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Week Ahead – ECB, RBA and BoC Meetings Eyed Amid Potential Policy Shifts; US Jobs Report in Focus Too

Central banks will move to the fore next week as the European Central Bank, the Reserve Bank of Australia and the Bank of Canada will be holding policy meetings. With all three central banks recently lowering their outlooks for their respective economies, markets will be on standby for possible shifts in policy stance. The US February jobs report will be another highlight for investors. Other key releases will be Q4 GDP numbers from Australia, Canadian employment figures, and UK and US services PMIs.

Australian GDP and RBA meeting could drag on aussie

It’s going to be a crucial week for the Australian dollar with a data-heavy economic calendar and an RBA policy meeting likely to test some key technical levels for the aussie/dollar pair. First up on the agenda are January building approvals and fourth quarter business inventories on Monday.  There will be more Q4 barometers on Tuesday with the release of net exports contribution. The real highlight though will be the Q4 GDP estimates on Thursday. Australia’s economy is forecast to have expanded by 0.4% quarter-on-quarter in the final three months of 2018 to produce an annual rate of 2.6%. January retail sales and trade numbers will wrap up the week on Friday.

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The RBA, which will announce its latest policy decision on Tuesday, is expected to keep rates on hold but may backtrack on its overoptimistic 2019 growth predictions of around 3% if the GDP data comes in line or below expectations. A dovish RBA and disappointing growth figures could weigh heavily on the aussie.

Chinese trade issues to stay under the spotlight

With plenty of domestic concerns to inundate aussie traders next week, China-related risks will also be playing their part in driving the Australian currency.

As US and Chinese negotiators try to resolve their remaining differences in their long-running trade conflict, monthly export numbers from China will be looked at to assess the impact of the dispute on the economy. The country’s exports are forecast to have fallen by 4.5 year-on-year in February, while imports are expected to have slid by 1.4% y/y. Other data worth watching will be consumer and producer inflation figures on Saturday.

Another event markets will be keeping an eye on is the National People’s Congress, which starts on March 5. Reports suggest the Chinese government wants parl