RBC Capital Markets

Day ahead: The FOMC policy announcement and Powell’s press conference dominate the day ahead. The data calendar is light, but there are several central bank speakers, including ECB President Lagarde and Riksbank Deputy Governor Breman (see table below). Tech companies dominate the earnings calendar (Apple, Facebook, eBay all due today).

FOMC: Our economists think the FOMC meeting is likely to come and go with little material change. Still, some alternations seem in order. Indeed, the backdrop has clearly strengthened over the intermeeting period, so saying something more than indicators “have turned up recently” would certainly seem appropriate. We wouldn’t necessarily read into that more than what it is—a reasonable marking‐to‐market of where we are at the moment. As for the press conference, Powell’s tone is also unlikely to change much at this point. He recently said that the Fed is unlikely to start lifting rates before 2022. While we think that view will be challenged over the coming year, the Chair is likely to continue pressing this idea.

Citi

Asia has seen another negative leaning session for risky FX, with the USD continuing to find a bid in line with higher US yields overnight, and ahead of the FOMC and President Biden’s congressional appearance today. AUD is the main underperformer in Asia, not helped by a CPI miss. GBP and JPY are also under particular pressure, though mainly reflect a stronger USD. In EM, most currencies have so far traded unchanged in Asia in contrast to G10 counterparts.

Given the FOMC and Biden will take center stage today, other data including NOK, SEK and CAD retail sales, and ECB speak are likely to be overlooked, with the exception of ECB’s Lagarde. In EM, there is little of note today.

FOMC: We expect the April FOMC to mostly stay the course, acknowledging a more positive outlook without sending new policy signals. We expect only minor changes to the Statement and press conference to acknowledge positive recent data. A hawkish surprise would be if the Fed acknowledged progress more prominently, paving the way to an advance warning of tapering asset purchases.

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.