Major Interest Rate Announcements this Week
The major interest rate announcements that will affect futures, forex and commodities this week are:
- Wednesday, 2:00 pm New York time – FOMC Quadruple Announcements
- FOMC Economic Projections
- FOMC Statement
- Federal Funds Rate
- FOMC Press Conference
- Thursday, 3:30 am New York time
- Libor Rate
- Swiss National Bank Monetary Policy Assessment
- Swiss National Bank Press Conference
- Thursday, 7:00 am New York time
- UK MPC Official Bank Rates Votes
- Monetary Policy Summary
- Official Bank Rate
- Late Thursday Night into Early Friday Morning
- Bank of Japan Monetary Policy Statement
- Bank of Japan Policy Rate
- Bank of Japan Press Conference
The effect of having these pending rate announcements later in the week can create very slow market movement on Monday and Tuesday or volatility can increase dramatically as traders begin exiting their positions prior to the reports. Although a market analysis will be posted on Tuesday, here are a couple of different ways to limit the trader’s risk in either scenario, for trading earlier in the week.
If the markets are moving very slowly, then the trader can utilize either an In the Money (ITM) or At the Money (ATM) strategies. When markets are moving slower than normal, then the ITM and ATM can be safer as price is likely to stay in the same area. Even if spikes occur, generally price will move back to their original levels. Additionally, if using the ITM or ATM strategies, if price goes one full strike against the trade, then they have the option of exiting early.
However, if markets are moving faster, then the trader may opt to lower their risk using Out of the Money (OTM) strategies with the probability that the market will continue to move in their direction. In this case, the trader should be comfortable with the risk on entry, in case the market goes against them.