A week not to miss

We are in the midst of the holiday season, aren’t we? Well a look at the calendar for this week makes us doubt that. And what is more, those events that we preview here might be no less relevant and impactful than any other month of the year.

The FOMC (Wednesday) – a logic tells us nothing should happen here (by nothing + the Fed we understand moves up to 100 pips); but this is the Fed and their maneuvering of market expectations (see the text on the next page) so you never know; Bullard’s speech (Friday) only makes things more interesting

The Bank of England (Thursday) – there should be a formal guidance with the unemployment rate of 6,5% as a target one; but there could be more; the doves dropped their calls for more bond purchases last month in exchange for the (Carney’s) promise to look for other tools; should the MPC suggest those (let alone introduce) expect the GBP to plummet

The ECB (Thursday) – we are just one month after the meeting when the „extended period” pledge was introduced and Mario Draghi will be confronted with extraordinary PMI releases. We think he is smart enough to maneuver around them as any hawkish comment could quickly erase the gains from the pledge; at the end of the day, with the ED relatively high, the conference could end up even the USD positive

The US data – GDP, labor market – the GDP (Wednesday) will be weak but the market seems to be ready for it and in fact there is a chance for an above the consensus report since durables increased by 13% q/q in Q2; there is nothing suggesting a slowdown on the labor market so the payrolls report (Friday) may exceed a consensus of +185k as well which would be the dollar positive ‘

This is just the top of the list. Under normal circumstances reports like the US ISM, US Conference Board, UK PMI, Chinese official PMI would attract a lot of attention as well. This time these will make up just for a background, along with the earnings season featuring names like BP, Merck or ExxonM. Get ready for a hot week.