• SNB and BoE are scheduled to make a decision on interest rates
  • US CPI will be a pivotal reading for today
  • Central bank speakers on the agenda as well

Although, we have meetings of Swiss National Bank (SNB) as well as Bank of England (BoE), neither is expected to change interest rates or significantly adjust monetary policy settings. On top of that, US CPI should be the most crucial release for today. Moreover, there are some central bank speakers later in the day.

8:30 am BST – SNB interest rate decision: The Swiss National Bank will not change its monetary policy, though some adjustments in terms of fresh macroeconomic projections might occur. Let us add that the Swiss franc has weakened significantly against the single currency since mid-July, thus it could prompt the SNB to slightly revise up its inflation forecasts. Either way, inflation in Switzerland remains clearly subdued, hence even slight upward revisions should not be strongly supportive of the CHF. Otherwise, GDP projections are worth keeping a close eye as well given powerful momentum seen across the old continent.

12:00 pm BST – BoE interest rate decision: The BoE might have a hard nut to crack at today’s meeting. On the one side, inflationary pressures mounted in August, on the other one nominal wage growth disillusioned quite substantially in July. All in all, one could assume that some disputes within the MPC might emerge. What’s more, even as inflation has been driven mostly by the GBP depreciation (not by domestic demand), it may encourage some members to put a brake on it despite sluggish GDP growth seen in the second quarter. 

1:30 pm BST – US CPI: We got quite disappointing PPI numbers yesterday which seem to herald no a surprising bump in case of CPI. On the flip side, the US dollar index (USDIDX on xStation5) got a boost on Wednesday following revelations from the White House with regard to upbeat discussions on possible tax cuts. That said, if CPI sped up more than expected, it could buoy the greenback one again. Let’s also add that some voices regarding impacts stemming from the weak dollar on inflation have appeared of late. Even as those seem to be not so constructive because the US economy relies chiefly on consumption, it’s another reason to watch the data carefully. The consensuses suggest 1.8% yoy and 1.6% yoy for CPI and core CPI respectively.

Central bank speakers:

  • 8:05 am BST: Jansson (Riksbank)
  • 4:30 pm BST: Weidmann (ECB)
  • 5:00 pm BST: Mersch (ECB)
  • (tentative): Jordan (SNB) – the speech after the interest rate decision

link do file download linkThe US dollar index (USDIDX on xStation5) has drawn a morning star candlestick of late which might bode well for further gains if CPI beats forecasts: Source: xStation5