USD: Yellen’s Last Hurrah At The Fed

GBP – Time for Trade

EU officials last week emphasised the unlikelihood of having a trade agreement in place by March 19. Over the weekend we had retaliating comments from David Davis, the man in charge of negotiations. He stated on BBC that the sum of money agreed in the porce bill, will only be handed over if a trade agreement is met. This may heighten tensions ahead of the EU summit this week where the 28 member states will vote on a formal agreement over Brexit.

Monday is a quiet day for data however the week ahead is action packed. It’s all about inflation and jobs, whether the recent rate hike and the uptick in the pound, has tamed inflation month on month. Mark Carney may be biting his finger nails ahead of this reading as an increase will certainly echo concerns over the central banks ability to control inflation. There is recipe for the pound to have a very turbulent week.

USD – Yellen’s last hurrah!

This week we have the US Federal Reserve interest rate meeting and Janet Yellen’s final one as chair. Will she go out with a bang?

Friday’s stronger than expected job numbers have certainly tee’d up a rate hike this week. The market has heavily priced this in now and recent comments from Yellen and the new chair Powell, have done little to sway this expectation. Focus will be on the comments in the FOMC minutes over low inflation concerns and the future economic outlook. As it’s Janet Yellen’s last meeting, there maybe more honest comments on inflation to come from her.

EUR – Poland’s version of Brexit?

When the markets close on a Friday evening, we pay extra attention to the weekend news. In Poland, their continued attempts to take a broadly anti-EU stance were boosted by Polish law makers overhauling the judiciary system, giving de facto control to the selection of judges. Poland will also get a new Prime Minister next week but the majority of the power will still rest with the party’s authoritarian leader, Jaroslaw Kaczynski.

The ECB are set to reveal their 2020 inflation forecasts this week which will be used as a measuring stick against plans to withdraw money stimulus. The market expects a very slow growth curve on the price of goods across the Eurozone. This has been supported by the current and cautious QE withdrawal. In October we saw the plan to reduce QE by 50% be pushed from January to September 2018. This allowed for further open ended remodelling should they require it. This continues to press home the cautious nature of Euro traders and investors.

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