Central bank rate decisions fill the calendar this week

Good morning

US data releases will be one hour earlier at 12.30 or 14.00 London time. 

FX option expiries will be 14.00 London time, not the usual 15.00 London time.

This will be until Sunday 29^th March when we change our clocks in the UK.

Welcome back, I hope you had a good weekend.  Sports fans were treated to plenty of action including some terrific rugby in the final round of the Six Nations, England just losing out to tournament winners France in a thrilling encounter.  Kimi Antonelli won the Chinese F1 grand prix at just 19 years old.  He was joined on the podium by team mate George Russell and Lewis Hamilton, his first podium finish for Ferrari.  Hamilton has been around for a while, indeed he won his first F1 race when Antonelli was just one year old. 

In football, the big news was Spurs managed a draw against Liverpool in a match that I had feared could be something of a rout.  With most other teams at the bottom of the league around Spurs also drawing, Spurs have kept out of the bottom three and now look forward to next weekend in a massive match against Notts Forest.  Arsenal beat Everton and pulled further away at the top of the table as Man City could only manage a draw.  This week we’re back to Champions League action with English clubs all having a fair bit of work to do to get through to the next round.

The week begins with focus on the Middle East conflict and how best to keep shipping in the Strait of Hormuz flowing as best it can.  Trump has called on allies to help and has warned Nato could be in jeopardy if they don’t offer support.  Trump has also suggested China should help out, and has hinted that his meeting with President Xi could be postponed if they don’t assist.  Heavy bombing continues in Iran but this doesn’t seem to have stopped missile and drone launches towards Israel, Saudi Arabia and UAE.  I feel we are now at the stage where either we see real progress towards an end to the conflict or the risk is it will just drag on and on. 

In terms of financial markets, well equites continue to struggle, oil prices remain up around the $100 area and the US dollar remains firm.  GBPUSD is currently 1.3250, EURUSD 1.1440 and USDJPY 159.30.  With USDJPY up on more fundamentals such as the stronger USD rather than just speculative moves, it is possible the risk of intervention is reduced for the time being despite having previously been seen around current levels.  I guess some things you just can’t fight. 

The week ahead is filled with central bank rate meetings.  We have RBA in the early hours of tomorrow morning, there is a very good chance they will raise rates by 25bps once again to lift rates to 4.1%.  AUD fortunes depend on this but also on any forward guidance given the market is looking for a possible not rise not only tomorrow but also in May.  AUDUSD is 0.7020, AUDNZD at a heady 1.2065 and GBPAUD 1.8865. 

Wednesday brings Fed and BoC rate meetings, Thursday sees BoJ, SNB, BoE and ECB, all of which are expected to remain on hold, so although it looks like it could be a busy week ahead there is a good chance it comes and goes with little fuss, at least in terms of the economic calendar.  There remains plenty of other geopolitical news to keep us on our toes.

Have a great day…

-  12.30 US umpire state manufacturing survey

-  12.30 CAD CPI

-  13.15 US industrial production

-  18.00 US monthly budget statement

-  03.30 RBA rate announcement

-  04.30 RBA press conference