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Greece First and then the FED

The turmoil in the Euro-zone is nearing fever pitch. Europe’s escalating debt crisis is emerging as a top concern for both Governor Carney at the BoC and the Fed. Thrown in data showing that the euro-zone and US economies are slowing, which means fears of global contagion are real, could be pushing the Fed closer to more bond buying or extending “operation twist”. Despite a sluggish US recovery and still high unemployment, the Fed had looked odds on to to keep monetary policy on hold for a prolonged period and that next weeks FOMC meet was suppose to provide little drama. The market has been adding risk ever so delicately on the assumption the FED will stimulate growth. The rumored announcement on Thursday that “Central banks from major economies stand ready to take steps to stabilize financial markets by providing liquidity and preventing a credit squeeze if the outcome of Greek elections on Sunday causes tumultuous trading” has been aiding this sentiment. Now we wait for Sunday.

Below are some other highlights of the week:


Americas

 

EUROPE Week in FX [1]

ASIA Week in FX

 

WEEK AHEAD

  • All currency positions await the Greek election outcome on Sunday
  • USD has the Fed to contend with midweek. Hints of QE3?
  • G20 meetings will monitor this week’s global events
  • GBP has Claimant count changes, CPI and MPC meeting minutes to contend with
  • Sales data is delivered from GBP and CAD
  • EUR is expected to be influenced by German economic and business sentiment
  • USD has weekly claims, existing home sales and Philly Fed Manufacturing to digest
  • Midweek has CNY flash manufacturing and NZD growth numbers to deliver
  • Core CPI rounds off the event risk week for CAD

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell [6]

Vice-President of Market Analysis at MarketPulse [7]
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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