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National Holidays: WARNING!! US Interest Rate Decision and Press Conference 19:00-19:45 BST
We begin Thursday with an unusual release in the form of the Bank of Switzerland’s Interest Rate Decision and Press conference. The Bank of Switzerland is expected to keep its interest rates unchanged at 08:30 BST but analysis suggests that the accompanying press conference may see the governor reiterate that he is still prepared to take further action to weaken the Swiss Franc which may see the franc take a further negative decline.
Analysis indicates that Thursday is set to be dominated by the major event of the summer – Septembers Federal reserve Interest Rate Decision at 19:00 BST.
The United Kingdom 09:30 BST
Our first major releases of the day comes from the UK, as we see the UK Office of national Statistics release its Year on Year (YoY) and Month on Month Retail Sales figures. Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. The Core number excludes Auto sales and Fuel, which tend to be very volatile.
What the Forecasters Say
Month –on-Month Retail Sales are forecast to show an increase in the rate of growth, taking the expected published figure to 0.20% growth from last month’s published figure of 0.10%.
Whilst Year-on-Year Retail Sales are expected to fall from last months figure of 4.20% growth to a forecast published figure of 3.80%.
Given the wider economic data relating to the UK and specifically individual consumer spending and average earnings, we would expect these forecasts to under estimate UK Retail Sales growth, with Month-on-Month retail sales likely to exceed market sentiment figures of 0.20%.
View Points – Currencies and Indexes
We would also expect both the FTSE and the GBP to respond positively to this release during morning trading if month on month figures meet or exceed market sentiment forecasts. With interesting currency pairs likely to include GBP/JPY, GBP/CHF, GBP/CAD, GBP/EUR and possibly the GBP/USD.
The United States 19:00 BST
The United States Federal Reserve’s Federal Open Market Committee (FR:FOMC) concludes its meeting regarding the level of QE within the markets along with announcing its monthly central bank interest rate decision.
The federal reserve had indicated that a rise may come in September but given the weaker than expected US data that we have seen over the last couple of months makes a postponement of that rise more than possible. As a result we may see some meaningful negativity within the USD ahead of the release and afterwards if the 19:30 Press conference goes as expected which in turn may lead to upward pressure within the major US stock markets.
But it must be noted that the US interest Rate decision is dependent on the board of the federal reserve and is therefore an unknown quantity especially considering this month’s interest rate decision may see the end of Zero Interest rate Policy in the USA and as a result is one of the highest risk events of the year.