Sun, Feb 28, 2021 @ 14:58 GMT
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US Fed Expected To Hike Rates To 1.75%

At 09:30 GMT, UK Average Earnings excluding Bonus (3Mo/Yr) (Jan) is expected to come in at 2.6%, from 2.5% previously. Claimant Count Change (Feb) is expected at -5.0K, from a previous reading of -7.2K. ILO Unemployment Rate (3M) (Jan) is expected to be unchanged at 4.4%. Average Earnings including Bonus (3Mo/Yr) (Jan) is expected to be 2.6%, from 2.5% previously. Claimant Count Rate (Feb) was 2.3% previously. Public Sector Net Borrowing (Feb) is expected to be £0.00B, from £-11.62B prior. Wage growth is expected to tick up after stabilizing at 2.5% for the past three months. This is despite the fact that the unemployment rate is at multi-decade lows when wage growth would normally be higher as competition to attract workers takes hold. The BOE will study wage data for any indication of a pick up to see if they need to maintain their hawkish tone. GBP crosses may be influenced by this data release.

At 14:00 GMT, US Existing Home Sales (MoM) (Feb) is expected to be 5.40M, against 5.38M previously. After reaching a seven-year high in November, this data point has slipped lower over the last two months, signalling a little softness in the sector. USD crosses may be moved by this data, as analysts try to understand the impact on the economy.

At 18:00 GMT, the US Fed’s Monetary Policy Statement and Interest Rate Decision, which is expected to be raised to 1.75% from 1.5%, will be released. This hike in rates has been more or less priced into markets and marks the first in a series of expected increases in 2018. The FOMC Economic Projections will be released at the same time. It can be argued that these projections will be of greater importance, as traders look to quantify the pace of rate hikes ahead in the dot plot. The market is pricing in three hikes in 2018, with a slight bias for four that could strengthen the dollar position. At 18:30 GMT, the FOMC Press Conference will take place, as the new Chairman, Jerome Powell, addresses the audience. USD crosses may experience volatility during this time.

At 20:00 GMT, the Reserve Bank of New Zealand Interest Rate Decision is expected to be left unchanged at 1.75%. The Rate statement and the Monetary Policy Statement will be released at the same time. At 21:00 GMT, there will be a press conference discussing the rate decision and monetary policy statement. At the last meeting, the RBNZ forecasted lower GDP and signalled that lower inflation could warrant a rate cut. The NZD fell as a result. NZD could see a spike in volatility after this data is released and during the press conference, with NZD/USD particularly exposed due to central bank risk from the FED and the RBNZ.

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