The foreign exchange market super week --- the US CPI and the Federal Reserve meeting notes "dance together", the three major central bank resolutions hit

Daocheng Technology Financial News - Last week, the market was volatile,non-agriculturalThe employment report is released, the situation in the Middle East is tense,Federal ReserveOfficials speak frequently,Gold priceIt keeps going up.US stocksThe Dow Jones index recorded its worst performance of the year.dollarContinued pressure. Looking ahead to this week,foreign exchange marketSuper Data Week is upon us again.European Central BankThe Bank of Canada and the Federal Reserve Bank of New Zealand will issue interest rate decisions, among which the European Central Bank may hint that it will cut interest rates in June, while the trend of the dollar will be affectedUnited StatesCPI dataandFed meeting notesThe impact of.

               (One-hour chart of the US dollar index)

The US CPI and the Federal Reservewant

This week focuses on the CPI inflation data released on Wednesday (April 10) and the Federal Reserve's latest meeting notes. Expectations are rising again, but core inflation is on track to fall. The meeting notes will cover FOMC officials' discussion of economic growth and inflation expectations and, while unlikely to have breakthrough information, will provide market insight.

CPI is set to rise to 3.4 per cent in March from 3.2 per cent previously. However, core inflation is expected to fall to 3.7 per cent. Since the core figure excludes energy prices, the difference is likely to reflect the rise in oil prices for the month.

That would be a mixed report for the Fed, where a fall in core inflation would indicate that the broader disinflationary trend is continuing, even as higher energy prices keep headline inflation high.

Meanwhile, meeting notes will cover the March meeting, when FOMC officials raised their economic growth and inflation forecasts but still expect three rate cuts this year. It will be interesting to see the discussions behind the scenes. Still, the minutes released this time are unlikely to contain any groundbreaking information, as most officials have made multiple appearances since the meeting.

As for the dollar, it swung wildly last week, falling after the Institute for Supply Management (ISM) released a disappointing survey of the services sector, but then recovering on the back of risk aversion fears of an Iranian attack on Israel.

Overall, the fundamentals of the US economy appear to be stronger than in most regions. For example, according to the Atlanta Fed, GDP growth in the US is expected to reach 2.5% this quarter. So the overall outlook for the dollar looks positive, although a sustained rise in the reserve currency may require more signs of weakness in foreign economies or a climate of risk aversion to stimulate demand for safe-haven assets.

Interest rate decisions in Canada and New Zealand

The Reserve Bank of New Zealand will also announce its interest rate decision on Wednesday. The local currency has been struggling this year, losing more than 4% of its value against the dollar. At the end of last year, the New Zealand economy fell into a mild technical recession, which weighed on consumer and business confidence. But inflation remains high, so the market does not expect the Reserve Bank of New Zealand to take any action when it meets on Wednesday.

New Zealand dollarA sustained rebound may require a meaningful recovery in the economies of Asia's largest economies, which would boost support for the countrycommodityThe demand for exports.

The Reserve Bank of New Zealand is likely to push back against investors' expectations of a rate cut this week, even though the New Zealand economy is already in a double-dip recession. The Reserve Bank of New Zealand will leave its official cash rate unchanged at 5.5 per cent for the sixth time in a row on Wednesday, according to a Bloomberg survey of 15 economists. They expect policymakers to emphasise the need to keep interest rate caps in place for an extended period to curb inflation. Kelly Eckhold, chief New Zealand economist at Westpac, said markets were taking a more aggressive view of the timing and extent of the central bank's rate cut. But this time, those expectations will take a hit. Most economists expect the first rate cut by the Reserve Bank of New Zealand to be in the fourth quarter, although some believe it will come as early as August. Westpac and ANZ do not expect to start cutting rates until early 2025.

The Bank of Canada, which also meets on Wednesday, sees a 15 per cent chance of an immediate rate cut as core inflation falls steadily. Massive population growth has helped ease labour market conditions and ease concerns about wage-induced inflation. On the downside, there is a housing shortage, which has kept housing inflation high.

As a result, the Bank of Canada is unlikely to cut rates at this meeting, although it could provide a clearer signal that it will cut rates this summer. The Canadian dollar will also be driven by oil prices, and any escalation in the Middle East could benefit oil-exporting currencies.

European Central Bank interest rate decision

In the past year,EuroThe regional economy is in trouble, the slowdown in global trade has led to a drop in export demand, German manufacturing has contracted, and economic growth has all but stagnated. While this has helped ease inflationary pressures, inflation fell to 2.4% in March, prompting the European Central Bank to consider cutting interest rates. Expectations of a possible rate cut in June have spread through money markets. Therefore, the European Central Bank may use this week's meeting as a platform for rate cut forecasts, and emphasize that rate cuts can help reduce the risk of economic recession.

The European Central Bank is likely to use Thursday's meeting as a springboard to prepare for a summer interest rate cut, with Ms Lagarde likely to highlight progress on inflation and argue that cutting rates sooner would help minimise the risk of a recession.

As for the euro, its bleak economic fundamentals paint a negative picture. One reason the euro has been so resilient over the past year is thatnatural gasThe plunge in prices, which benefited the euro through the trade channel, was also helped by the upbeat tone of the stock market, which depressed the dollar as a safe haven.

Thus, the euro has survived not because of economic performance, but because of developments in other financial marekts. This is a double-edged sword, because it means that any change in these trends could deprive the euro of an important pillar of support.

In other words, the euro needs low oil prices and rising stock markets to survive. Otherwise, traders may start focusing on weak growth prospects and interest rate cuts.

other

Pay attention to the New York Federal Reserve's one-year inflation forecast on Monday, and pay attention to TuesdayEIAThe monthly short-term energy outlook report released on Thursday will pay attention to China's March CPI data, the United States' March PPI data and the changes in the number of initial jobless claims.OPECcrude oilThe monthly market report, on Friday, pays attention to China's trade data, European CPI data, the US import price index in March and the preliminary value of the University of Michigan consumer confidence index in April.

In terms of events, we will focus on news related to the Russian-Ukrainian conflict and the geopolitical situation in the Middle East.