Giles Coghlan LLB, Lth, MA
Financial Source
This week presents several high-probability opportunities that I’m closely monitoring. Here are the four main events to watch:
Canadian CPI (Tuesday)
The Canadian CPI print is the main event for me. The Bank of Canada has expressed concern about the impact of higher interest rates on mortgage holders, with about 50% yet to remortgage. A significant miss in the CPI data could indicate potential interest rate cuts, leading to CAD downside. This is a substantial trading opportunity, as a miss could signal a more dovish Bank of Canada stance.
UK CPI (Wednesday)
The UK CPI print is crucial due to recent strong UK PMI and GDP data. Hawkish comments from previously neutral Bank of England members suggest economic resilience. However, a miss in the CPI data could weaken the pound, presenting a potential opportunity to short the pound. This event is pivotal as it could shift market sentiment significantly.
ECB rate decision (Thursday)
The ECB rate decision is another major focus. With rates at 3.75%, the ECB has less flexibility compared to other central banks. If the ECB signals a commitment to maintaining higher rates for longer, we could see euro strength, particularly against the pound. This decision will be pivotal for future policy directions.
New Zealand CPI (Wednesday)
Following the RBNZ’s recent dovish tilt, the New Zealand CPI print is critical. A miss in this data could lead to further Aussie/New Zealand dollar buying. Conversely, a higher-than-expected print could pull back some of the recent gains. This event is essential for understanding the RBNZ’s next steps and the resulting market movements.
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EUR/USD refocuses its attention to 1.1200 and above
Rising appetite for the risk-associated assets, the offered stance in the Greenback and Chinese stimulus all contributed to the resurgence of the upside momentum in EUR/USD, which managed to retest the 1.1190 zone on Thursday.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Bitcoin displays bullish signals amid supportive macroeconomic developments and growing institutional demand
Bitcoin (BTC) trades slightly up, around $64,000 on Thursday, following a rejection from the upper consolidation level of $64,700 the previous day. BTC’s price has been consolidating between $62,000 and $64,700 for the past week.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
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