Key Points From This Week

RBA Adds Extra Easing

Despite an uptick in economic activity as restrictions continue to ease across Australia, the RBA doubled its bond purchase program this week by a further $100 billion. The RBA cited remaining downside risks and continued uncertainty in the outlook as the main divers behind the move though still maintains that the economy is on course for a full recovery. However, employment and inflation are likely to remain subdued in the near term.

Dollar Rally Continues

The US Dollar has continued higher this week, with US treasury yields continuing to improve on the back of the recent FOMC meeting. With the Fed refraining from any further dovish signaling and with vaccination optimism lifting sentiment, the Dollar has been well bid across the week.

BOE Remains On Hold

The BOE held rates steady this week and announced no further easing as it cited optimism over the government's vaccination progress. The BOE is projecting a full recovery over H2 though did warn that downside risks and uncertainty remain, warning regional banks also that negative rates could still come into play this year.

Key Events Next Week

BOE's Bailey & Fed's Powell Both Speak

Over a very quiet data week, the main focus will be on the two central bank heads who both speak on Wednesday. on the back of recent central bank meetings, traders will be keen to hear any further assessment of the current situation and any perceived hawkishness could see firm buying in both currencies.

US CPI

Earlier in the day on Wednesday traders will receive the next set of US CPI readings. Given the recent uptick in US inflation expectations this will be an important release to watch and any strength here should see the USD rally continue higher in the near term.

Keep An Eye On

US Stimulus Developments

With the US government attempting to push through Biden's $1.9 trillion stimulus package via its majority in Congress, the president now just needs Senate backing for his bill to be approved. If successful, equities markets ate likely to continue higher in the near term. A failure, however, would see risk assets recoil sharply.

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