Global market overview for 12/06/2017:
In the wake of the UK general election, let's take a look at the most important economic events this week.
Monday, 11th of June
This is the day when the exit polls of the French parliamentary elections will be counted and officially announced later in the day. It is hard to expect that the outcome has affected the markets as significantly as Britain's recent voting or even the recent election to the Elysee Palace, but markets will surely keep an eye on this event.
Tuesday, 12th of June
Tuesday is primarily data release day from two big European economies. First, a CPI reading for the UK will be published, which will be interesting for two reasons. Firstly, recently this index exceeded the target set by the BoE, and secondly, the publication is preceded by a Thursday's decision on interest rates. Another indicator of interest is German ZEW index and market participants expect another strong reading here. Estimates show an increase from 20.6 to 21 points.
Wednesday, 13th of June
Monday and Tuesday, however, can be considered barely as an appetizer compared to the Wednesday feast. It is Wednesday that is just "the day" in which the Fed is expected to raise interest rates in the US. Any other decision would be a surprise. The Fed Watch Tool calculates that the probability of an increase of 25 bps is 99.6% which means that a better illustration of consensus can not be imagined.
Thursday, 14th of June
For this day the Greek theme will return again as there is a scheduled meeting of Athens with the Eurogroup. Besides, there will still be a lot going on around central banks as the decisions regarding the rates will be made in Switzerland and the UK. Whilst no one expects a revolution, the BoE Meeting Minutes and Thomas Jordan's speech may, however, appear to be indicative of a further action by these institutions.
Friday, 15th of June
On Friday there will be further decisions by central bankers. The most important country that will announce interest rates decision will be Japan. Moreover, an important reading, especially in the context of the ECB's recent decision, will be Consumer Price Index news release in the Eurozone.
Let's now take a look at the USD/JPY technical picture on the H4 time frame before the FED interest rate decision. As the interest rate is almost 100% certain, only a lack of this action by FED would push this pair below the important technical support at the level of 109.08. The golden trend line, that provides a dynamic resistance for the price, should be broken and the market should re-test the level of 111.67 after the FED decision.
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