Lagarde says difficult times have come, and the ECB raised the rate not to cause a recession but to stabilize prices. Read the report to learn the freshest news of the day!
Important event for USD: Producer Price Index
What will happen?
The US will publish the Producer Price Index (PPI) on December 14, Tuesday, at 15:30 GMT+2 (MetaTrader time).
Why is it important?
PPI is a leading indicator of inflation which shows the change in the price of finished goods and services by producers. Bigger charges by producers lead to higher costs for consumers and push inflation up. The higher inflation is – the greater the probability that the Federal Reserve will increase the rates. Higher rates, in turn, will push the US dollar up and gold down. This report has become especially significant as the Fed will meet already on December 15, where it may announce the rate hike.
What happened last time?
Last time, the PPI was 0.6% – exactly as analysts expected. It raised concerns that the Fed could leave the rates at the current lows for longer – a bearish factor for the greenback. Thus, the USD dropped and EUR/USD surged by 230 points after the report.
Note that when the USD rises, EUR/USD falls as the USD is a quote currency.
How to trade on PPI?
Open the economic calendar a few days before and check the forecast. If it is significantly higher than the previous figures, the USD can start rising before the event, and vice versa. Then, wait for the actual results to come out.
- If the actual figures exceed forecast levels, the USD will rise.
- If the release disappoints, the USD will fall.
Instruments to trade: all the major pairs and XAU/USD
ECB is ready to take the decision about the key rate. What to expect from officials? Oil prices are high, and economy indicators demonstrate the slowing down in the strongest European economies.
The Fed is going to take a decision about the interest rate. This is the crucial news for the following week. What's going on in the markets and what to expect?
Today's main event for the markets is the FOMC Interest Rate Decision, where the US regulator is widely expected to keep the interest rate at the same level of 5.5%.
In today's market insights, we delve into Citibank's oil price predictions, the evolving competition between Huawei and Apple, the Saudi Arabia-Tesla partnership, and the upcoming rate decisions from the world's major central banks.
It will be the hottest week of September, with four central banks’ meetings, five PMI releases, and a lot to trade.