This will be an important week for the markets as the Federal Reserve officials meet for the third time this year. Here are the top highlights that traders need to watch out for.
Boeing is likely to be in the news a lot this week. This is after more details of the two Boeing 737-max crashes happened. In a report by Wall Street Journal, it was revealed that federal prosecutors had started a probe into the company’s development of the plane. The report also explained how the company started to develop the new version of the plane. While Boeing has been developing the 737s for decades, it started to build the current model in 2015. This was necessitated with Airbus, which had developed a better version of the plane and received many orders. Last week, many countries grounded the airplane and Boeing said that it will not ship the plane until it finds a fix. This week, traders are likely to continue paying a closer attention to this story.
The Federal Reserve will hold its third meeting of the year this week. In this meeting, the bank is expected to leave interest rates unchanged. In addition, the bank is expected to signal to investors that it did not have the intention of raising rates again this year. This idea has already been priced-in by the market, which means that it is unlikely to lead to major movements. In addition to this, the Fed will announce when it will start shrinking the massive $4 trillion balance sheet.
Traders will also focus on Deutsche Bank, the biggest bank in Germany. In the past few years, the bank has faced many challenges such as declining revenues and profits, corporate turnover, and huge fines. This has made the bank vulnerable. To solve the situation, the government and biggest shareholders have mulled its merger with Commerzbank, another large German lender. This weekend, it was announced that the two banks had started formal merger talks. If the talks work, a decision could be reached this year.
The game of chicken in the United Kingdom about Brexit will continue this week. Last week, the parliament held three votes. On Tuesday, they rejected Theresa May’s deal. On Wednesday, they voted to avoid a no-deal Brexit and on Wednesday, they voted to extend the Brexit deadline. Since then, Theresa May has been talking with Democratic Unionist Party (DUP), with the goal of having a deal. This week, the parliament is expected to have another vote and it is unlikely to pass the vote without structural changes to May’s proposals.
This week, traders will receive a number of economic data. Tomorrow, they will receive wage numbers from the UK and the ZEW economic sentiment from Germany. On Wednesday, they will receive the minutes of BOJ meeting, UK inflation numbers, and crude oil inventories numbers. On Thursday, they will receive Australian employment numbers, New Zealand GDP numbers, Swiss National Bank interest rates decision, Philadelphia manufacturing index numbers, and UK retail sales numbers. On Friday, they will receive the interest rates decision by Russia, EU PMIs, and Canada inflation.