The Federal Reserve cut rates earlier on Sunday, in a coordinated move with other central banks to reduce rates to 0.25%. Looking ahead, the UK and Australia will release key employment reports, while the eurozone and Germany will publish inflation numbers.
The coronavirus continues to spread, leaving much of Western Europe under lockdown. This has paralyzed much of the eurozone economy, with the U.S. declaring a national emergency and banning flights from Europe. The U.S. dollar sparkled last week, posting broad gains as jittery investors sought the safety of the greenback at a time of a global financial crisis. The British and Canadian central banks cut rates by 50 basis points last week, sending the pound and Canadian dollar lower. However, the ECB did not follow the lead of the Federal Reserve and maintained interest rates at a flat 0.00%. The bank did unveil a financial relief package. This included cheap loans to banks, in order to increase credit to small and medium-sized businesses.
- Federal Funds Rate: Sunday, 21:00. The Federal Reserve slashed the federal funds rate by 1.00% to a target range of 0.00% to 0.25% at an unscheduled emergency meeting. This move was made in coordination with other major central banks in order to support the economy during the current economic crisis. The Fed reconvenes on Wednesday for its regularly scheduled policy meeting.
- RBA Monetary Policy Meeting Minutes: Tuesday, 0:30. The minutes provide details of the bank’s policy meeting earlier in March. At that meeting, the RBA lowered the benchmark rate from 0.75% to 0.50%. A pessimistic assessment by policymakers in the minutes could weigh on the Aussie.
- UK Employment Data: Tuesday, 9:30. Wage growth slowed to 2.9% in December, the first time it has fallen below the 3.0% threshold since August 2018. The January forecast stands at 3.0%. Unemployment rolls slipped to 5.5 thousand in January, much lower than the estimate of 20.2 thousand. Another strong reading is expected, with a forecast of 6.2 thousand. The unemployment rate is expected to remain unchanged at 3.8%.
- Eurozone Final CPI: Wednesday, 10:00. Final CPI and Core CPI are both expected in at 1.2%, which would confirm the initial releases from earlier this month.
- German PPI: Friday, 7:00. This inflation indicator improved to 0.8% in January, up from 0.1% a month earlier. This marked the strongest gain since 2011. However, the indicator is projected to decline by 0.2% in January.
- Australian Employment Reports: Thursday, 0:30. Job creation has been slowing, as the January reading came in at 13.5 thousand, down sharply from 28.9 thousand in the previous release. The downswing is expected to continue in February, with an estimate of 8.5 thousand. The unemployment rate is projected to remain unchanged at 5.3%.
*All times are GMT
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