The focus is on the American economy but this week will only bring us the existing home sales publication. Analysts expect a 1.0% decline. Till then, other markets can attract investors.

On Tuesday, the Bank of Japan will announce the level of interest rates in Japan. Analysts expect no change from the current 0.5%. More emotions can be connected with the Royal Bank of Canada decision, which is expected to cut interest rates by 25 basis points to 4.00%. It seems that the market is already discounting such move. The USDCAD advanced already over 1.03, the highest since September of 2007. On Wednesday, investors will focus on the UK, where the MPC minutes will be published along with the GDP report. Also, new level of interest rates will be announced in New Zealand (no change from the current 8.25%).

On Thursday, the mentioned above report from the U.S housing market (existing home sales) will be published as well as the unemployment claims and crude oil inventories reports. On Friday, inflation reports from Canada will be on the spotlight.

Investors are waiting for good news from the U.S economy. It seems that they will not get those during the upcoming week, which can bring more declines of stock indices. The currency pairs that picture the best increasing risk aversion are the EUR/USD and the USD/JPY, which already declined to 1.45 and 106.00 respectively.

Adam Narczewski