Daily Brief, Aug 12 – Economic Events Outlook, Happy Eid Day

Posted Monday, August 12, 2019 by
Arslan Butt • 2 min read

Good morning, traders.

Muslim community celebrates Eid ul Adha, and team FX Leaders wishes them a very Happy Eid Day. We hope this brings happiness, joy, and blessings. Alongside, the Japanese banks also remain closed in the observance Mountain Day.

So far, the US dollar index weakens further amid an escalation of the trade war between the US and China. In particular, the US government’s decision to label China a currency manipulator after Beijing allowed the yuan to weaken past the symbolic 7/dollar level, which has increased questions about how tightly controlled the currency is and its true value.

Whereas, the safe-haven demand grew on Friday as US-China trade dispute jitters spurred demand for safe-haven currencies, while the euro shrugged off a collapse in Italy’s governing alliance and the possibility of new elections.

What’s Next on Economic Docket?

USD – Federal Budget Balance – 18:00 GM

The US Department of the Treasury is due to release the figures on Federal Budget Balance for the United States. It’s a difference in value between the federal government’s income and spending during the previous month. A positive number indicates a budget surplus, a negative number indicates a deficit.

Economists are expecting a massive drop in Federal Budget Balance as it’s forecast to drop from -8B to -120.08B. I was looking at the past behavior of the figure and noticed that it’s really common for this number to report such a huge deviation. Yet the data rarely drives major price action due to its low impact nature.

AUD – RBA Assist Gov Kent Speaks – 20:00 GMT

On Monday, the Reserve Bank of Australia Assistant Governor (Financial Markets) Christopher Kent is due to speak at the Finance and Treasury Association Breakfast, in Sydney.

The RBA Assistant Governor (Financial Markets) Christopher Kent is responsible for advising Reserve Bank Board members who decide where to set the nation’s key interest rates, on matters relating to economics, and his public engagements are often used to drop subtle clues regarding future policy shifts.

Since audience questions are expected, investors will be looking for any surprising remarks about the upcoming monetary policy decision to determine further trends in the Aussie dollar.

NZD – FPI m/m – 22:45 GMT

Statistics New Zealand is scheduled to release the Food Price Index which indicates a change in the price of food and food services purchased by households.

Although food is amongst the most active consumer price elements, this indicator earns some attention because New Zealand’s major inflation data is released every quarter.

Last month’s figure stays at -0.7%. For now, the ‘Actual’ greater than ‘Forecast’ is considered good for currency and drives buying trend in the market and vice versa.

JPY – PPI y/y – 23:50 GMT

The Bank of Japan is scheduled to release Producer Price Index which is also known as Corporate Goods Price Index (CGPI) is due to report a further drop of -0.5% vs. -0.1% last month. For your info, the PPI figure is considered one of the leading indicators of consumer inflation as when corporations raise the price of their goods the higher costs are usually passed on to the consumer.

A drop in PPI may cause a drop in inflation, pushing BOJ’s CPI numbers further away from the target and this may keep Japanese yen under pressure.

Good luck and do check FX Leaders economic calendar for the live coverage of these major events.

Good luck!

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