FX Week Ahead: ECB And BoJ Meetings

ECB and BoJ Meetings

As the markets head into the final week for the month of April, the economic calendar continues to steam ahead with lot of economic releases. Central bank meetings take the spotlight this week with both the European Central Bank and the Bank of Japan lined up.

No changes are expected from either of the central bank meetings this week. However, the forward guidance and the language from the respective central bank statements will be crucial in guiding the markets in the near term.

The Swedish Riksbank will also be holding its monetary policy meeting this week. No changes are expected to the interest rates but the central bank is expected to come out slightly dovish given the recent slowdown in inflation and the overall weakness in the housing sector.

On the economic front, the GDP releases will be the main theme. GDP reports from the U.S., the UK and the Eurozone (France and Spain) are expected this week, covering the first quarter of the year. Overall, the GDP reports are expected to show that economic expansion continued to pace ahead at a steady pace.

Data from the Eurozone, besides the ECB meeting and the GDP release, will also feature the flash manufacturing and services PMI reports. Given the slowdown during the first quarter, investors will be looking to see how the Eurozone economy fared during the month of April.

Here’s a quick recap of the ECB and BoJ Meetings and other key economic events due this week.

ECB and BoJ to remain on the sidelines

The European Central Bank will be holding its monetary policy meeting this Thursday. The ECB is expected to keep all the key interest rates and the central bank’s quantitative easing program unchanged at this month’s meeting.

Investors will be looking to the press conference and the ECB’s monetary policy statement to ascertain what the next policy move could be. The current QE program is scheduled to run its course until the end of December this year. However, given the recent slowdown in inflation and a possible weaker GDP growth during the first quarter could keep officials to remain cautious.

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