Upside surprise in US CPI data for August triggered a sell-off on the global stock markets as hawkish Fed bets increased. We will get to know what Fed's response is this Wednesday at 7:00 pm BST. However, rate decisions from the Bank of England and Bank of Japan will also draw attention, and so will flash PMIs for September from Europe. Be sure to watch EURUSD, DE30 and GBPJPY next week!
EURUSD
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Open account Try demo Download mobile app Download mobile appFOMC rate decision is a key event of the week. A 75 bp rate hike looked certain but after dismal CPI reading for August, market started to price in a possibility of 100 bp rate move, providing more fuel for the USD rally. We will see whether those expectations are met on Wednesday, 7:00 pm BST. The meeting will be also closely watched as a new set of economic forecasts will be provided, including a dot-chart. EURUSD continues to trade near parity levels but a strong hawkish message from Fed could trigger another leg low.
DE30
While central banks will draw the most attention this week, release of flash PMI indices for September may also trigger a jump in volatility. Manufacturing and services indices are expected to deteriorate compared to August releases and weaker-than-expected print could give more fuel for DE30 bulls. As usual, focus in Europe will be primarily on releases from France (Friday, 8:15 am BST) and Germany (8:30 am BST).
GBPJPY
Fed is not the only major central bank scheduled to announce a monetary policy decision next week. Investors will also hear from the Bank of England and Bank of Japan, both decisions on Thursday. The former is expected to deliver a 50 bp rate hike while the latter is expected to remain on hold. However, traders will look for comments on the FX rate from BoJ as yen continues to plunge amid lack of action from the central bank. The question is whether comments alone will allow JPY to regain its shine.
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