Forex Investment and Currency Trading

Norges Bank Rate Decision - Release: Oct 28

The Norges Bank is scheduled to announce its latest rate decision on Wednesday 28th October, alongside which it will also release its third and final Monetary Policy Report for 2009. Market forecasts the Norges Bank to announce a rate hike at this meeting. The recent Regional Network Report, on which the Norges Bank has stated it places great emphasis when reaching rate decision, was notably more upbeat on output, and the negativity highlighted by contacts on the price front was somewhat overshadowed by the release of September CPI inflation data which showed the underlying rate rising back up. In addition to these data, the recent Government Budget was more expansionary than the Riksbank had forecast and will offer a looser fiscal bias the Bank may want to offset through a more aggressive monetary stance.

RBNZ Rate Decision - Release: Oct 29

A number of central banks have currently promised to keep policy rates unchanged well into 2010, not least in an attempt to counter the threat of excessive currency strength. The RBNZ is one such Bank with a pledge to keep the OCR at an historic low of 2.50% through to end/10. However, market suspects that the recovery tailwinds from Asia on top of a budding domestic recovery driven by all the wrong areas such as housing and consumption against the background of relatively sticky inflation will leave the current level of policy rates looking increasingly inappropriate. Market expects the RBNZ rhetoric to start to shift, perhaps starting next week, and would not rule out the adoption of a tightening bias at the detailed Dec MPS with a tightening cycle beginning in Q2 2010, if not earlier.

US GDP - Release: Oct 29

Market expects US Q3 GDP to increase 2.6% saar, the first quarterly expansion since Q2/08 and following contractions of 6.4% and 0.7% in Q1/09 and Q2/09 respectively. The Q3 rise is due in large part to the cash for clunkers program, which boosted auto spending. Overall, consumer spending is also expected to increase 2.6%. Top-line growth is also expected to be boosted by a slowing pace of inventory drawdown and an acceleration in residential investment.