Review of the main events of the Forex economic calendar for the next trading week (13.09.2021 – 19.09.2021)
The dollar’s decline that started after the publication of the controversial report of the US Department of Labor at the beginning of the month, stopped. The DXY dollar index, which estimates its value against a basket of 6 major currencies, rose by about 0.5% last week, which cannot be said about the declining major world and American stock indices.
In the United States, inflation has spiked to its highest level in decades. Core annual inflation (the Fed’s preferred inflation indicator) in July was 3.6%. The consumer price index (CPI) of the US in July rose by 5.3% (the latest data on inflation (for August) will be presented by the Labor Department next week). In addition, the situation on the country’s labor market (the main indicator for the Fed when making decisions on monetary policy) continues to gradually improve. So, according to the weekly data of the US Department of Labor published on Thursday, the number of initial claims for unemployment benefits for the week of September 3 decreased from 345 thousand to 310 thousand, which turned out to be better than the forecast of 335 thousand. The number of secondary claims for the week of August 27 decreased from 2.805 million to 2.783 million, and the average number of initial claims over the past 4 weeks on September 3 decreased from 356.25 thousand to 339.5 thousand.
Raphael Bostic, President of the Federal Reserve Bank of Atlanta and member of the Fed’s management, does not expect a decision in favor of cutting the stimulus program to be made at a meeting of the US central bank in September. “You shouldn’t hope much for anything like this during the next meeting,” he said last week. The recently published data and the dynamics of the coronavirus pandemic are, in his opinion, arguments in favor of a later start of curtailing the stimulus. However, not all members of the Fed’s management share this opinion.
It is unlikely that the Fed will reduce purchases following the September 21-22 meeting, but the Fed Chairman Jerome Powell may signal that this process will begin after the November 2-3 meeting. Therefore, a strong weakening of the dollar should probably not be expected in the second half of September.
Next week, market participants will pay attention to the publication of important macro statistics from the UK, US, China, Canada, New Zealand, and Australia.
*during the coming week, new events may be added to the calendar and / or some scheduled events may be canceled
**GMT time
Monday, September 13
No important macro statistics planned to be released.
Tuesday, September 14
02:45 AUD Speech by the head of the RBA Philip Lowe
In his speech, Philip Lowe will assess the current situation in the Australian economy and point out further plans for the monetary policy of the department.
Market participants would also like to hear Lowe’s views on central bank policy amid the ongoing coronavirus pandemic and Australia’s first recession in 30 years. According to Lowe, “there is no serious argument in favor of tightening monetary policy in the short term,” and “it will be some time before interest rates rise.”
Any signals from him regarding a change in the plans of the RBA’s monetary policy will cause a sharp increase in volatility in the AUD trading and on the Australian stock market. If he does not touch on the topic of monetary policy, the market reaction to his speech will be weak.
06:00 GBP Report on the average wages of the British for the last 3 months. Unemployment rate
On a monthly basis, the UK Office for National Statistics (ONS) publishes a report on average earnings covering the last 3 months, with and without bonuses.
This report is a key short-term indicator of the dynamics of changes in the level of wages of employees in the UK. Wages growth is positive for the GBP, while a low value is negative. Forecast: September report suggests that average wages with bonuses increased over the last calculated 3 months (May-July) by +8.6% (against +8.8%, +7.3%, +5.6% , +4.0%, +4.5%, +4.8%, +4.7%, +3.7%, +2.8%, +1.3%, +0.1% in previous periods); without bonuses – increased by +7.3% (against +7.4%, +6.6%, +5.6%, +4.6%, +4.4%, +4.2%, +4.1%, +3.6%, +2.8%, +1.9%, +0.9%, +0.2% in previous periods). Thus, the data indicate a growing dynamics of the wages level, which is a positive factor for the pound, as it contributes to the growth of inflationary pressures. If the data turns out to be better than forecast, the pound is likely to strengthen in the foreign exchange market. Data worse than forecast will negatively affect the pound in the short term.
Also at this time, data on unemployment in the UK are published. It is expected that in the 3 months from May to July, unemployment was at the level of 4.6% (against 4.7%, 4.8%, 4.7%, 4.8%, 4.9%, 5.0%, 5.1%, 5.0%, 4.9%, 4.8%, 4.5%, 4.3%, 3.9%, 3.9% in previous periods). Since 2012, the UK unemployment rate has declined steadily (from 8.0% in September 2012). This is a positive factor for the pound, the rise in unemployment is a negative factor.
If the data from the UK labor market turn 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 the publication of data from the British labor market, an increase in volatility is expected in the pound quotes and on the London Stock Exchange.
12:30 USD Consumer Price Index (excluding food and energy)
Consumer Price Index (CPI) determines the change in prices of a selected basket of goods and services for a given period and is a key indicator for assessing inflation and changes in consumer preferences. Food and energy have been excluded from this indicator to provide a more accurate estimate. A high value strengthens the US dollar, while a low value weakens it. In July 2021, the value of the indicator was +0.3% (+4.3% in annual terms), in June +0.9% (+4.5% in annual terms), in May +0.7% (+3.8% in annual terms), and in April +0.9% (+3.0% in annual terms), which indicates some improvement in the situation after the index fell in March and April 2020 against the background of the coronavirus pandemic and growth of consumer prices. If the data turns out to be weaker than the forecast, the dollar is likely to react with a short-term decline. Better-than-forecast data will strengthen the dollar. Outlook for August: +0.3% and +4.3% (in annual terms), which is likely to have a positive impact on the USD.
Wednesday, September 15
02:00 CNY Retail Sales Index
This index is published monthly by the National Bureau of Statistics of China and measures total retail sales and cash receipts. The index is often considered an indicator of consumer confidence and economic well-being and reflects the health of the retail sector in the near term. A rise in the index is usually positive for the CNY; a decrease in the indicator will negatively affect CNY. The previous value of the index (in annual terms) was +8.5% (after an increase of +8% in the last months of 2019 and a fall of -20.5% in February 2020). Outlook: In August 2021, retail sales in China rose by +7.1% (YoY), suggesting an ongoing recovery from a strong fall in February-March 2020. If the data turns out to be even better, the CNY will strengthen even more.
06:00 GBP Consumer Price Index. Core Consumer Price Index
Consumer Price Index (CPI) reflects the dynamics of retail prices for a group of goods and services that make up the British consumer basket. The CPI is a key indicator of inflation. Its publication causes active movement of the pound in the foreign exchange market, as well as the London Stock Exchange FTSE100 index.
In the previous reporting month (July), the growth in consumer inflation (in annual terms) amounted to +2.0%. Forecast for August: +2.9% (annualized).
Despite the relative decline, this value indicates growing inflationary pressures, which is likely to support the pound. Indicator value below the forecast could provoke a weakening of the pound, as low inflation will force the Bank of England to adhere to a soft monetary policy.
Core CPI is published by the Office for National Statistics and determines the change in prices for a selected basket of goods and services (excluding food and energy) for a given period. It is a key indicator for assessing inflation and changes in purchasing preferences. A positive result strengthens the GBP, a negative result weakens it.
In July, Core CPI (in annual terms) increased by +1.8%. Probably, the publication of the indicator will have a positive short-term effect on the pound if its value is higher than the forecast and previous values. Forecast for August: +2.9% (annualized). The indicator value below the forecast and / or previous values may provoke a weakening of the pound.
12:30 CAD Consumer price indices in Canada
Core CPI from the Bank of Canada reflects the dynamics of the 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%. The rise in CPI is a harbinger of a rate hike and a positive factor for the CAD. Core Consumer Price Index rose in July 2021 by +0.6% (+3.3% in annual terms). If the data for August turns out to be worse than the previous values, it will negatively affect the CAD. The data will strengthen the Canadian dollar better than the previous values. Outlook: Core CPI rose +3.7% in August (yoy), which is likely to have a positive impact on the CAD.
22:45 NZD New Zealand GDP for Q2
The release of the data will cause increased volatility in the NZD. Considering the recent rise in prices for commodities and agricultural products (especially for dairy products, which is the most important component of New Zealand’s exports), as well as the fact that New Zealand has been the least affected by the coronavirus pandemic compared to other major economies, it is likely that New Zealand’s Q2 GDP report will come out with positive numbers.
GDP is expected to grow by +1.5% in the 2nd quarter of 2021 (previous values +1.6%, -1.0%, +13.9%, -11%, -1.2%, +0.1%) and +16.4% in annual terms (previous values +2.4%, -0.9%, +0.2%, -11.3%, 0%, +1.7% ). The data so far remain inconsistent, although they indicate a continued gradual recovery of the New Zealand economy after its fall in the first half of 2020. The data worse than the forecast will negatively affect the NZD quotes.
Tursday, September 16
01:30 AUD Employment rate. Unemployment rate
The employment rate reflects the monthly change in the number of Australian citizens employed. 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. Forecast: in August, the number of employed Australian citizens decreased by -70,000 (after an increase of +2,200 in July, +29,100 in June, +115,200 in May, a fall of -30,600 in April, -264,100 in May 2020 and an increase of +29,100 in January 2021).
Also at the same time, the Australian Bureau of Statistics will publish a report on the unemployment rate – an indicator that estimates the proportion 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 decline in the indicator is a positive factor for the AUD. Forecast: unemployment in Australia in August was at the level of 4.9% (against 4.6% in July, 4.9% in June, 5.1% in May, 5.5% in April, 6.6% in December , 6.8% in November, 7.0% in October, 6.9% in September, 6.8% in August, 7.5% in July, 7.4% in June, 5.2% in March, 5.1% in February), although it is approaching pre-coronavirus levels. Overall, the numbers look contradictory, although in other large economies, the labor market has deteriorated on a large scale due to the coronavirus.
The leaders of the RBA have repeatedly stated that, in addition to the situation in international trade, the Australian economy and the central bank’s monetary policy plans are influenced by indicators of the level of household debt and expenditures, the growth of workers’ wages, as well as the state of the country’s labor market. In the opinion of the RBA management, an unemployment rate of 4.5% or lower is required to raise wages and accelerate inflation to the target range. Unemployment in the country is not decreasing, and a return of inflation to the middle of the target range of 2% -3% is not even in the distant horizon.
The AUD is unlikely to react strongly positively to the publication of data from the country’s labor market. If the values of the indicators turn out to be worse than the forecast, the Australian dollar may significantly decline in the short term. Better-than-expected data will strengthen AUD in the short term.
12:30 USD Retail sales. Retail control group
This report (Retail Sales) reflects the total sales of retailers of all sizes and types. Changes in retail sales are the main indicator of consumer spending. The report is a leading indicator, and in the future the data may be greatly revised. A high result strengthens the US dollar, a low one weakens it. A relative decrease in the indicator may have a short-term negative impact on the dollar, while an increase in the indicator will have a positive effect on the USD. In the previous month (July), the value of the indicator was -1.1% (after an increase of +0.6% in June, +10.7% in March, +7.6% in January and a fall of -2.9% in February), which indicates that the improvement in this sector of the American economy is still unstable after the partial lifting of strict quarantine restrictive measures in a number of states. Outlook for August: -0.7%, which is likely to negatively affect the USD if the forecast is confirmed.
Retail sales is the main indicator of consumer spending in the United States, showing changes in retail sales. The Retail Control Group metric measures volume across the entire retail industry and is used to calculate price indices for most products. A strong 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. The data worse than the values of the previous period (-1.0% in July, +1.1% in June, -0.7% in May, -1.5% in April, +6.9% in March, -3.5 % in February, +8.7% in January) may negatively affect the dollar in the short term. Forecast for August: -0.1%.
Friday, September 17
14:00 USD University of Michigan Consumer Confidence Index (preliminary release)
This indicator reflects the confidence of American consumers in the economic development of the country. A high level indicates economic growth, while a low level indicates stagnation. Previous values of the indicator: 70.3 in August, 81.2 in July, 85.5 in June, 84.9 in March, 76.8 in February, 79.0 in January 2021. An increase in the indicator will strengthen the USD, while a decrease in the value will weaken the dollar. This indicator is expected to be released in September with a value of 70.2. The data indicate that the recovery of this indicator is uneven, which is negative for the USD. The data worse than the forecast may negatively affect the dollar in the short term.
Price chart of EURUSD in real time mode
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