Things are looking calm to start the new week but they will certainly pick up in the days ahead.
The focus this week is on major central banks with the biggest of names on the agenda. Here's a look see:
- Fed to be more hawkish in their language? Potentially line up quicker tapering/rate hikes?
- ECB to keep 'transitory' language? Any guidance on APP purchases for next year?
- BOE to hike rates this time around?
- SNB.. Meh
I'd argue the Fed and BOE are the two more interesting ones. The former in terms of language and taper direction. The latter in terms of its decision on whether or not to raise the bank rate.
As for the ECB, perhaps they might get around to introducing a loose commitment to bolster bond purchases. But we'll see.
And I don't even need to mention much on the SNB. We all know where they are at.
Despite the threat of a more hawkish Fed, equities have been remarkably resilient and that speaks volumes to dip buyers' appetite.
Elsewhere, major currencies appear "trapped" awaiting further direction in general. So, expect the central bank decisions above to provide some idea on trading direction later in the week.
Besides that, don't forget about the PBOC after they pushed back against yuan strength last week. That is seeing USD/CNY just above 6.35 for now but it is worth keeping an eye out in case.
