Published March 20. 2023 11:24 pm set
Editor in Chief,
NEWSMOVESMARKETSFOREX ®
KEY TAKE AWAYS:
- Potential U.S. Banking Crisis two U.S. Tech Banks were bail out by Regulators on last week Silicon Valley Bank and First Republic Bank
- President Biden Administration assured the American people that it would guarantee uninsured deposits at both banks
- Public Bank of China Leaves Interests unchanged on Monday for the Month of Feb 20, 2023 at 3.65%
- U.S. FED Interest rate decision will take place on Wednesday March 22, 2023 at 2:00 pm EST
- Swiss National Bank, SNB Interest rate decision on Thursday, March 23, 2023 at 1:00 am EST
- Bank of England, BoE Interest rate decision on Thursday, March 23, 2023 at 3:00am EST
- Euro Leaders Summit will take place on Thursday, March 23 2023 at 1:00pn
Monday’s Edition:
Economic recap for The Week Ahead – Preview
Investors brace for what is sure to be an market moving extravaganza of Major economic news event’s that are due to exploded across the wire for this week ahead. Firstly, the People Bank of China conducted it’s Monetary Policy meeting earlier today leaving interest rates unchanged at 3.65%.
Major G7 Central Banks Announce Key Interest Rate Decision Ahead This Week:
Investor’s across the globe are awaiting the major G7 Central Bank Monetary policy Interest rates decision schedule for this week. Please be sure to catch all the latest High Impact Major Market moving News Events on the Forex Weekly Economic Events Recap March 19, 2023.
U.S. FOMC Interest rate decision, Bank of England Interest Rate decision, Swiss National Bank Interest rate decision, G7 European Union Summit Meeting.
We at NEWSMOVESMARKETSFOREX ® presents the latest financial and economic currency news from around the globe.
Economic Geopolitical Events Analysis:
I specially asked world renowned economist Marc Ostwald who is an expert Chief Economist & Global 
Strategist with ADM Investor Services International head quartered in London England, for his pre-market economic analysis and insights on the global major headline economic news events outlook for this week, Mr. Ostwald stated:
Economic Analysis by World renowned ADM Economist Marc Oswald, London England **
The Economic Head liners for the Week Ahead – Preview:
“The banking crisis’ is likely to remain front and center in the new week, and following the weekend
acquisition of Credit Suisse by UBS. The calendar of data and events is dominated by major central bank meetings, with the Fed primus inter pares, and accompanied by BoE, SNB, Norges Bank, while Brazil’s BCB, Nigeria’s CBN and Philippines’ BSP head the run of EM central bank meetings.
The data schedule is overall light, with the UK focused on CPI and Retail Sales, as is Canada, the US looking to Durable Goods Orders, New & Existing Home Sales, and Brazil and Mexico looking to inflation, while the G7 flash PMIs and Germany’s ZEW Expectations head a busy run of surveys.
Politically there is the potential for some future if former US President Trump is indicted and arrested as he has suggested; China’s President Xi is said to be heading to Moscow for a meeting with Putin, while the week ends with a 2-day EU leaders’ summit.
In the commodity space, there will be particular focus on whether the sharp down draft in oil prices continues, with a busy week for conferences headlined by the FT Commodities Summit in Lausanne, while there are also the Euro gas, Australis Domestic Gas Outlook and Rabobank Farm2Fork, as China has Aluminium and Lithium conferences.
The run of commodity reports features the EU MARS Crop Bulletin, USDA Red Meat and Milk Production, and Beef, Pork and Poultry |Cold Storage data, and Brazil’s Unica Cane Crush and Sugar output data. The corporate earnings schedule is light outside of China, which has results from the likes of Chalco, China Mobile, China Meituan, China, Shenhua Energy, China Telecom,
Sinopec, Tencent, Xiaomi and Zijin Mining, with the US’ General Mills and Germany’s RWE fearuting elsewhere. A relatively busy week for govt bond supply has 20-yr & 10-yr I-L, and the UK 4 & 30-yr, while the EU, Germany, Belgium and Finland all hold auctions in the Eurozone.
Despite all the turmoil in the banking sector, none of the major central banks meeting this week are expected to back from further rate hikes, with the Fed and BoE seen hiking 25 bps to 4.75/5.0% and 4.25 respectively, the SNB by 50 bps to 1.50% and Norges Bank by 25 bps to 3.0%; China’s 1 & 5-yr LPR rates are seen unchanged, but last Friday’s 25 bps cut in bank reserve requirements is of greater relevance.
Pausing now would make a resumption of rate hikes more of a challenge, though perhaps less for the BoE, and could run the risk of deepening bank sector contagion fears in markets, given many would ask ‘is there something they know that we don’t?’ While the Fed is obviously wary of contagion risks, it still views the banking sector as being well capitalised, and it will want to stress that the inflation battle is not won, and it remains too high, so a 25 bps hike seems very likely, though like the ECB it will likely stress a high level of uncertainty, and offer no guidance, and emphasize data and financial conditions dependency.
The ‘dot plot’ will probably shift a little higher in terms of peak (5.375% from 5.125%), with growth and inflation forecasts edged up, and unemployment edged down. Powell will likely underline high vigilance on financial conditions, but also inflation still being too high, growth holding up relatively well and the labor market remaining very tight, and an obviously difficult balancing act on financial stability vs. fighting inflation.
He will doubtless face a lot of questions about banking sector risks, whether the Fed and other regulators have been asleep at the wheel in terms of balance sheet risks and accounting practices, and the significance of last week’s jump in Discount Window borrowings.
He will also be at pains to point out that the BFTB program is not QE, as it is based on loans on collateral, and not outright purchases of securities. Ahead of the BoE rate decision, CPI is expected to rebound in m/m terms to 0.6% m/m, which would see the y/y pace ease modestly to a still very high 9.9%, with core CPI seen edging down 0.1 ppt to 5.7% y/y.
January’s downside miss was above all due to some unexpected downward pressure from Services (aboval due to airfares), which is likely to have been a temporary factor, and seen partially unwound this month, which along with food will largely offset a further fall in non-food goods prices.
But with last week’s labor data confirming the labor market remains tight, even if wage pressures appear to have peaked, and given some stimulus from the Budget, the BoE majority is expected to opt for one further 25 bps hike to 4.25%.
Markets are priced for only a 60% probability of one further hike (by August), and see Base Rate at the 4.0% at the end of the year. Whether the BoE hikes or not is perhaps rather moot, the outlook for the UK economy remains challenging on a short to medium term basis, and it is fiscal policy and legislative measures which will ultimately decide whether the many challenges the economy faces will take more or less time to overcome.
Friday’s Retail Sales are seen posting a further modest rise (0.2% m/m) after seeing some unexpected strength (0.5% m/m) in January, and despite some better news on energy prices, household consumption is set to remain very sluggish, with risks for this month’s reading skewed somewhat to the downside of the consensus. As for the SNB, February’s higher than expected CPI predicates expectations of a further 50 bps hike at the SNB’s quarterly policy meeting, though it will obviously be monitoring this week’s market reaction to the UBS acquisition of Credit Suisse, and hoping that financial stability risks start to ease, so that it can revert to focusing on the economy in policy terms.
G7 flash PMIs as the end of the week are forecast to see a modest improvement in Manufacturing, albeit still mostly contracting, and a slight setback in most Services readings. Much may depend on data collection timing, given some risk of contagion effects to non-financial sentiment from the ‘banking crisis’. Prices sub-indices will require particular monitoring, given the easing in both oil and gas prices.
But ultimately the week will be about whether market fear around the banking sector start to ease, which will boil down to hopes that there are not any renewed shocks. Attention will then turn to month and quarter end portfolio rebalancing, particularly after the extreme volatility, as well as whether primary credit markets re-open after being temporarily shuttered due to the aforementioned volatility and contagion risk fears”
“WHATS UP WITH THE MARKET”
Currency Markets today are mostly trading choppy with the U.S. Dollar index currently down on the day at -0.44% DXY trading 103.36 as of this writing.
The DXY Index is trading significantly lower ahead of the FEDs Interests decision o March 20, 2023 Jobs Report down on the day at rate results of 101.84, Check out the full story here in 2021 to compare historical comparative improvements- (U.S. Jobs Report Falls 194,000 Job, Unemployment 4.8% Sep) .
Many of the mainstream currencies are slightly consolidating on the day waiting for the market moving news G7 Central Bank Monetary Policy meeting decisions, EUR up across a currency board spectrum:
EUR stronger than the USD trading at 1.07149 (EURUSD .48% up) CAD stronger than the EUR trading at 1.4648 (EURCAD +0.06% UP) USD Weaker than CAD trading @ 1.36708 (USDCAD -0.41% down), USD weaker than the CHF trading at .9350 (USDCHF .66% up the day). AUD stronger than the U.S. Dollar trading at 0.67084 (AUDUSD .20% up – on the trading day).
We will see what this week ahead highly awaited MARKET MOVING Interest Bank rates decision report numbers brings us. For more Developing intriguing Central Bank Stories be sure to visit our Central Bank Breaking News Here: 
News Moves Markets Forex “real time digital currency news”, works to provide market intelligence, connecting our audience with a mix of the most latest insightful currency news in the Foreign exchange markets. Providing the Latest and the greatest in depth developing global central bank stories and financial news to traders and investors around the continent.
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Expert Economist: Marc Ostwald an expert Chief Economist & Global Strategist with ADM Investor Services International Marc Osterwall is a world renowned Expert Economist who Analyzes and forecast macro/microeconomic trends and central bank policies on a exponential economic level. Mr. Osterwall is a regular guest on Bloomberg BNN, HT & Radio, BBC, CNBC, Le Fonti International and is widely quoted on newswires, newspapers, and other digital media worldwide. He is also a regular conference speaker and guest lecturer at various universities. Reference: U.S. Bureau of Labor and Statistics. (2023). Employment Situation Summary Retrieved from https://www.bls.gov/news.release/empsit.nr0.
