2023.05.15 2023.05.15
Economic calendar for the week 15.05.2023 – 21.05.2023Jana Kanehttps://www.litefinance.org/blog/authors/jana-kane/
After accelerating at the end of last week amid the bullish momentum received from positive macro statistics from the US and tough comments from the Fed representatives that it is necessary to keep interest rates high for a long time (even if they put pressure on the banking sector and the economy, as inflation still remains high), the DXY dollar index ended the week with an increase of more than 1%, also broke into the zone well above the round level of 102.00.
Will the dollar be able to continue rising next week in the absence of important publications of statistics from the US in the economic calendar? On Monday, probably, yes, using the momentum of the past week. However, the DXY index will have to break into the zone above 102.50, 103.00 to make a more serious bid for further growth.
Next week, market participants will pay attention to the publication of important macro statistics from Australia, the UK, the US, Canada, China, the Eurozone, and Japan.
* during the coming week, new events may be added to the calendar and / or some scheduled events may be cancelled.
** GMT time
Monday 15 Мая
08:30 GBP Inflation report hearing
Head of the Bank of England and members of the Monetary Policy Committee of the Bank of England will speak in Parliament with comments on the current economic situation and the outlook for the economy. At this time, the volatility in the pound trading can rise sharply. One of the main benchmarks for the Bank of England regarding the prospects for monetary policy in the UK, in addition to GDP, is the inflation rate. If the tone of the report is soft, the British stock market will receive support, and the pound will fall. Conversely, tough rhetoric of the Bank of England on curbing inflation, which implies an increase in the interest rate in the UK, will lead to a strengthening of the pound.
Tuesday, May 16
01:30 AUD Minutes of the last meeting of the Reserve Bank of Australia
This document is published two weeks after the meeting and the decision on the interest rate. If the RBA is positive about the state of the labor market in the country, GDP growth rates, and also shows a hawkish attitude towards the inflationary forecast in the economy, the markets regard this as a higher probability of a rate hike at the next meeting, which is a positive factor for the AUD. The bank’s soft rhetoric regarding mainly inflation puts pressure on the AUD.
During the recent (April 2023) meeting, the RBA again raised the interest rate, bringing it to the level of 3.85%. In addition, the RBA signaled the likelihood of a further increase in the coming months.
“The Board will do everything necessary to ensure that over time, inflation in Australia returned to the target level – said head of the central bank Philip Lowe. – This will require further interest rate hikes in the future.”
Thus, the Australian dollar received a new impetus to growth. However, if the published minutes contain unexpected information regarding the RBA monetary policy issues, the volatility in AUD quotes will increase.
02:00 CNY Retail sales
Retail Sales Level Index is released monthly by China’s National Bureau of Statistics and evaluates the total volume of retail sales and cash generated. The index is often considered an indicator of consumer confidence and economic well-being and reflects the state of the retail sector in the near term. The growth of the index is usually a positive factor for the CNY; a decrease in the indicator will negatively affect the CNY. Previous index value (in annual terms) +10.6%, +3.5%, -1.8%, -5.9% (after +8% increase in the last months of 2019 and fall by -20.5 % in February 2020).
The data suggests an uneven pace of recovery after a strong drop in February-March 2020. If the data turns out to be weaker than the forecast or previous values, the CNY may weaken sharply.
Forecast for April: +7.0%.
06:00 GBP Report on the average wages of the British for the last 3 months. Unemployment rate
Every month, the Office for National Statistics (ONS) publishes a report on average wages for the period for the last 3 months, with and without bonuses.
This report is a key short-term indicator of the dynamics of changes in wages of employees in the UK. Wages growth is a positive factor for the GBP, while the low value of the indicator is negative. Forecast: The May report suggests that the average wages with bonuses rose again in the last calculated 3 months (January-March), after an increase of +5.9%, +6.0%, +6.5%, +6 ,%, +6.1%, +5.5%, +5.2%, +6.4%, +6.8%, +7.0%, +5.6%, +4.8% , +4.3%, +4.2% in previous periods); wages without bonuses also increased after growth of +6.6%, +6.6%, +6.7%, +6.5%, +6.1%, +5.8%, +5.5%, + 5.2%, +4.7%, +4.4%, +4.2%, +4.2%, +4.1%, +3.8%, +3.7%, +3, 8% in previous periods). Thus, the data points to the continued growth of wages, which is a positive factor for the pound. If the data turns out to be better than the forecast and / or previous values, the pound is likely to strengthen in the foreign exchange market. Data worse than forecast/previous values will have a negative impact on the pound.
Also at this time the office publishes data on unemployment in the UK. It is expected that for 3 months (January-March) unemployment was at the level of 3.8% (against 3.8%, 3.7%, 3.7%, 3.7%, 3.7%, 3.6% , 3.5%, 3.6%, 3.8%, 3.8%, 3.8%, 3.7%, 3.8%, 3.9%, 4.1%, 4.2% , 4.3%, 4.5%, 4.6%, 4.7%, 4.8%, 4.7%, 4.8%, 4.9%, 5.0%, 5.1% , 5.0% in previous periods).
Since 2012, the UK unemployment rate has steadily declined (from 8.0% in September 2012). This is a positive factor for the pound, while a rise in unemployment is a negative factor.
If the data from the UK labor market turns out to be worse than the forecast and / or the previous value, the pound will be under pressure.
In any case, at the time of publication of data from the British labor market, volatility in the quotes of the pound and the London Stock Exchange is expected to increase.
09:00 EUR Eurozone GDP for the 1st quarter (second estimate)
GDP is considered an indicator of the overall health of the economy. A growing trend of the GDP indicator is considered positive for the EUR; a low result weakens the EUR.
Recently, macro data from the Eurozone have been indicating a gradual recovery in the growth rate of the European economy after a sharp drop in early 2020.
According to the forecast of economists (second estimate), growth of +0.1% and +1.3% in annual terms of Eurozone GDP in the 1st quarter of 2023 is expected after 0% (+1.8% YoY) in 4- Q3 2022, +0.7% (+4.0% YoY) in Q3, +0.8% (+4.1% YoY) in Q2 2022 , +0.6% (+5.4% YoY) in Q1, +0.3% (+4.6% YoY) in Q4, +2.2% (+3 .9% YoY) in the 3rd quarter, +2.2% (+14.3% YoY) in the 2nd quarter and a fall of -0.3% (-1.3% YoY) in the 1st quarter of 2021.
If the data turns out to be weaker than the forecast and / or previous values, the euro may decline. Better-than-expected data may strengthen the euro in the short term, although the full recovery of the European economy even to pre-crisis levels is still far away.
12:30 USD Retail sales. Retail control group
This report (Retail Sales) reflects the total sales of retailers of all sizes and types. The change in retail sales is the main indicator of consumer spending. The report is a leading indicator and data may be heavily revised in the future. A high result strengthens the US dollar, a low result weakens it. A relative decrease in the indicator may have a short-term negative impact on the dollar, and an increase in the indicator will have a positive effect on the USD. In the previous month (March), the value of the indicator was -1.0% (after -0.6%, +3.2%, -0.8%, -1.1%, +1.1%, -0.2 %, +0.7%, -0.4%, +1.0% in the previous months of 2022).
Forecast for April: +0.7%.
Retail sales is the main indicator of consumer spending in the US showing the change in retail sales. The Retail Control Group measures volume across the entire retail industry and is used to calculate price indices for most products. A high result strengthens the US dollar, and vice versa, a weak report weakens the dollar. A slight increase in indicators is unlikely to accelerate the growth of the dollar. Data worse than the values of the previous period (-0.3%, +0.5%, +2.3%, -0.3%, -0.5%, +0.4%, +0.5%, +0, 4%, +1.1% in the previous months of 2022) could negatively affect the dollar in the short term.
Forecast for April: 0%.
12:30 CAD Core Consumer Price Index in Canada
Core Consumer Price Index (Core CPI) from the Bank of Canada reflects the dynamics of retail prices of the corresponding basket of goods and services (excluding fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation, and tobacco products). The inflation target for the Bank of Canada is in the range of 1%-3%. Rising CPI is a harbinger of a rate hike and positive for the CAD. The value of Core CPI in the previous month amounted to +0.6% (+4.3% YoY).
If the expected data turns out to be worse than the previous values, this will negatively affect the CAD. Data better than previous values will strengthen the Canadian dollar.
Forecast for April: +0.7% (+3.9% YoY).
23:50 JPY Japan GDP 1st Quarter 2023 (preliminary release)
GDP is considered an indicator of the general state of a country’s economy and evaluates the rate of its growth or decline. The report on gross domestic product published by the Cabinet of Ministers of Japan expresses in monetary terms the total value of all final goods and services produced by Japan over a certain period of time. An upward trend in GDP is considered positive for the national currency (yen), while a low result is considered negative (or bearish).
In the previous 4th quarter, the country’s GDP grew by 0% (+0.1% YoY) after declining by -0.2% (-0.8% YoY) in the 3rd quarter, growth of +0, 9% (+3.5% YoY) in Q2, down -0.1% (-0.5% YoY) in Q1 2022, up +1.1% (+4.6% YoY) in Q4 2021, down -0.9% (-3.6% YoY) in Q3, up +0 in Q2 .5% (+1.5% YoY) and falling in the 1st quarter of 2021 by -1.0% (-3.7% YoY).
The data point to the uneven recovery of the Japanese economy after its collapse due to the coronavirus pandemic in 2020.
However, the forecast implies that in the 1st quarter of 2023, Japan’s GDP grew by +0.1% (+0.7% YoY), which is a positive factor, primarily for the Japanese stock market. Better-than-expected data will provide additional support to the yen and Japanese stock indices.
Wednesday, May 17
09:00 EUR Consumer Price Index. Core CPI (final release)
Consumer Price Index (CPI) is published by Eurostat and measures the change in prices of a selected basket of goods and services over a given period. The index is a key indicator for assessing inflation and changing consumer preferences. A positive result strengthens the EUR, a negative result weakens it.
Previous values: +6.9% in March, +8.6% in January, +9.2% in December, +10.1% in November, +10.6% in October, +9.9% in September , +9.1% in August, +8.6% in June, +8.1% in May, +7.4% in April and March, +5.9% in February, +5.1% in January , +5.0% in December. If the data turns out to be worse than the forecast, the euro may sharply decline in the short term. Data better than the forecast and / or the previous value may strengthen the euro in the short term. Recall that the target level of consumer inflation of the ECB is slightly below 2.0%, and the data indicate an acceleration of inflation in the Eurozone.
Forecast for April: +0.7% (+7.0% YoY) with a preliminary forecast of +0.9% (+6.9% YoY).
Core Consumer Price Index (Core CPI) determines the change in prices of a selected basket of goods and services over a given period and is a key indicator for assessing inflation and changing consumer preferences. Food and energy are excluded from this indicator for a more accurate estimate. A high result strengthens the EUR, while a low result weakens it.
Previous values: +5.7% in March, +5.3% in January, +5.2% in December, +5.0% in November and October, +4.8% in September 2022.
If the data for April 2023 turns out to be worse than the previous value or forecast, this may negatively affect the euro. If the data turns out to be better than the forecast or the previous value, the euro is likely to react with an increase in quotations. Core inflation in the Eurozone is accelerating, which is positive (under normal economic conditions) for the euro.
Forecast for April: +1.0% (+5.6% YoY) with a preliminary forecast of +1.1% (+5.7% YoY).
09:50 GBP Speech by head of the Bank of England Andrew Bailey
Financial market participants expect Andrew Bailey to clarify the situation regarding the future policy of the UK central bank. During speeches by head of the Bank of England, volatility usually rises sharply in the quotes of the pound and the FTSE London Stock Exchange index if it gives any hints of tightening or easing monetary policy of the Bank of England. Probably, Andrew Bailey will also give explanations regarding the decision taken by the Bank of England on the interest rate and touch upon the state and prospects of the British economy after Brexit against the backdrop of a sharp rise in energy prices and inflation. If Bailey does not touch on monetary policy issues, the reaction to his speech will be weak.
Thursday, May 18
Markets in the Catholic countries of Europe will be closed due to the celebration of the Ascension Day.
01:30 AUD Employment rate. Unemployment rate
The employment rate reflects the monthly change in the number of employed Australian citizens. The growth of the indicator has a positive impact on consumer spending, which stimulates economic growth. A high value is positive for the AUD, while a low value is negative. Previous values of the indicator: +53,000 in March, +64,600 in February, -11,500 in January, +14,600 in December, +64,000 in November, +32,200 in October, +900 in September, +33,500 in August, -40,900 in July, + 88,400 in June, +60,600 in May, +4,000 in April, +17,900 in March, +77,400 in February, +12,900 in January 2022.
Also at the same time, the Australian Bureau of Statistics will publish a report on the unemployment rate – an indicator that assesses the ratio of the unemployed population to the total number of able-bodied citizens. The growth of the indicator indicates the weakness of the labor market, which leads to a weakening of the national economy. The decrease in the indicator is a positive factor for the AUD.
Forecast: Unemployment in Australia remained at its lowest level in April at 3.5% (against 3.5% in March and February, 3.7% in January, 3.5% in December, 3.4% in November and October , 3.5% in September and August, 3.4% in July, 3.5% in June, 3.9% in May and April, 4.0% in March and February, 4.2% in January), and the employment rate rose by +25,000 Australian workers.
The RBA officials have repeatedly stated that in addition to the situation in international trade, the Australian economy and the central bank’s monetary policy plans are affected by indicators of the level of debts and household spending, growth in wages of workers, as well as the state of the country’s labor market. If the values of the indicators turn out to be worse than the forecast, the Australian dollar may decline significantly in the short term. Better-than-expected data will strengthen the AUD in the short term.
02:00 NZD Publication of budget
The New Zealand Treasury will publish the (provisional) budget for next year. Unexpected information regarding budget items, especially spending and income levels, borrowing levels, financial targets and planned investments, could cause a significant increase in volatility in the NZD quotes.
Friday, May 19
12:30 CAD Retail Sales Index
The Retail Sales Index is published monthly by Statistics Canada and measures total retail sales. The index is often considered an indicator of consumer confidence and reflects the state of the retail sector in the short term. The growth of the index is usually a positive factor for the CAD; a decrease in the indicator will negatively affect the CAD. The previous value of the index (for February) was -0.2%. If the data for March turns out to be weaker than the forecast and / or the previous value, the CAD may drop sharply in the short term.
Price chart of EURUSD in real time mode
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.
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