Home News Economic calendar for the week 15.08.2022 – 21.08.2022

Economic calendar for the week 15.08.2022 – 21.08.2022

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Review of the main events of the Forex economic calendar for the next trading week (08.08.2022 – 14.08.2022)

Despite the growth on Friday, the dollar and its DXY index ended the past week in negative territory. The markets continue to be shaken by contradictory macro statistics coming from the US. Thus, after the inspiring monthly report on the US labor market published on the first Friday of the month, dollar sellers launched an attack again last week after fresh data on inflation was published.

From the report of the US Bureau of Labor Statistics, it follows that the Consumer Price Index (CPI) came out in July with a value of 8.5% (on an annualized basis), which was lower than the forecast of 8.7% and the previous value of 9.1%. Weaker inflation data significantly dampened expectations for a larger Fed rate hike, putting pressure on the dollar.

However, traders might want to reconsider rushing to sell their dollars, as economists say, explaining this by continuing geopolitical risks and the upcoming midterm elections to the US Congress this fall.

It’s also worth noting that San Francisco Federal Reserve Bank President Mary Daly said on Thursday that a 50 basis point rate hike in September “makes sense” given the latest economic data, including inflation. In a media interview, she highlighted the possibility of a 75 basis point rate hike at the Fed meeting in September if macro data so requires.

One way or another, inflation in the US is still “unacceptably” high.

Next week, market participants will pay attention to macro data from China, the US, the Eurozone, Australia, Canada, the UK, as well as the results of the New Zealand Reserve Bank meeting on monetary policy.

* during the coming week, new events may be added to the calendar and / or some scheduled events may be cancelled.

** GMT time

Monday, August 15

In Europe,  Assumption of Virgin Mary is celebrated. European banks will be closed, and therefore the trading volumes on the financial markets will also be lower than usual.

02:00 CNY Retail Sales Index

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. The previous value of the index (in annual terms) +3.1% (after an increase of +8% in the last months of 2019 and a fall of -20.5% in February 2020).

Outlook: In July 2022, retail sales in China grew by +5.0% (yoy). This is positive data after a contraction in previous months, which indicates an acceleration in the pace of recovery after a strong fall in February-March 2020. If the data turns out to be weaker, the CNY may weaken.

Tuesday, August 16

01:30 AUD Minutes of the August meeting of the RB 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, the GDP growth rate, 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, first of all, inflation puts pressure on the AUD.

During the recent (August) meeting, the RBA raised the interest rate (for the fourth time since November 2010), immediately by 0.50%, bringing it to 1.85% in order to contain inflation, which reached a maximum in 20 years (in the 1st In the quarter of 2022, Australian headline annual consumer price inflation was 5.1% and core inflation was 3.7%). In addition, the RBA signaled the likelihood of a further increase in the coming months. Market participants are now pricing in an increase in the RBA interest rate to 2.5% by the end of this year.

“The Board will do everything necessary to ensure that, over time, inflation in Australia returns to the target level,” said central bank governor Philip Lowe. “This will require further interest rate hikes going forward.”

According to the RBA forecast, in 2022 headline inflation will be at the level of 6%, while core inflation will accelerate to 4.75%. At the same time, the unemployment rate next year may fall to 50-year lows.

“With the move towards full employment and data on prices and wages, some scaling back of the emergency monetary support provided during the pandemic is appropriate,” Lowe said.

Economists now expect the RBA to raise its key rate to 2.6% by December 2022 from the current 0.35% and keep it there next year.

Thus, the Australian dollar received a momentum to grow. However, if the published minutes contain unexpected information regarding RBA monetary policy issues, the volatility in AUD quotes will increase.

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, including the period for the last 3 months, with and without bonuses.

This report is a key short-term indicator of the dynamics of wages in the UK. Earnings growth is a positive factor for the GBP, while the low value of the indicator is negative. Forecast: The August report suggests that the average wages with bonuses rose again in the last calculated 3 months (April-June), by +5.2% after growth of +6.2%, +6.8%, +7 .0%, +5.4%, +4.8%, +4.3%, +4.2%, +4.9%, +5.8%, +7.2%, +8.3%, +8.8%, +7.3%, +5.6%, +4.0% in previous periods); wages without bonuses also increased (by +4.4%) after growth by +4.3%, +4.2%, +4.2%, +4.1%, +3.8%, +3.7% , +3.8%, +4.3%, +4.9%, +6.0%, +6.8%, +7.4%, +6.6%, +5.6%, + 4.6% 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 agency publishes data on unemployment in the UK. It is expected that for 3 months from April to June, unemployment was at the level of 3.8% (against 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, the 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, an increase in volatility in the pound quotes and on the London Stock Exchange is expected.

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%. The rising CPI is a harbinger of a rate hike and positive for the CAD. Core Consumer Price Index increased in June 2022 by +0.3% (+6.2% in annual terms), by +0.8% (+6.1% in annual terms) in May, by +0.7 % (+5.7% in annual terms) in April, in March 2022 by +1.0% (+5.5% in annual terms), in February by +0.8% (+4.8% in in annual terms), in January by +0.8% (+4.3% in annual terms). 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 July: +0.6% (+6.7% in annual terms).

Wednesday, August 17

02:00 NZD RB of New Zealand’s interest rate decision. RBNZ’s accompanying statement

Subdued economic growth (New Zealand GDP growth has slowed since the second half of 2018) and a weakening labor market, as well as an escalation of international trade wars and a worsening global economic outlook, have forced the Reserve Bank of New Zealand to keep interest rates low for a long time. An additional and unforeseen risk to the global and New Zealand economies was the coronavirus epidemic.

However, following the results of the meetings held in October and November, the Reserve Bank of New Zealand (for the first time in 7 years) raised the key interest rate to 0.50%, and then to 0.75%. In February and April 2022, the interest rate was raised again to 1.5% to dampen inflation and contain rapidly rising home prices. The current RBNZ interest rate is 2.5%.

Earlier, the RBNZ said that the economy no longer needs the current level of monetary stimulus.

It is expected that at this meeting the RBNZ will raise the interest rate again, and may also speak in favor of a further increase in the interest rate at the next meetings. Market participants following the NZD quotes need to be prepared for a sharp increase in volatility during this period of time.

In the accompanying statement and comments, the RBNZ management will provide an explanation of the interest rate decision and comments on the economic conditions that contributed to the decision.

At this time, the volatility in the quotes of the New Zealand dollar may increase sharply.

Earlier, the RBNZ said that against the backdrop of “multiple uncertainties”, monetary policy “will remain loose for the foreseeable future” but “may be adjusted accordingly.”

03:00 NZD Press conference of the RBNZ

Head of the RBNZ Adrian Orr will comment on the rate decision. Usually, during the conference, volatility in NZD quotes increases.

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 included in the British consumer basket. The CPI index is a key indicator of inflation. Its publication causes active movement of the pound in the foreign exchange market, as well as the index of the London Stock Exchange FTSE100.

In the previous reporting month (in June), the growth in consumer inflation amounted to +0.8% (+9.4% in annual terms). The data suggests growing inflationary pressures, which is likely to support the pound. A value of the indicator below the forecast/previous value could provoke a weakening of the pound, as low inflation will force the Bank of England to maintain soft monetary policy.

Forecast for July: 0% (+9.8% in annual terms).

Core Consumer Price Index (Core CPI) is published by the Office for National Statistics and determines the change in prices of a selected basket of goods and services (excluding food and energy) over a given period. It is a key indicator for assessing inflation and changing consumer preferences. A positive result strengthens the GBP, a negative result weakens it.

In June, Core CPI (in annual terms) increased by +5.8%. It is likely that the publication of the indicator will have a positive impact on the pound in the short term if its value is higher than the forecast and previous values. The indicator value below the forecast and/or previous values ​​may provoke a weakening of the pound.

Forecast for July: +6.4%.

09:00 EUR Eurozone GDP for the 2nd quarter (updated assessment)

GDP is considered an indicator of the general state of the economy. The growing trend of the GDP indicator is considered positive for EUR; a low result weakens EUR.

Recently, macro data from the eurozone have been indicating the gradual restoration of the growth rate of the European economy after a sharp fall in early 2020.

Thus, according to the forecast of economists, GDP growth in the Eurozone is expected in the 2nd quarter of 2022 by +0.7% (+4.0% in annual terms). The preliminary estimate was +0.1% (+3.4% yoy) after +0.6% growth (+5.4% yoy in Q1, +0.3% (+4, 6% YoY) in Q4, +2.2% (+3.9% YoY) in Q3, +2.2% (+14.3% YoY) in Q2 Q1 and falling by -0.3% (-1.3% year-on-year) in Q1 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 (June), the value of the indicator was +1.0% (after -0.1%, +0.7%, +1.4%, +0.8%, +4.9% in the previous months of 2022). Forecast for July: +0.1%.

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 previous period (+0.8%, -0.3%, +0.5% +1.1%, -0.9%, +6.7% in January 2022) may negatively affect the dollar in the short term.

18:00 USD Minutes of the last (July) meeting of the Federal Open Market Committee (FOMC minutes)

The publication of the minutes is extremely important for determining the course of the current policy of the Fed and the prospects for raising interest rates in the US. The volatility of trading in financial markets during the publication of the protocol usually increases, since the text often contains either changes or clarifying details regarding the results of the last FOMC meeting of the Fed.

Following the meeting, which ended on March 15-16, the leaders of the central bank raised the interest rate by 0.25% (for the first time since 2018) and announced their intention to raise interest rates another 6 times in 2022, also allowing for the possibility of a tougher decision. In June, the Fed also began to reduce the size of its balance sheet, and at a meeting on June 14-15 decided to raise interest rates to 1.75%. The current Fed interest rate is 2.50%.

Economists and market participants are now assessing how effective the Fed will be in dealing with inflation, which has reached its highs in the past 40 years.

The soft tone of the minutes will have a positive impact on stock indices and negatively on the US dollar. Tough rhetoric of the Fed leaders regarding the prospects for monetary policy will push the dollar to further growth.

Thursday, August 18

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 one is negative. Previous values ​​of the indicator: +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. Growth indicates the weakness of the labor market, which leads to a weakening of the national economy. Decrease in the indicator is a positive factor for the AUD.

Forecast: Unemployment in Australia remained at its lowest level in July at 3.5% (against 3.5% in June, 3.9% in May and April, 4.0% in March and February, 4.2% in January ) approaching pre-coronavirus levels, and employment rose by another +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, then the Australian dollar may decline significantly in the short term. Better-than-expected data will strengthen the AUD in the short term.

Friday, August 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 May) +2.2%. If the data for June 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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