{"id":63306,"date":"2023-05-18T17:12:09","date_gmt":"2023-05-18T07:12:09","guid":{"rendered":"https:\/\/www.icmarkets.com\/blog\/?p=63306"},"modified":"2023-05-18T17:12:09","modified_gmt":"2023-05-18T07:12:09","slug":"ic-markets-europe-fundamental-forecast-18-may-2023","status":"publish","type":"post","link":"https:\/\/www.icmarkets-vnk.com\/blog\/ic-markets-europe-fundamental-forecast-18-may-2023\/","title":{"rendered":"IC Markets Europe Fundamental Forecast | 18 May 2023"},"content":{"rendered":"\n<p><strong>IC Markets Europe Fundamental Forecast | 18 May 2023<\/strong><\/p>\n\n\n\n<p><strong>What happened in the Asia session?<\/strong><\/p>\n\n\n\n<p>The figures provided for Australian Employment Change are -4.3K (lower than the forecasted 24.8K and the previous 61.1K), indicating potential job losses. For the Unemployment Rate, the actual figure of 3.7% is higher than the forecasted and earlier figures of 3.5%. These unfavourable indicators suggest a weakening labour market, potentially leading to a depreciation of the AUD.<\/p>\n\n\n\n<p><strong>What does it mean for the Europe &amp; US Sessions?<\/strong><\/p>\n\n\n\n<p>A dovish BoE perceived from the upcoming Monetary Policy Report Hearings may sink the Cable to retest the recent lows of around 1.2420. Otherwise, a break above 1.2500 could see another push-up to the recent highs of about 1.2540.<\/p>\n\n\n\n<p>The Lonnie willy likely maintains a sideways range between 1.3400 and 1.3530 before BoC Governor Macklem\u2019s press conference about the Financial System Review.<\/p>\n\n\n\n<p><strong>The Dollar Index (DXY)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>Unemployment Claims<\/p>\n\n\n\n<p><strong>What can we expect from DXY today?<\/strong><\/p>\n\n\n\n<p>The forecasted US Unemployment Claims are 253K (previous: 264K), Philly Fed Manufacturing Index is -19.5 (previous: -31.3), and Existing Home Sales are 4.30M (last: 4.44M). Positive surprises in the data could strengthen the USD, while disappointing figures may weaken it.<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The committee raised the target range for the federal funds rate to 5 to 5-1\/4 per cent. The U.S. banking system is sound and resilient.<\/li>\n\n\n\n<li>Tighter credit conditions for households and businesses may weigh on economic activity, hiring, and inflation.<\/li>\n\n\n\n<li>The committee is committed to returning inflation to its 2% objective<\/li>\n\n\n\n<li>The committee will adjust monetary policy as appropriate if risks emerge that could impede the attainment of goals<\/li>\n\n\n\n<li>Next meeting is on 14 June 2023<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Mixed<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Gold (XAU)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news events.<\/p>\n\n\n\n<p><strong>What can we expect from Gold today?<\/strong><\/p>\n\n\n\n<p>The anticipation of higher US interest rates for longer due to the Fed\u2019s hawkish stance has led to a decline in gold prices. However, the concerns over the US debt ceiling should increase the demand for gold as a hedge against market volatility.<\/p>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Mixed<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Australian Dollar (AUD)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>Employment Change<\/p>\n\n\n\n<p>Unemployment Rate<\/p>\n\n\n\n<p><strong>What can we expect from AUD today?<\/strong><\/p>\n\n\n\n<p>The upcoming data releases for Australia&#8217;s employment change, with a forecasted figure of 24.8K (previous: 53.0K), and the unemployment rate, remaining stable at 3.5% (prior: 3.5%), are expected to impact the AUD moderately. The job market&#8217;s health and the overall economy will be assessed based on the employment change figure. If the release exceeds expectations, indicating a more robust job market, it could positively affect the AUD. Conversely, falling short of expectations may negatively impact the currency.&nbsp;<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Official Cash Rate was increased by 25 basis points to 3.85%.<\/li>\n\n\n\n<li>Inflation in Australia has passed its peak but remains high at 7%, and it may take some time to return to the target range.<\/li>\n\n\n\n<li>GDP is forecast to increase by 1.25% this year and around 2% over the year to mid-2025.<\/li>\n\n\n\n<li>Next meeting on 6 June 2023<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Weak bullish<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Kiwi Dollar (NZD)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>Annual Budget Release<\/p>\n\n\n\n<p><strong>What can we expect from NZD today?<\/strong><\/p>\n\n\n\n<p>The upcoming data releases from the New Zealand dollar include the PPI Input q\/q, with a forecasted growth of 0.5% (previous quarter: 0.5%), and the PPI Output q\/q, expected to rise by 0.8% (last quarter: 0.9%). These figures suggest stability and a positive economic outlook. The Annual Budget Release will also provide insights into the government&#8217;s fiscal policies and spending plans.&nbsp;<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>OCR increased by 50bps from 4.75% to 5.25%<\/li>\n\n\n\n<li>Recent severe weather events in the North Island have led to higher prices, increasing the risk of inflation expectations exceeding the target range.<\/li>\n\n\n\n<li>New Zealand\u2019s economic growth is expected to slow through 2023 due to the slowing global economy, reduced residential building activity, and the ongoing effects of monetary policy tightening.<\/li>\n\n\n\n<li>Next meeting is on 25 May 2023<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Weak bullish<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Japanese Yen (JPY)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news events.<\/p>\n\n\n\n<p><strong>What can we expect from JPY today?<\/strong><\/p>\n\n\n\n<p>The upcoming release of Japan&#8217;s Trade Balance data, with a forecasted improvement from the previous deficit of -1.21 trillion JPY to -1.08 trillion JPY, is expected to have a mixed impact on the Japanese yen. A negative trade balance suggests that Japan is importing more than it is exporting, which can put downward pressure on the currency.&nbsp;<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The bank will continue with QQE with Yield Curve Control to achieve the price stability target of 2%&nbsp;<\/li>\n\n\n\n<li>Japan&#8217;s economy is expected to recover gradually<\/li>\n\n\n\n<li>The bank will not hesitate to take additional easing measures if necessary<\/li>\n\n\n\n<li>Next meeting is on 15 June 2023&nbsp;<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Mixed<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Euro (EUR)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news events.<\/p>\n\n\n\n<p><strong>What can we expect from EUR today?<\/strong><\/p>\n\n\n\n<p>Due to a bank holiday, the price direction for EUR is expected to be influenced by the upcoming release of German PPI data. The forecasted figures indicate a month-on-month decrease of 0.5% and a significant drop of 2.6% compared to last year. However, trading volumes may be low, so caution should be exercised.<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The ECB has decided to raise the three key interest rates by 25 basis points as the inflation outlook continues to be too high for too long.<\/li>\n\n\n\n<li>The ECB will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction.<\/li>\n\n\n\n<li>Renewed financial market tensions and Russia&#8217;s war against Ukraine remain significant economic downside risks.<\/li>\n\n\n\n<li>The continued resilience of the labour market could lead to higher growth than anticipated.<\/li>\n\n\n\n<li>Next meeting on 15 June 2023<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Mixed<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Swiss Franc (CHF)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news events.<\/p>\n\n\n\n<p><strong>What can we expect from CHF today?<\/strong><\/p>\n\n\n\n<p>Due to the bank holiday, the CHF price direction will likely depend on previously released PPI m\/m data: actual &#8211; 0.2%, forecasted &#8211; 0.1%, previous &#8211; 0.2%. The impact is expected to be mild since the change in the data was small.<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Raised policy rate to 1.5% to counter inflationary pressure and ensure price stability. The SNB may need to raise the policy rate further in the future<\/li>\n\n\n\n<li>The SNB is providing liquidity assistance to Credit Suisse, and the crisis has been halted<\/li>\n\n\n\n<li>The new inflation forecast assumes a policy rate of 1.5% and puts average annual inflation at 2.6% for 2023 and 2.0% for 2024 and 2025.<\/li>\n\n\n\n<li>Mortgage and real estate market vulnerabilities persist<\/li>\n\n\n\n<li>Next meeting on 22 June 2023<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Mixed<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Pound (GBP)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>Monetary Policy Report Hearings<\/p>\n\n\n\n<p><strong>What can we expect from GBP today?<\/strong><\/p>\n\n\n\n<p>The upcoming UK Monetary Policy Report Hearings hold significant implications for the British pound GBP. The GBP is likely to appreciate if central bank officials signal a hawkish stance, indicating a potential tightening of monetary policy. Conversely, a dovish tone suggesting a more accommodative monetary policy may pressure the GBP downwards.&nbsp;<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The MPC of the BoE voted 7-2 to increase Bank Rate by 0.25 percentage points to 4.5%.<\/li>\n\n\n\n<li>The updated projections show that CPI inflation is expected to decline slightly above 1% at the two and three-year horizons, below the 2% target.<\/li>\n\n\n\n<li>CPI increased unexpectedly but is expected to fall sharply over the rest of the year due to lower energy prices.<\/li>\n\n\n\n<li>Next meeting on 22 June 2023&nbsp;<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p><strong>Mixed<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Canadian Dollar (CAD)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news events.<\/p>\n\n\n\n<p><strong>What can we expect from CAD today?<\/strong><\/p>\n\n\n\n<p>The Bank of Canada BOC Financial System Review and a speech by BOC Governor Macklem are scheduled. The Financial System Review assesses the stability of the Canadian financial system, while Governor Macklem&#8217;s speech offers insights into the central bank&#8217;s outlook. These events can influence investor confidence and affect the CAD.<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Bank of Canada holds its target for the overnight rate at 4.5%<\/li>\n\n\n\n<li>Labour markets remain tight with persistent price pressures, especially for services<\/li>\n\n\n\n<li>Economic growth in Q1 looks to be stronger than projected; to be weak through the remainder of this year before strengthening gradually next year<\/li>\n\n\n\n<li>Prepared to increase the policy rate further to return inflation to the 2% target.<\/li>\n\n\n\n<li>Next meeting on 7 June 2023<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Mixed<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Oil<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news events.<\/p>\n\n\n\n<p><strong>What can we expect from Oil today?<\/strong><\/p>\n\n\n\n<p>According to the EIA, US crude stockpiles have unexpectedly risen by 5 million barrels, contradicting earlier predictions of a drawdown of 1.5m barrels. This increase signals a potential imbalance in the oil market, as the IEA forecasts that global demand will surpass supply by 2 million barrels per day. The rise in stockpiles could lead to downward pressure on oil prices.<\/p>\n\n\n\n<p>Next 24 Hours Bias<\/p>\n\n\n\n<p>Weak bearish<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n","protected":false},"excerpt":{"rendered":"<p>IC Markets Europe Fundamental Forecast | 18 May 2023 What happened [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":62297,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[196,215,339],"tags":[],"class_list":["post-63306","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fundamental-analysis","category-market-analysis","category-recent-posts"],"_links":{"self":[{"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/posts\/63306","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/comments?post=63306"}],"version-history":[{"count":2,"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/posts\/63306\/revisions"}],"predecessor-version":[{"id":63332,"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/posts\/63306\/revisions\/63332"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/media\/62297"}],"wp:attachment":[{"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/media?parent=63306"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/categories?post=63306"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/tags?post=63306"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}