Turkish central bankers to make their interest rate decision at noon
Crude oil inventories expected to drop for the second week in a row
Poloz and Wilkins to appear before the Canadian Senate
Investors will be offered one key macroeconomic event on Wednesday and that is the interest rate decision of the Central Bank of the Republic of Turkey. Turkish lira depreciated heavily as of late on the back of political uncertainty and unreasonable monetary decision therefore today’s decision is closely watched by market participants. Apart from that investors will be served with a weekly DOE report on the oil inventories. CAD traders may want to stay cautious in the evening as Bank of Canada Governor Poloz and Senior Deputy Governor Wilkins will appear before the Standing Senate Committee on Banking, Trade and Commerce.
12:00 pm BST – Central Bank of the Republic of Turkey interest rate decision. The Turkish central bank stayed reluctant to any rate hikes under the pressure of the President Erdogan. However, if this situation is to continue country’s economy may suffer from overheating. Adding to that recent political risks connected to Russia and Syria that spurred an intense wave of TRY selling Turkey may have found itself on the edge of the currency crisis. Today’s meeting looks like the final bell for the Turkish monetary authorities to prevent such development as inflation is getting out of control (the inflation target is set at 5% since 2012 while actual inflation surpasses 10%). Nevertheless, market consensus expects rates to be left unchanged and if this is so Turkish lira may drag increased attention in the upcoming days.
3:30 pm BST – US, Crude Oil Inventories. Yesterday’s API report on the inventories missed the forecasts of 2M drop heavily by showing almost 1.1M increase. If this is to be confirmed by today’s government report oil prices may get under pressure distancing them further away from recent peaks. Luckily for the oil bulls economists surveyed by Bloomberg point for a 1.267M drop in the crude oil inventories. It is also worth to note that the gasoline and distillate stocks are also expected to decrease therefore an increase demand for crude from oil refineries may surface.
Central bank speakers scheduled for today:
8:00 am BST – ECB’s Villeroy, Knot and Lane
9:15 pm BST – BoC’s Poloz and Wilkins
USDTRY remains in its upward channel. After Turkish lira managed to get some breath, thanks to Erdogan calling snap elections, it now eyes the recent highs at 4.195. Today’s CBT decision may steer the sentiment towards the currency in the upcoming days. Source: xStation5