of Australia (RBA) will release the notes of its most recent meeting two weeks after the Cash Rate is announced.

Why should you care? The meeting details provide extra information regarding the economic development and the Reserve Bank's views on the monetary policy and interest rates.

BOJ rate, statement and conference is coming up on Tuesday, 20 December.

The Bank of Japan (BOJ) policy rate is currently at -0.10% and it is expected to stay the same after the rate decision(*).

Why should you care? Interest rate decisions are a key factor in determining the value of a currency. The statement and press conference will provide traders with extra information and commentary on the BOJ's views on the economy, outlook, and future vote.

IR boj.pngSource: BOJ Interest Rate Decision.

Crude oil inventories are released on Wednesday, 21 December.

A buildup in crude oil inventories usually signals decreasing demand from refiners. On the other hand, a drop would signal that refiners are still producing at elevated levels and the inventory overhang in oil products could continue. This is primarily a US indicator, but it also affects CAD due to Canada's huge energy sector. Previous data showed a decrease of 2.6m barrels(*).

Why should you care? The price of petroleum products influences inflation, which impacts oil-dependent industries.

NZD GDP is out on Wednesday, 21 December.

GDP is the broadest measure of economic activity and the primary method of measuring the economy's health. The previous figure was 0.9%(*).

Why should you care? If the actual result comes out better than predicted, the NZD could bounce. The opposite is true if the result comes out worse than expected.

US final GDP q/q are out on Thursday, 22 December.

GDP is the broadest measure of economic activity and the primary method of measuring the economy's health. Today's figure is the final version which measures quarter on quarter changes 85 days after the quarter ends. The previous figure was 1.4%, and the forecasted number for this quarter on quarter is 3.2%(*).

Why should you care? If the actual number exceeds the forecast, it is deemed good for the currency. If the report comes worse than expected, the USD might initially drop.

Christmas holiday on Sunday, 25 December.

Most banks and brokers in the US, Canada, Australia, New Zealand, UK, Germany, France, Italy, Switzerland and some other countries are closed.

Why should you care? Banks facilitate the foreign exchange volume, which means that the market is either not accessible or in any case less liquid.

(*) Admiral Markets Calendar