It is going to be a week of encrypted messages from the US FED reserve, The Bank of England and the ECB president Draghi. The new Federal Reserve Chairman Janet Yellen will address before the Joint Economic Committee on the economic outlook and recent monetary policy actions. the first of the event will be a prepared statement in which markets will expect the chairman to emphasize that the Federal Reserve will hold low interest rates for the time been. In the second part the committee conducts a question and answer session.
The Q&A portion of the testimony can see heavy market volatility for the duration but overall markets will not be expecting any uncertainty coming out, instead market could come to term with the reality that the DOW JONES should retreat to a 15000 to be more in line with future economic conditions.
Bank of England (BOE) Governor Mark Carney is to speak on Wednesday
On Wednesday the Bank of England (BOE) Governor Mark Carney is to speak. As head of the BOE’s Monetary Policy Committee (MPC), Carney has more influence over sterling’s value than any other person. Traders will scrutinize his public engagements for clues regarding future monetary policy. His comments may spark a short-term positive or negative trend.
Bank of England (BOE) Inflation Report is due out
The GBPUSD in particular have been recently stack at the top of the range.The Bank of England (BOE) Inflation Report is due out as he speaks. The inflation report sets out the detailed economic analysis and inflation projections on interest rate decisions and an assessment of the prospects for U.K. inflation over the following two years. The report is released quarterly. Inflation have been trending lower since Jan 2012 and another lower reading could trigger a sell off on the GBPUSD.
EURO to go sideways until real and consecutives GDP
Mario Draghi will also have a speech of his own this week. He has more influence over the EUR value than any other person. His comments may determine a short-term positive or negative trend and the European GDP report to be released this week investor will look for clues on what to expect. Another negative GDP and the Euro currency could give up this week gains. Certainly a positive result will lift markets and could push the Euro higher. I particularly expect the EURO to go sideways until real and consecutives GDP comes along.