This week will have a busy calendar, including a number of central bank policy meetings – the highlight being the FOMC meeting.
The Federal Reserve is not expected to take any action at this meeting on Wednesday and interest rates will likely remain on hold. But the policy statement will be closely watched for any clues as to when the central bank is likely to tighten monetary policy further. The FOMC event will be a high risk for the US dollar, which will likely become very volatile during the announcement.
Meanwhile, also out of the US will be the preliminary first quarter GDP results are published on Thursday. Forecasts are for the Q1 results to show a reading of 0.8% annualized growth compared to the Q4 (2014) reading of 1.4% annualized growth. Such a disappointing number would likely diminish expectations of more rate hikes this year.
GDP results are out of the UK next week that would likely have an impact on the British pound. The Office for National Statistics releases preliminary first quarter GDP results on Wednesday. They are expected to show a 0.4% rise in GDP in the first quarter of this year, down from 0.6% in the closing quarter of last year. This will likely bring to attention how business confidence may have been unsettled by the Brexit vote.
From the Eurozone, we will get inflation and unemployment numbers. The jobless rate for the region as a whole fell to 10.3% in February, its lowest since August 2011. Meanwhile, consumer prices were flat in March, following a brief slip into deflation in February. Preliminary CPI results for April will be out on Friday.
Apart from the Fed, other central bank meetings scheduled for next week will be the Bank of Japan and the Reserve Bank of New Zealand meetings, both on Thursday.