This week, traders will continue to focus on global politics especially in the United States, UK, and the EU. In the United States, the Mueller investigation will continue focusing on Donald Trump and his business. As it was reported a while ago, Mueller had subpoenaed the Trump Organization for documents related to Russia. As Trump had mentioned before, this would be a red line in the investigation.
Over the weekend, Russia’s president, Vladmir Putin won another six-year term by a landslide. He won more than 70%. The election came at a time when Russia is being accused of developing nerve agents and hacking key United States infrastructure. Last week, it was accused of hacking the country’s power sector and poisoning former Russian spies in the United Kingdom.
From a data aspect, the biggest news this week will come on Wednesday when the FOMC will complete its two-day meeting. The meeting will come at a time when inflation in the country is easing and at a time when the world is grappling with a new era in trade. This comes at a time when Trump is focusing on trade and the deals that have defined the world as we know it. He has initiated tariffs on steel and he is already creating more tariffs targeted at Russia. Over the weekend, top American companies sent a letter opposing any such tariffs arguing that they will increase their cost of production.
Last week, the country’s inflation data showed that inflation eased in February but a new threat on trade would push inflation rising as manufacturers move to cover costs. Traders expect the FOMC to hike rates. For the year, most of them expect the FOMC to hike three times.
At the same time, the Reserve Bank of New Zealand will complete its meeting. It is expected that the officials will leave rates unchanged following a few months of slowing growth. The revised Q4 GDP numbers showed that the country’s GDP slowed more than expected. This slow down was caused by extreme weather which caused lower production of dairy products. The rates will be left at 1.75%.
On Thursday, we will receive employment data from Australia. The data to be released will show that the country created more jobs in February than it did in January. Traders expect that the economy added more than 20K jobs. In January, it added about 16K jobs. The unemployment rate is expected to remain at 55.5% while the participation will remain at 65.5%.
On Tuesday, we will get important inflation data from the United Kingdom. The data will show that inflation eased to 2.8% from 3.0% last month. Easing of inflation may be a good thing for the UK as the trend moves closer to the target of 2%. This data will come a day before the Bank of England releases its interest rate decision. As such, the cable will be a key currency to watch this week.
Other major economic data to be released this week will be: RBA minutes and German ZEW Business environment on Tuesday, UK Jobs numbers and US home sales numbers on Wednesday, German manufacturing numbers and UK retail sales on Thursday, and Canadian CPI, Retail Sales, and US home sales data on Friday.