The US Federal Reserve left the key rate unchanged. The US Federal Reserve left its key rate unchanged FRS meeting in June

Meetings of the Central Banks of the world during the year for any trader is important event, which helps not only to earn, but also to assess the economic situation in a particular country. The Central Bank is the main regulator, which is a barometer of the health of the economy. Meetings that take place at different periods annually and the minutes, which are later published, give analysts, investors and just traders guidance in the future value of the national currency, as well as prospects for managing the economy in the current year.

This review provides a calendar of meetings of the Central Banks of the world for the current 2017, indicating the exact dates of these events.

US Federal Reserve Fed (FOMC) meeting for 2017

The US Federal Reserve (Federal Reserve System) holds a two-day meeting, the result of which is a decision on the interest rate. It is important to note that an active reaction is observed not only when the meeting of the Central Bank is completed and the decision is published. But even after three weeks, when the minutes of the meeting are published, the so-called "minutes" or Minutes of the meeting. The interest rate decision has the greatest influence on the dynamics of world stock exchanges, and the time of holding

Monetary Policy Committee meeting schedule US Fed,

(Federal Reserve Fed)

Bank of England (BoE) meeting for 2017

The Bank of England meets monthly for two days and decides on the interest rate and monetary policy. The official protocol is published two weeks after the Central Bank announced its decision. The publication of minutes has the same strong influence on the financial markets as the meeting itself. A special feature is that the publication of the minutes of the last meeting is published on the same day as the current meeting. Thus, the protocol data reflects the previous decision taken by the Central Bank.

Bank of England meeting schedule

(Bank of England,BoE)

Meeting of the European Central Bank (ECB) for 2017

The decisions of this regulator, which are made at the meeting, have a strong impact on all European currencies, as well as stock indices in the region. The meeting is held by the Governing Council of the European Central Bank, and it also makes important decisions on monetary policy.

Schedule of meetings of the European Central Bank,

(European Central Bank,ECB)

Bank of Japan (BoJ) meeting for 2017

The Bank of Japan is an independent structure from the Ministry of Finance and implements monetary policy in the country by changing interest rate refinancing. At this rate in the future commercial banks can raise and allocate funds. During the year, the Central Bank holds meetings at which decisions on monetary policy are made. It is noteworthy that earlier the bank's governing board held 14 meetings during the year, but in 2016 their number was reduced to eight.

Bank of Japan meeting schedule

(European Central Bank,ECB)

Meetings of the National Bank of Switzerland (Swiss National Bank, SNB) for 2017

The Swiss National Bank holds meetings quarterly, followed by a press conference of representatives of the regulator, where the decision on monetary policy is announced.

Schedule of meetings of the National Bank of Switzerland,

(Swiss National Bank, SNB)

Bank of Canada (BOC) meetings for 2017

Bank of Canada (BOC) meetings are held by a board of directors, consisting of a governor and five deputies, whose purpose is to make decisions on monetary policy.

Bank of Canada meeting schedule,

(Bank of Canada, B.O.C.)

Reserve Bank Board (RBB) meetings for 2017

The Reserve Bank Board of Australia decides on the interest rate and regulation of the country's monetary policy. Council meetings are held 11 times a year, every first Tuesday of the month except January. As a rule, one of the meetings is held in Melbourne, the other 10 in the Australian capital Canberra. The minutes of the meetings are published two weeks after each meeting of the Council of the Bank.

Schedule of meetings of the Board of the Reserve Bank of Australia,

(Reserve Bank Board)

Reserve Bank of New Zealand (RBNZ) meetings in 2016

The Reserve Bank of New Zealand (RBNZ) meets eight times a year to decide on interest rates and future monetary policy. The meeting is held one day, and the results are known by the evening at 20:00 GMT.

Schedule of meetings of the Reserve Bank of New Zealand,

(Reserve Bank of New Zealand, RBNZ)

According to the forecast of the analytical company CME Group, at a meeting on June 13-14, the US Federal Reserve () will raise the key rate again - for the third time in a row in seven months. Experts estimate the probability of this at 99.6%.

In addition, economists expect the regulator to make at least one more rate hike before the end of the calendar year.

Weak inflation and relatively weak growth in the first quarter of 2017 will not change the view of the US central bank that a rate hike is reasonable given the low unemployment rate. Also, following the results of the two-day meeting, updated economic forecasts will be published, and the Fed chairman will hold a press conference.

“I think they are going to raise rates and will continue to stick to the current course”, says Ryan Sweet, an economist at Moody's Analytics.

Earlier, Fed officials said they were not worried about the strength of the economy. The regulator considers the weak growth in the first quarter to be temporary and believes that inflation will continue to move towards the target of 2%, according to Marketwatch.

A member of the Fed's Monetary Policy Committee (FOMC) noted in a recent speech that

inflation has been below the target for the past five years, so now it "does not make sense" to lose patience and wait for it to accelerate immediately,

quotes policy from The Economic Times.

June 14 will be published May reports on the dynamics of consumer prices and retail sales, but these data are unlikely to affect the rate hike in June. However, if the results turn out to be significantly weaker than expected, this could jeopardize the rate hike in September and potentially change the tone of the Fed's statement, said UBS economist Seth Carpenter.

Experts express a much less consistent position regarding the Fed's plans to reduce the volume of treasury and mortgage bonds on its balance sheet, the value of which now exceeds $4.5 trillion.

The main question is when can the reduction start, in September or December? Analysts are going to evaluate whether the Fed will change the language of its policy statement about plans to maintain balance "until the level of the federal funds rate is normalized." If the Fed says that normalization is “in full swing”, this will be a “clear marker” according to which the balance sheet reduction will begin as early as September, Seth Carpenter is sure.

The President of the Federal Reserve Bank of Philadelphia spoke about the possibility of reducing the volume of bonds on the balance sheet in January, who considered the key point to increase the base interest rate to 1% (since March it has been in the range of 0.75-1%). However, most economists do not expect such drastic changes in the regulator's plans and are counting on the start of the reduction in December. In any case, experts are confident that Fed Chair Janet Yellen will start the cut program before her term expires at the beginning of next year writes CNBC.

Economists believe the Fed will make another rate hike this year and three more in 2018, bringing the federal funds rate to 2.1% by the end of 2018.

However, there are doubts in the market about the increase base rate at the September meeting: the probability of this is now estimated at only 23%.

UBS believes that the probability of a twofold increase in the rate during 2019 (and, accordingly, no further increases in 2017) is 40%.

A number of experts believe that

the rate increase in September will be prevented by another achievement of the US government debt ceiling, which can be frozen at $20 trillion.

On Monday, June 12, US Secretary of the Treasury Stephen spoke about this problem. “If, for whatever reason, the Congress does not begin to act before August, we will be able to use contingency plans to finance the government. Therefore, I want to make it clear that the time frame will not create a serious problem. However, the markets do not want to wait for us, and the problem of public debt should be solved now, ”Mnuchin said.

The event will contain a number of points that investors should pay attention to. It should be noted that neither the Fed's digital forecasts nor Janet Yellen's press conference are scheduled this time.

. Interest rates. In March, the key rate was increased by 0.25% to 0.875% (range 0.75-1%), the third revision since December 2008. This time, no changes in monetary policy are expected. This will not come as a surprise, the Operations Committee on open market The Fed (FOMC) traditionally adheres to a policy of active action, preferably at the so-called pivotal meetings, which May is not (). Worthy of note is the Fed's view of future prospects monetary policy.

In detail

. General state economy- can be assessed as a temporary (preferably) weakening. According to the first assessment, in the 1st quarter. UWB GDP added only 0.7%. The dynamics is the worst in three years. In the 4th quarter. In 2016, the growth rate was 2.1%. Note that while the US macro data is not too encouraging. The Citi Macro Surprise Index, which shows how much the actual data differs from the forecast, has collapsed sharply over the past couple of weeks.

Source: Zerohedge

These data are mainly for the weak 1st quarter. On the 2nd quarter. Analyst consensus assumes a 2.7% increase in the US economy, and the Atlanta Fed (GDPNow service) +4.3%. It is noteworthy that in the 1st quarter. GDPNow initially predicted +2.5%, the estimate gradually slipped to +0.2%. If there are no positive changes in the April data, then there is a factor against raising Fed rates in the near future.

. Labor market- perhaps one of the key factors that the Fed is guided by in the current conditions. The situation on the labor market, observed in March, looks ambiguous. In general, the segment is close to the state of the so-called "full employment". One part of the report, based on surveys of households, indicated a decrease in unemployment from 4.7% to 4.5%, while analysts expected it to remain at 4.7%.

At the same time, payrolls showed a very weak growth of jobs outside the agricultural sector by only 98 thousand compared to the forecasted 180 thousand. It must be understood that non-farm payrolls are periodically subject to serious revisions. Medium wage compared to February added 0.2%. On an annualized basis, the indicator rose by 2.7%, not far from +3%, at which the Fed would be more confident in raising rates.

. Inflation. The figures are close to the Fed's target of 2%, but in Lately cooled down a bit. Thus, the growth of the Fed-loved price index of consumer spending in March y / y amounted to 1.8%. Core PCE (excluding food and energy, which are volatile components) rose 1.6% year-over-year. In March, the Consumer Price Index increased by 2.4% after +2.7% in February. The weakening of oil prices affected, the main culprits are US oil and gas companies, which are actively increasing production.

As a result of the December meeting, the Fed predicted 3 stages of increasing the key rate by 0.25 percentage points. for this year - up to 1.4%. According to the derivatives segment (CME FedWatch), the next (after March) increase in the fed funds rate should be expected in June, and then in December.

This is not surprising, because the future prospects for monetary policy in the US are now especially important.

The event will contain a number of points that investors should pay attention to. At 21:00 Moscow time, the regulator's statement will be published and updated forecasts of the Open Market Committee (FOMC) will be presented. Jerome Powell's press conference will take place at 21:30 Moscow time. Now, speeches by the head of the Fed are held after each meeting, and not four times a year, which is aimed at improving communication between the Fed and market participants.

Main settings

This time it is assumed that the key rate will be left unchanged, at the level of 2.25-2.5%. A look into the future is important - an assessment of the prospects for monetary policy in the United States. With a high degree of probability, market participants are planning to reduce the key rate this year.

In addition, in May, the “QE in reverse” program began to be phased out, which was a way to reduce the Fed's balance sheet, and therefore a measure of monetary tightening. The program should be completed at the end of September. From October, part of the funds received from expired mortgage securities will be directed to the purchase of US government bonds, which will play in favor of lowering market interest rates.

In detail

. General state of the economy— at the beginning of May, the Fed assessed it as a “solid” growth after more early characteristics about slowdown. In Q1, US GDP added 3.1% (q/q). However, in the future, a more consistent slowdown is possible due to increased protectionism and problems in the global economy. According to the forecast of the Atlanta Fed, known for the most recent estimates as part of the GDPNow service, a 2.1% increase in GDP is expected for the second quarter.

The US economy is in the late stage of the economic cycle. noticeably inverted (inverted) in the middle segment. In the period up to 10 years, we are talking about an inversion of more than 80%. This may be a signal foreshadowing a US recession with a 1-2 year time lag.

. Labor market- perhaps one of the main factors that the Fed focuses on. The key report on the US labor market for May played in favor of strengthening expectations for the Fed's rate cut. The number of people employed outside of agriculture. sector (non-farm payrolls) increased by only 75 thousand. At the same time, +200 thousand is considered normal for a strong labor market. These are data for the month, but the beginning of negative trends is possible.

. Inflation. In a statement issued following the previous meeting, the regulator said that inflation is likely to remain around the 2% target. However, the reality may be different. In April, the regulator's favorite indicator - the consumer spending price index (PCE Price Index) - showed an increase of 1.5% per annum, and the basic version of the index (cleared from food and energy) increased by 1.6%. More recent data - in May, consumer inflation (CPI) was 1.8% per annum compared to 2% in April, producer inflation also slowed down.

Earlier, the Fed pointed to stability in long-term inflation expectations, despite the growing national debt, which exceeded the mark of $22 trillion. According to the inflation-protected bond segment (TIPS), inflation expectations in the United States for the next 5 years are 1.85% per annum. Back in September, 2.3% were observed. However, then inflation expectations sank along with oil prices, and also because of general economic risks.

. The impact of the dollar. Dollar Index (DXY) in recent months consolidated. The dollar bounced off multi-year lows last year, and many US corporations pointed to unfavorable changes in exchange rates for financial results. I would like to note the high spreads between the yields of US and German government bonds. The eurozone economy is unbalanced, and the yields of short and medium issues of many government bonds in the region are negative, which plays in favor of the strengthening of the dollar against the euro. Also, the growth of the American can be facilitated by the exit from risks in case of increased turbulence on financial markets. So the Fed is better off trying to keep the US stock market from collapsing.

Dollar index chart from 2016, weekly timeframe

. Risk assessment. At the beginning of the year, the Fed removed the wording about the balance of risks for the prospects for the development of the American economy. The regulator notes the global economic and financial situation. It's about First of all, about the slowdown in the global economy, which is clearly visible on the charts of industrial business activity indices of the Eurozone and China. Deteriorating conditions foreign trade hit many countries, in particular, Germany. In the second quarter, the Bundesbank predicts a slight decline in the German economy. The Fed will evaluate current and projected economic conditions in the United States, focusing on employment and inflation targets, data from financial markets and "from abroad".

Monetary Policy Forecast

Attention is on the Fed statement, FOMC digital forecasts and the subsequent speech by Jerome Powell. Earlier, the head of the regulator promised to stimulate the US economy if necessary.

According to the March forecast, for 2019 the FOMC planned to keep the key rate unchanged, at the level of 2.25-2.5%. According to the derivatives segment (CME FedWatch service), with a high probability, market participants expect three stages of rate cuts of 0.25 percentage points before the end of the year, the nearest one may take place as early as July. We are waiting for a new forecast of the regulator following the results of this meeting.

More than 50% of US citizens invest in stocks, including pension savings, so a strong drawdown in the US market could have an adverse economic effect. This forces the Fed to keep an eye on financial conditions. In previous years, the Fed informally supported the US stock market during crashes, softening the rhetoric and thus completing the correction. Something like this happened this time as well. One of the factors behind the rally since the beginning of the year is the decline in expectations for monetary tightening of global central banks.

This time, the risks have increased and more aggressive measures may be needed. Apparently, this year the rate will indeed be reduced. In my opinion, this time the FOMC median forecast will assume one stage of decline before the end of the year. The Fed may prefer to wait for the release of fresh macro information and developments in the trade confrontation between the US and China. If necessary, the FOMC will adjust the forecast in September.

Volatility is possible on Wednesday evening. If the regulator disappoints investors with a more restrained forecast than the market is laying down, then US stocks may resume correction. There will also be a factor in favor of the dollar strengthening. Obviously, the Fed's rhetoric will be flexible, and there will be room for maneuver. In the longer term, this may become a powerful factor supporting the US stock market.

June will be a busy month for important financial news. We are waiting for the meetings of the ECB and the Fed, the elections in the UK, the publication of important statistics and the question of Trump's impeachment. Most of the unrest will be in the first half of June. Follow the news!

June 8. James Comey's speech on Trump's connection with Moscow

Thursday, June 8 former head FBI James Comey to testify before US Senate Select Committee on Intelligence. Speech topic: Russian interference in the 2016 US presidential election.

Not only relations between the US and Russia depend on Komi’s statements, but also further fate President Donald Trump. It is not for nothing that until quite recently the media featured headlines about his possible impeachment.

He himself can prevent Comey from making statements that are dangerous for his career. The President has the right to prohibit the disclosure of any information about the negotiations of officials. But in this case the case may turn out to be that Trump will be criticized for hiding the facts. If he bans Comey from speaking before the Senate, then he has something to hide.

Recall that it was Trump who fired James Comey from the post of head of the FBI, because he refused to stop the investigation into the campaign headquarters of the future president for links with Moscow. Because of this, Michael Flynn subsequently had to be fired from his post as national security adviser.

Regardless of how events develop, the markets are extremely tense and are closely watching any news coming through. this issue. The reaction of the dollar exchange rate can be sudden and unexpected.

June 8. Parliamentary elections in the UK

Whether the pound will collapse or not will depend on the results of the elections to the British Parliament. The Labor Party is closing the gap from the leading Constitution Party, which owns the incumbent Prime Minister, Theresa May.

If Theresa May fails to take the majority of seats in parliament, then this will put pressure on the GBP/USD pair and support the growth of EUR/GBP. The Laborites are set to deploy budgetary expansion and will try to promote these ideas in Parliament. Theresa May's party sees no need to stimulate the economy.

In addition, the situation with Brexit remains an important issue. The outcome of the election will also tell whether the British Prime Minister can continue this journey lightly, bringing a majority into Parliament, or whether new obstacles will arise.

June 8. ECB meeting and QE winding down

More recently, the head of the ECB, Mario Draghi, has already reported that the regulator's leadership does not intend to curtail stimulus in the short term. Now we will have to repeat the same thing following the results of the ECB meeting on June 8.

If the markets see a change in rhetoric, then this will support the euro. If the rhetoric remains soft, significant changes in the Forex market are not expected.

In general, from the results of June 8, we can expect hints of curtailmentQEin the medium term. Markets are waiting for the phrase about additional stimulus measures to be taken from the text of the accompanying statement if necessary. As soon as the ECB eliminates the possibility of this need, investors will understand that the regulator has embarked on the path of normalizing monetary policy.

June 14 15:30 Moscow time. Publication of the consumer price index in the US

Traditionally, the US consumer price index is a significant indicator of the state of the US economy, both for the markets and for the Fed.

At the end of April, the indicator was 2.2% y/y, while the core index reached 1.9% y/y. The inflation target is 2%, and although the Fed targets a slightly different indicator (final consumption expenditure index - PCE), inflation data is still extremely important.

In recent months, the rate of price growth in the US has begun to show a slowdown, which is largely due to the fall in world oil prices. If the negative trend continues, it will be negatively perceived by the markets.

The number of interest rate hikes by the Fed in 2017 was mainly due to the dynamics of inflation. Fiscal stimulus will have to support price growth, and in general, CPI has been approaching and holding the target level for several months.

The weakening of inflationary pressure will force, albeit slightly, but still adjust the forecasts for further tightening of the Fed's monetary policy.

June 14, 21:00 Moscow time. US Federal Reserve meeting. What will Yellen say?