The Fed's hawkish stance surprised the market, leading to gains in the USD market in the second half of the week. The market's attention is now focused on the BoE, RBA and SNB decisions scheduled for next week. In addition, investors will also pay attention to the US retail sales and flash PMI readings for June. Be sure to watch AUDUSD, DE40 and GBPCHF in the coming week!
AUDUSD
The hawkish Fed influenced risk sentiment in the second half of this week. There is potential for more USD volatility next week, with the release of US retail sales data for May (Thursday, 12:30 PM GMT) and preliminary US PMIs for June (Friday, 1:45 PM GMT). AUDUSD is the pair to watch, as the Reserve Bank of Australia is expected to announce a policy decision on Tuesday at 4:30 AM GMT. Money markets are pricing in a greater than 30% chance of a 25 basis point rate cut by the RBA.
Start investing today or test a free demo
Open real account TRY DEMO Download mobile app Download mobile appDE40
The DE40, as well as other European stock indices, may see more volatility on Friday, when preliminary PMIs for June will be released. As usual, the markets' attention will focus primarily on the data from France and Germany, at 7:15 AM GMT and 7:30 AM GMT respectively. Economists expect a slight improvement in the industrial and services indicators, although the manufacturing sector is still expected to remain in the downward zone. DE40 fell to its lowest level in more than a month after post-election political uncertainty in the EU and a hawkish Fed weighed on sentiment.
GBPCHF
GBPCHF is a pair that could see more volatility on Thursday, as the Swiss National Bank and the Bank of England will announce interest rate decisions at 8 AM GMT and 11 AM GMT respectively. The Bank of England is expected to keep interest rates unchanged, while the SNB will make its second consecutive rate cut of 25 basis points. In addition to the central banks' decisions, the GBPCHF may also see some movement in response to the UK CPI report for May (Wednesday, 6:00 AM GMT) and UK retail sales data for May (Friday, 6:00 AM GMT).
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
