Focus on several central banks’ meetings this week

European indexes closed lower yesterday on thin trading volume, as the British stock exchange was closed for a public holiday. However, American indices ended up higher after tumbling on Friday.

Growing concerns about global growth weighed on European indices, as Chinese and European PMI figures were lower than expected – indicating potentially weaker upcoming economic growth.

After the RBA interest rates decision, all investors will be focusing on the upcoming Fed meeting, which will result in a new rate hike on Wednesday. But this could bring new comments and clues about how aggressive the FOMC plans to be. The Bank of England will also decide on interest rates later this week.

During central bank meetings, investors should always think about the following:

• Does the rate hike seem more dovish or hawkish than expected?
• How is the overall tone?
• What do the new “dot plot” or other growth projections tools look like?
• What kind of uncertainties did the central bank mention? And will they have a significant impact on their monetary policy?
• What has been said about their balance sheet reduction?
• How does the market react to the announcements?

Some key data and facts from Monday’s trading session:

• CAC 40 = -1.66%
• DAX 40 = -1.13%
• EUROSTOXX 50 = -1.85%
• Dow Jones = +0.26%
• Nasdaq = +1.63%
• S&P 500 =  +0.57%
• Oil = around $107.35 a barrel
• Gold = around $1,860 per ounce
• EUR/USD = around 1.0505
• GBP/USD = above 1.2488
• AUD/USD = above 0.7051
• USD/JPY = above 130.15
• USD/CAD = above 1.2882
• Bitcoin = around $38,450
• Ethereum = around $2,839

• CAD hit its lowest level in 4 months against the USD.
• 10-year treasury yield hit 3% for first time since 2018.
• In April, U.S. factory activity grew at its slowest pace in over a year and a half with the ISM Manufacturing PMI falling to 55.4.
• Investors are still monitoring the geopolitical consequences of the war in Ukraine, especially on commodity prices.
• Worst January-April percentage drop since 1932 for the S&P 500.
• S&P 500 hit its lowest level of 2022 before bouncing back.
• The Nasdaq had its worst month since 2008.
• Gold almost reached a 3-month lows.
• Wheat reached its lowest level in three weeks.
• Yen around its weakest level since 2002.
• EUR/USD still around its lowest level in 6-years.

What else should you monitor this week?

On Tuesday

• Australia – Cash Rate & RBA Rate Statement
• USA – JOLTS Job Openings
• New Zealand – RBNZ Financial Stability Report
• Eurogroup meetings

On Wednesday

• New Zealand – Employment Change q/q
• New Zealand – Unemployment Rate
• USA – ADP Non-Farm Employment Change
• USA – ISM Services PMI
• USA – FOMC Statement, Federal Funds Rate Decision & FOMC Press Conference

On Thursday

• 28th OPEC and non-OPEC Ministerial Meeting
• United Kingdom – BOE Monetary Policy Report, MPC Official Bank Rate Votes & Monetary Policy Summary
• USA – Unemployment Claims

On Friday

• Australia – RBA Monetary Policy Statement
• Canada – Employment Change & Unemployment Rate
• USA – Average Hourly Earnings m/m, Non-Farm Employment Change 7 Unemployment Rate
• Canada – Ivey PMI