The Friday Forex Takeaway – Episode 34

<h2>Key Points from This Week</h2>
<p><strong>RBNZ Signals Negative Rates Likely</strong></p>
<p>The RBNZ increased the size of its QE program at its May monetary policy meeting this week by nearly double from $33 billion to $60 billion. Warning over the continued impact of the global economic downturn the RBNZ also warned that negative rates could be necessary in the near term if conditions worsen further.</p>
<p><strong>Fed Dismisses Negative Rates in the US</strong></p>
<p>Fed chairman Powell spoke against the prospect of negative rates in the US this week. While warning that the economic hit from the virus was sharper than initially projected, warning too that the recovery will likely take longer than first thought, Powell said that the Fed was not discussing negative rates and had not seen evidence of them working effectively elsewhere. However, Powell did note that the Fed stands ready to do more if necessary but also called on the government for further fiscal support.</p>
<p><strong>EIA Reports First Inventories Drop Since January</strong></p>
<p>Oil prices found some relief this week as the EIA reported an end to the 15 consecutive weeks of inventory build up in US crude stores. US crude production was also lower over last week, falling by 300k barrels to 11.6 million barrels per day, its lowest level since December 2018. This comes amidst a small pick up in demand as lock-downs ease further in the US.</p>
<h2>Key Events Next Week</h2>
<p><strong>Bailey, Powell &amp; Lowe to Speak</strong></p>
<p>The heads of the BOE, Fed and the RBA are due to speak next week and their comments will be closely watched by markets. Central banks are currently seen on the side-lines as they wait to assess the impact of the ongoing easing in lock-down measures but these comments are valuable for traders looking to gauge the prospect of further action.</p>
<p><strong>Manufacturing PMIs</strong></p>
<p>The next set of manufacturing data from the US and Eurozone are due next week and, In light of the lockdowns which have run throughout the last month, further weakness is expected. Both US and Eurozone manufacturing had fallen to record lows over the prior month and traders will be keen to see whether this downtrend extended further in April.</p>
<h2>Keep An Eye On</h2>
<p><strong>UK Retail Sales Data</strong></p>
<p>UK Retail data due next week will be a key release to watch.  The BOE governor warned this week that no-one can be certain of the true size of the downturn expected though the BOE is currently looking at a 30% drop in GDP. The retail sales component is a good indicator of the GDP print and a weak figure should put further pressure on GBP.</p>
<p><b><i>Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.</i></b></p>
<p><b><i>High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 70% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money</i></b><span>.</span></p>
<p>The post <a rel="nofollow" href="https://blog.tickmill.com/market-analysis/the-friday-forex-takeaway-episode-34/">The Friday Forex Takeaway – Episode 34</a> appeared first on <a rel="nofollow" href="https://blog.tickmill.com">Tickmill</a>.</p>