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Forecasting the Coming Week: Investors’ attention remains on Fed’s rate cut bets

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Expectations of a later-than-expected interest rate cut by the Federal Reserve lent further legs to the Greenback, lifting the DXY to multi-month tops. There was no news at the ECB meeting, while FX intervention fears kept hovering around the Japanese yen.

The Greenback extended further its rally and advanced to fresh tops on the back of shrinking bets of a rate cut by the Fed in June. Retail Sales will take centre stage along with Business Inventories, the New York Empire State Manufacturing Index and the NAHB Housing Market Index on April 15. On April 16, the focus of attention will be on Building Permits, Housing Starts and Industrial Production, while the Fed Beige Book is due on April 17. Usual Initial Jobless Claims, the Philly Fed Manufacturing Index, the CB Leading Index and Exiting Home Sales are all expected on April 18.

EUR/USD collapsed to levels last seen in November well south of the 1.0700 support on the back of increasing Dollar's strength. The weekly calendar kicks in with Industrial Production in the euro area on April 15, seconded by the Economic Sentiment tracked by the ZEW survey in Germany and the euro bloc on April 16. On April 17, final Inflation Rate in the euro area is due.

GBP/USD accelerated its losses and retreated to yearly lows in the vicinity of the 1.2400 support amidst rising selling pressure in the risk complex. The UK docket will see the publication of the labour market report on April 16 ahead of the Inflation Rate on April 17 and Retail Sales on April 19.

USD/JPY rose to 34-year highs north of the 153.00 level following the Dollar's buying pressure and higher US yields. On April 15 comes the Machinery Orders followed by the Reuters Tankan Index and Balance of Trade results on April 17. Foreign Bond Investment is due on April 18 and the Inflation Rate and the Tertiary Industry Index are due on April 19.

Extra downward bias saw AUD/USD revisit multi-week lows in the sub-0.6500 region amidst a favourable context for the Greenback. The Westpac Leading Index is due on April 17 followed by the labour market report on April 18.

In China, the Q1 GDP Growth Rate, Industrial Production, Retail Sales and the Unemployment Rate are all due on April 16 along with FDI figures on April 17. USD/CNH extended its corrective upside to monthly highs near 7.2700.

Anticipating Economic Perspectives: Voices on the Horizon

  • BoE's Breeden speaks on April 15.
  • Fed's Daly and Jefferson speak on April 16 along with BoE's Bailey and BoC's Macklem.
  • BoE's Greene, Haskel and Bailey are all due to speak on April 17 along with Fed's Mester.
  • Fed's Bowman, Williams, Bostic and SNB's Martin speak on April 18.
  • BoE's Breeden and Ramsden will speak on April 19.

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