FX Calendar 2021

3 March

Publication of the UK budget

The British government is examining ways to continue its main household support measures, but also plans to begin raising taxes in a bid to replenish the coffers, in particular via a corporation tax hike and council tax reforms. It is the first country so far to admit the need to increase tax income in order to reduce the level of public debt caused by the pandemic.

ECB meeting

The ECB is set to give further details about how to measure “financial conditions”, a key factor when it comes to establishing monetary policies.

Baden-Württemberg and Rhineland-Palatinate state elections in Germany

The outcome of these two polls should give an idea of how the political landscape has changed in Germany, with Chancellor Angela Merkel due to step down by the end of the year.

Dutch general elections

European Council

German SPD party conference

Approval of loans and aid under the “Next Generation EU” stimulus package

However, most of the funds will not be allocated to Member States until 2023–24, which will be a little bit too late to deal with the immediate fallout of the pandemic.

ECB meeting

Scottish parliamentary elections

Victory for the incumbent Scottish National Party could pave the way for a second Scottish independence referendum, which, at the very least, would once again exacerbate political risk and have an effect on the pound sterling exchange rate.

ECB Forum on Central Banking

This annual meeting is a chance for central bankers and market analysts to discuss the latest changes in the role of central banks and monetary policy.

European Council

Next stage of Brexit

The United Kingdom introduces full border checks (e.g. mandatory customs declarations for all imported goods).

ECB meeting

Strategy review announcement expected from the ECB

The European Central Bank is likely to add climate change to its mandate, possibly encouraging purchases of green or transition bonds (for industries showing a will to make their activities more eco-friendly). The ECB is also due to establish a new inflation target given its ongoing failure to meet its “below, but close to 2%” target for several years.

ECB meeting

No change in monetary policy is expected. Discussions within the Governing Council are more likely to focus on the pace of asset purchases until the end of the year, rather than what is to follow the pandemic emergency purchasing programme (PEPP), which runs until March 2022. This last point could rather be discussed from December 2021 to January 2022. Moreover, on this occasion, the ECB is expected to adjust its growth forecasts for the eurozone upwards due to the favourable trend in activity in recent months and the easing of the pandemic.

Hungarian central bank meeting and publication of its inflation report

The publication of the inflation report will determine the pace of monetary tightening implemented by the Hungarian central bank. In all likelihood, further rate hikes will take place, and the quantitative tightening that began in August will continue.

Bank of England meeting

For now, UK monetary policy is on autopilot. The key rate remains at 0.1%, while the asset purchase programme of GBP 895 billion is supported by an overwhelming majority of members of the Monetary Policy Committee. In addition, the central bank is willing to tolerate temporarily high inflation. It expects the consumer price index to reach 4% year-on-year towards November/December, before declining in 2022.

German federal elections

The outcome of the German elections is particularly uncertain. At this stage, there are three trends: voter preferences are very volatile, candidates who have made false steps are punished directly (the Green candidate who lied on his CV, for example) and a coalition of three parties will certainly need to be put in place in order to obtain a majority. Given the uncertainty of this election and the fact that the main parties are closely bunched, we should expect long negotiations before we arrive at a government coalition. This will have close to zero effect on the foreign exchange market. The euro does not react to the German elections.

Hungarian central bank meeting

European Council

No agenda submitted as yet by the Slovenian Presidency of the European Union.

ECB meeting

Bank of England meeting

Hungarian central bank meeting

Hungarian central bank meeting and publication of its inflation report

ECB and Bank of England meetings

On this occasion, the ECB is likely to begin further discussions on the follow-up to the exceptional monetary support measures taken in the aftermath of the crisis. The President of the ECB is advocating for an asset purchase programme to take over from the PEPP from next April. However, this is not a position shared unanimously in the Governing Council, particularly on the Bundesbank side.

European Council

Handover from Slovenia to France. From 1 January 2022, France will take over the rotating Presidency of the European Union for a period of six months. The priority issues that need to be addressed by the French Presidency will be: the environment (carbon tax at borders and green taxation), sovereignty (the reform of asylum law) and digital (better regulation of internet giants).

Mid-February

Probable approval of the Biden administration’s stimulus plan, worth an estimated $1.9 trillion

Federal Open Market Committee (FOMC) meeting

As far as we can tell, the US Federal Reserve will continue running on autopilot until at least mid-2021, with no changes to the current quantitative easing programme ($120 bn/month).

FOMC meeting

First-quarter GDP estimate

Due to the spread of the pandemic and the Biden administration’s plans to introduce stricter social distancing rules, further shrinkage of the economy cannot be ruled out.

FOMC meeting

Independence Day

Financial markets close, resulting in a sharp fall in liquidity on the currency market.

FOMC meeting

Initial second-quarter GDP estimate

Labour Day

Financial markets close, resulting in a sharp fall in liquidity on the currency market.

Bank of Canada meeting

General election in Canada

Outgoing Prime Minister Justin Trudeau has called an early general election. He hopes to capitalise on good polls in order to obtain a majority in Parliament. One of his first measures if he wins the elections would be to implement a surtax tax of 3% on the profits of the largest financial groups in the country.

US Federal Reserve FOMC meeting

At this meeting, the Federal Reserve could officially announce tapering (reduction in asset purchases) - beginning with effect from October. The other window of opportunity for an announcement is the meeting on 3 November. The composition of tapering will also need to be closely monitored - to know whether the central bank rather wants to reduce its support for the housing market (by reducing the pace of purchases of mortgage-backed securities) or to reduce its purchases of US Treasuries. In any event, the decline in asset purchases is initially likely to be very gradual in order to avoid too much turbulence on the financial markets, including on the foreign exchange market

Central Bank of Canada meeting

On this occasion, the central bank will update its growth and inflation forecasts for the Canadian economy, which Governor Tiff Macklem will then comment on at a press conference.

Initial estimate of third-quarter US GDP

Activity is expected to be strong. However, inflationary fears expressed by both consumers and manufacturers could seriously undermine the growth momentum in the coming months if they materialise over the long term.

Gubernatorial elections in New Jersey and Virginia

US Federal Reserve FOMC meeting

Thanksgiving

Financial markets close, resulting in a sharp fall in liquidity on the currency market.

Central Bank of Canada meeting

The central bank governor will not speak at the end of this meeting at a press conference, which greatly reduces the possibility of a significant change in monetary policy.

US Federal Reserve FOMC meeting

Reserve Bank of Australia meeting

Barring a last-minute change due to the impact of lockdown measures to combat the pandemic, the central bank is unlikely to call into question the tapering (reduction in asset purchases) launched at the beginning of September. Asset purchases have fallen from AUD 5 billion to AUD 4 billion a week, since 1 September.

Bank of Japan meeting

Further intervention by the Chinese central bank to support the economy

The official Chinese press in English mentions a further reduction in the reserve requirement ratio for banks in the fourth quarter. A similar action was taken in the summer, with a rate cut of 0.5 points effective from 15 July. Through this type of measure, several hundreds of billions of euros can be injected into the Chinese economy over the long term. At the same time, the central bank is expected to continue its open-market transactions to support liquidity and financing conditions.

Reserve Bank of Australia meeting

Publication of China's third-quarter GDP figures

In line with the indicators published in recent months, Chinese GDP figures will probably will disappoint expectations. Note that when China is not satisfied with the level of economic activity, it tends to revise growth data for previous years upwards in order to artificially inflate its GDP. Specifically, this is what it did last spring.

Bank of Japan meeting

General Election in Japan

The general elections are scheduled for October, but they are expected to be postponed until November. The worsening public health situation in the archipelago has significantly eroded the popularity of outgoing Prime Minister Yoshihide Suga, who also heads the ruling party, the Liberal Democratic Party (LDP). In September 2020, he took over from the very popular Shinzo Abe, who had to resign for health reasons. According to a poll conducted for Japanese news agency Jiji published in mid-July, Suga is among the least popular Japanese prime ministers in the post-war period (with support of only 9%). Furthermore, the approval rating of his government’s measures continues to fall due to the blunders linked to the management of the public health crisis. It stands at only 29% according to a poll published at the end of August for broadcaster NHK - the worst level measured by a poll since the LDP’s return to power in 2012. The outcome of the election is therefore highly uncertain for the LDP and its leader.

Reserve Bank of Australia meeting

Reserve Bank of Australia meeting

Bank of Japan meeting

G20 Leaders Summit in Rome (Italy)

The agenda is not yet known, but it is likely to focus on the continuation of its efforts within the G20 to combat tax optimisation among multinational companies and on support measures as we come out of the pandemic.

COP26 in Glasgow (United Kingdom)