US, Eurozone, Japan Rate Decisions Loom

The week begins with markets looking forward to rate decisions from the central banks overseeing the US Dollar, the Euro, and the Japanese Yen.

1. There will be policy meetings this week at the US Federal Reserve, the European Central Bank, and the Bank of Japan. It is expected that all but the ECB will leave rates unchanged, but with last week’s surprise hikes by the Reserve Bank of Australia and the Bank of Canada, the meetings are more keenly awaited. There will likely be high volatility this week from Wednesday at the latest.
2. Global stock markets look bullish, with several global stock market indices reaching new 1-year highs, including the S&P 500 Index and the NASDAQ 100 Index.
3. In the Forex market, the US Dollar has opened the week a bit stronger, and rising. Since the weekly open, the Australian Dollar has been the strongest currency, and the New Zealand Dollar the weakest. Trend traders will probably still be looking for long trades in the USD/JPY currency pair which recently reached a new 6-month high price.
4. The Turkish Lira is falling to another record low yesterday, after undergoing a fresh weakening ever since President Erdogan’s election victory started to look likely.
5. Cocoa futures continue to reach multi-year highs, standing out in the commodities market.
6. There are no major releases scheduled today so it may be a typical quiet Monday in the market.