Market Report: JP Tankan Survey, FOMC Meeting & RBA Decision next week

March 31, 2017

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Market Report: JP Tankan Survey, FOMC Meeting & RBA Decision next week

This article is originally referred from FXGiants News

Weekly Market Outlook: April 3rd – 7th

RBA policy meeting, US jobs report, FOMC minutes, other key data in focus

Next week’s market movers

  • In Australia, we expect the RBA to remain on hold and maintain its neutral bias. However, we see
    the risks as skewed towards a more dovish narrative.
  • In the US, the employment report for March could prove critical to market expectations regarding the timing of the next Fed hike. The minutes from the latest FOMC meeting will also be in focus.
  • In Japan, we expect the Tankan survey for Q1 to reveal rising business optimism.
  • We also get key economic data from the UK, the US, and Canada.

On Monday, during the Asian morning, the Bank of Japan will release its Tankan business confidence survey for Q1. This is perhaps the most important indicator that comes out from Japan and thus, it will be closely watched. No forecast is available, but bearing in mind that the Reuters Tankan Diffusion Index rose notably in all three months of the quarter, we expect the official indices to move in a similar fashion. This could signal that Japanese firms are feeling more optimistic, something that we believe may be related to the notable depreciation of the yen following the US election late last year. We expect Japanese equity markets to benefit from such a strong report, as it may be a signal that GDP growth is set to pick up steam moving forward. Something like that could also generate some speculation that the BoJ may gradually begin thinking about a slight reduction in its massive stimulus program at its upcoming meetings. However, as long as Japan’s headline and core inflation rates remain stuck near zero, we do not expect anything like that to happen, as the Bank would not want to undermine the effectiveness of its previous easing measures by triggering a tightening in financial conditions.

From the US, we get the ISM manufacturing PMI and thereafter on Wednesday, we get the non-manufacturing index

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FXGiants Weekly Report for April 3rd to 7th

Original Source: FXGiants News

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