Central Banks
Traders will monitor monetary policy decisions from the central banks of Thailand, Taiwan, Brazil, Hungary and the Philippines this week. Bangko Sentral ng Pilipinas is set to decide on Wednesday whether to proceed with a second increase in the benchmark interest rate after inflation reached a five-year high after last month’s move. The Philippine peso is the worst-performing Asian currency this year, with losses of more than 6 percent against the dollar.
Trading will resume in Indonesia on Wednesday after a seven-day holiday. Investors will be processing a slew of events, from the Fed’s much-anticipated rate hike to dovish guidance from the ECB. The rupiah is the best performer in the region this quarter after the nation’s central bank hiked its policy rate twice in two weeks to stabilize markets.
Brazil’s central bank may keep borrowing costs unchanged at 6.5 percent for a second straight meeting on Wednesday after a 10-day nationwide truckers’ strike choked the economy and sent the nation’s stock index to a nine-month low. Mexico’s central bank will probably keep its key rate unchanged at 7.5 percent on Thursday as economists see inflation slowing this year to within the bank’s target range. The central bank will start auctioning dollars at the close of trading at 3pm on Monday, Infobae reported, on new central bank chief Luis Caputo’s first full day in the role. In South Africa, traders will look to data released Wednesday on the consumer price index for May and the first-quarter current-account balance for clues on the policy path of the South African Reserve Bank. The next key test for traders in Hungary will be a rate meeting on Tuesday, where policy makers will renew their economic forecasts and give updated policy guidance. Currency markets are eager for them to strike a more cautious note, according to TD Securities’ Cristian Maggio, after the forint fell to a 13-month low. Poland will release May macro data, including wages, employment or output, followed by central bank minutes and money supply.
This article was provided by Bloomberg News.