Three central banks’ decisions and Fed Chair Powell’s testimony – the main events in the trading week ahead. The US stock market remains close to all-time highs.
It is a busy week ahead for financial market participants as three central banks are scheduled to release their statements. On top of that, the US Consumer Price Index (CPI) and Fed Chair Powell’s testimony are key drivers for the US dollar and the equity markets.
In the equity markets, the S&P500 index is trading close to its all-time high reached last Friday. The price action is bullish, and the low volatility environment characteristic during the summer bodes well for equities.
Three Central Banks Release Their Policy Decisions This Week
The week starts slowly as the economic calendar is very light today, so market participants will focus on US equity markets, which remain in the driving seat.
From tomorrow, important events are expected to impact the price action. The US CPI, forecasted at 0.5% in June, will have a say in the US dollar’s daily volatility.
In the upcoming Asian session, the Reserve Bank of New Zealand will be the first central bank to release its statement this week. The market expects the bank to keep the cash rate at 0.25%.
The main event of the trading week and the one to massively impact the price action is Fed Chair Powell’s testimony. This is the semi-annual testimony that the Chair of the Federal Reserve must give in front of the House Financial Services Committee and the Senate Banking Committee.
Any hints regarding the tapering of the asset purchases or changes in the monetary policy would move the US equity markets and the dollar. Besides the Fed, the Bank of Canada and the Bank of Japan’s decisions are closely monitored by Canadian dollar and Japanese yen traders.