Central bank blackout periods and the quiet weeks

[Fairman]

Central bank blackout periods and the quiet weeks

Before a central bank meeting, officials stop speaking publicly. The blackout typically starts a week or so before the decision.

Markets in that window lose a source of news. Fewer speeches mean fewer sudden spikes. Ranges narrow, and the market waits.

That makes the days before a meeting, outside of scheduled data, different from normal. Strategies sensitive to volatility see fewer opportunities. Spreads are generally steady.

The calm is often broken by the data releases that remain, such as inflation figures, which carry more weight because the market has little else to go on.

Mapping blackout periods on the calendar for the main central banks helps put the quiet days in context. A strategy that relies on speaker-driven volatility will see its edge shrink.

Minutes of the previous meeting, published a few weeks later, break the silence in a different way. They are scheduled, often at 19:00 GMT or similar times that fall in thin liquidity, and the reaction can be outsized for the same reason. A quiet week is not necessarily a safe week, just a more predictable one.

How does the average daily range compare between blackout weeks and other weeks on the main pair traded?