FX Week Ahead - Top 5 Events: RBA & RBNZ Meetings; UK GDP; Canada Jobs; US Inflation

Not much has changed for the positive in the weeks since the last time the Reserve Bank of Australia met. The Q119 Australia inflation report showed that price pressures were weaker than expected, coming in at 1.3% versus 1.5% (y/y). In the interim period since the last RBA meeting in April, rates markets have steadily pulled forward expectations of a 25-bps rate cut into the first half of 2019. Currently, there is a 46% chance of a cut at the May meeting (more context: up from 38% at the end of last week).

Read the full report: May RBA Meeting & AUDUSD Price Forecast

05/08 WEDNESDAY | 02:00 GMT | NZD RESERVE BANK OF NEW ZEALAND RATE DECISION

The Reserve Bank of New Zealands overnight cash rate peaked at 3.50% in May 2015 and has been on a slow erosion over since; the most recent 25-bps rate cut was at the November 2016 meeting. Mounting concerns about a soft economy may have reached the tipping point in recent weeks, finally provoking the Reserve Bank of New Zealand into its first rate move in two and a half years.

Read the full report: May RBNZ Meeting & NZDUSD Price Forecast

05/10 FRIDAY | 08:30 GMT | GBP GROSS DOMESTIC PRODUCT (1Q P)

Overall, the Citi Economic Surprise Index for the UK, a gauge of economic data momentum, gained from -25.3 to 16.4 over the course of the first quarter. Accordingly, the Bloomberg News consensus forecast for the Q1‘19 UK GDP report calls for quarterly growth at 0.5% from 0.2% and yearly growth at 1.8% from 1.4%. If the Q1’19 UK GDP report comes in at 1.8% y/y, this will be the fastest rate of growth for the UK since Q417 (1.8% as well).

Read the full report: Q119 UK GDP & GBPUSD Price Forecast

05/10 FRIDAY | 12:30 GMT | CAD EMPLOYMENT CHANGE & UNEMPLOYMENT RATE (APR)

After a surprisingly weak print in March, the Canadian labor market is looking for a modest rebound in April. Bloomberg News consensus forecasts call for the April Canada jobs report to show that the economy added 11.6K jobs after losing -7.2K in March. Even so, the six- and 12-month rates of jobs growth are 35.6K and 27.6K, respectively. The unemployment rate is due to stay on hold at 5.8% where it has since January 2019.

Read the full report: April Canada Jobs Report & USDCAD Price Forecast

05/10 FRIDAY | 12:30 GMT | USD CONSUMER PRICE INDEX (APR)

The April US Consumer Price Index on Friday is due to show another small rebound in price pressures, not much of a surprise given the rise in oil prices since the start of 2019. Overall, the readings are due right at the Federal Reserve‘s medium-term target of +2% - supporting Fed Chair Powell’s assessment at the May Fed meeting that low inflation seen earlier this year was “transitory.”According to Bloomberg News, headline CPI is expected in at 2.1% from 1.9%, and core CPI is due in at 2.1% from 2% (y/y).