The week Ahead

Wednesday - FOMC Statement and Fed Funds Rate

The financial markets seem to be searching for direction. In the revised World Economic Outlook, the International Monetary Fund left its global growth mostly unchanged. The outlook for growth in the U.S. was revised slightly lower (3.6% to 3.1%) –with uncertainty a big factor hanging over the markets, I'd suggest a cautious approach to this release, as traders look to see if we get any changes in the FOMC statement that may reveal any changes in their economic outlook.

Wednesday - Official Cash Rate and RBNZ Statement.

The cash rate is widely expected to remain unchanged; however, we look to the rate statement for any hints into the economic outlook and clues for future rate decisions. This is the primary tool for the RBNZ to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about economic conditions that influenced their decision.

Thursday - CPI Flash Statement Eurozone

Consumer prices account for a majority of overall inflation. Inflation is important to currency traders because rising prices lead the Central Bank to raise interest rates out of respect for their inflation containment mandate. The IMF outlook for the Eurozone was revised higher, reflecting the impact of a stronger dollar. Rumors of possible plans for a Greek exit from the Euro can lead to increased market volatility. Adding this release to those factors creates the possibility of big market impact –since the CPI number usually has a significant impact on its own.

Friday - ISM Manufacturing PMI US

The ISM report is one of traders’ favorite releases because it is a leading indicator of economic health. With businesses tending to react quickly and aggressively to market conditions, their purchasing managers hold perhaps the most current and relevant insight into a company's view of the economy. The respondents to the survey (approx. 400 purchasing managers) are asked to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries and inventories. A stronger than expected number should signal a stronger dollar.