The FOMC minutes are the main event of a short trading week. US equity markets closed at highs ahead of the long weekend celebrating Independence Day.
The week ahead starts with a US holiday – Independence Day. The US banks and markets are closed today, meaning that the price action in financial markets will lack volatility.
Over the past seven trading days, the S&P500 index has reached a new high each day. This is the longest streak since 1997, telling much about the buoyant sentiment behind the equity markets.
Economic Data and Events To Consider This Week
The Bank of Canada Business Outlook Survey is released today. This is an important report for traders interested in the Canadian dollar’s performance in a week when the labour data also comes out a few days later.
On Tuesday, traders will focus on two main events – the Reserve Bank of Australia’s rate statement and the ISM Non-Manufacturing report from the United States. RBA’s Governor Lowe also speaks 90 minutes after the rate statement, so the volatility on the Australian dollar pairs is expected to increase significantly.
The main event of the trading week is scheduled for Wednesday. This is the day when the FOMC minutes will be released. While not always a market-moving event, this time it should be different. At the last meeting, the market found out that the Fed turned hawkish, signaling more rate hikes in the near future than market participants expected.
Sure enough, the FOMC members downplayed the June FOMC Meeting’s message in the weeks that followed. But if today’s minutes confirm the original message, the US dollar may make a new leg higher.
The week ends with the employment data in Canada, to be released on Friday. Typically, the Canadian jobs data is released together with the Non-Farm Payrolls report in the United States. However, from time to time, the dates diverge, as hashappened this week.
All in all, while a shorter week than usual, there are plenty of economic events capable of moving financial markets. Once again, the focus is on the Federal Reserve of the United States.