The focus is still on inflation this week, as Australia will print its quarterly CPI while the U.S. has the core PCE index due.
Other top-tier catalysts worth paying attention to include the U.S. advanced GDP release for Q1 and the BOJ policy decision.
Will these events spark another round of big moves in the forex market?
Before all that, ICYMI, I’ve written a quick recap of the market themes that pushed currency pairs around last week. Check it!
And now for the closely-watched potential market movers on the economic calendar this week:
Australia’s quarterly CPI
The Land Down Under will be releasing its Q1 CPI reading on Wednesday (Apr. 26, 1:30 am GMT) and this should provide some clues on what the RBA‘s next policy moves might be.
Number crunchers are projecting a 1.3% quarter-over-quarter increase in price levels, translating to a year-over-year headline CPI reading of 6.6%.
This would represent a dip from the earlier period’s 1.9% quarterly gain or 6.8% annual CPI reading.
Stronger than expected results might still shore up RBA interest rate hike hopes for May, but any confirmation that price pressures have slowed significantly could mean that the central bank would sit on its hands for much longer.
U.S. advanced GDP
On Thursday (April 27, 12:30 pm GMT) Uncle Sam will give the first glimpse into the first quarter’s growth figures, as the economy prints the advanced version of the GDP report.
Analysts are foreseeing a slowdown in economic activity from the earlier 2.6% quarterly expansion to a 2.0% reading this time. Meanwhile, the price index is also slated to show a dip in inflation from 3.9% to 3.7% quarter-over-quarter.
Don’t forget that market watchers are already feeling jittery about a potential U.S. recession, which means that weaker than expected GDP data could further stoke Fed rate CUT expectations and dollar weakness.
BOJ monetary policy statement
Time for the new BOJ Governor to shine!
The Japanese central bank’s policy decision on Friday (April 28, Asian session) marks the first official rate statement of Governor Ueda.
No actual changes to interest rates or bond purchases are expected, as Ueda has already been reiterating that their ultra-loose monetary policy is appropriate for now. However, any kind of shift in their forward guidance to a less dovish one could spark gains for the yen.
U.S. core PCE price index
Last but certainly not least is the Fed’s preferred inflation measure or the core PCE price index due on Friday (Apr. 28, 12:30 pm GMT).
Now this could set the tone for the U.S. central bank’s policy expectations in the coming months, as moderated price pressures could further dash hopes of more rate hikes.
Number crunchers are foreseeing another 0.3% uptick in price levels, which isn’t really all that impressive. A stronger read, however, could keep dollar bulls hopeful that the Fed could maintain its pace of tightening for much longer.
