Weekly Outlook, Dec 28, 2020 – Jan 01, 2020: Top Economic Events to Watch - Forex News by FX Leaders

Weekly Outlook, Dec 28, 2020 – Jan 01, 2020: Top Economic Events to Watch

Posted Saturday, December 26, 2020 by
Arslan Butt • 3 min read

The broad-based US dollar is on the back foot during holiday-thinned trading, and it will end this week on the bearish track, as optimism over the coronavirus vaccines and the US stimulus package have urged investors to put their money in riskier assets, rather than safe-havens. Apart from this, the losses in the US dollar could also be associated with doubts over US economic recovery from the COVID-19 pandemic. In addition to this, the developments surrounding the imminent Brexit deal have also played a major role in undermining the US dollar.

In the absence of any key data/events in the coming week, the market traders will keep their eyes on the CPI data series, along with the EIA Crude Oil stockpiles report and the US Unemployment Claims. In the meantime, the risk catalysts, like geopolitics and the virus woes, not to forget the Brexit, will not lose their importance, and could play a key role in determining risk levels in the market.

Top Economic Events to Watch This Week

1) European Retail Sales (YoY) – Monday – 08:00 GMT

This data is released by the National Institute of Statistics, which gauges changes in the retail sector. It shows the performance of the retail sector in the short term. However, the changes are broadly followed as an indicator of consumer spending. In this way, high figures are seen as bullish for the Euro currency; conversely, low figures are seen as bearish for the Euro.Previous Release
ACTUAL: -2.7 %
DEV: 0.01
CONS: -2.8 %
DATE: 11/27/2020 08:002. S&P/Case-Shiller Home Price Indices (YoY) – Tuesday – 14:00 GMT
This data is typically released by Standard & Poor’s. It measures changes in the value of the residential real estate market in 20 areas all over America. This report is seen as an indicator of the health of the US housing market. High figures are seen as bullish for the USD currency; conversely, low figures are seen as bearish for the USD.Previous Release
ACTUAL: 6.6 %
DEV: 3.15
CONS: 5.1 %
DATE: 11/24/2020 14:00

3. US Goods Trade Balance – Wednesday – 13:30 GMT
This data is generally published by the US Bureau of Economic Analysis and the US Census Bureau. It indicates the difference in value between imported and exported goods during a certain month. It is also worth mentioning that the figure is released on monthly basis, 4 to 7 days before the International Trade Balance, presenting advanced statistics for the reference month. Given that it started in July 2015, volatility could be erratic during the first releases. Higher exports and fewer imports are seen as positive or bullish for the US dollar; conversely, lower exports and higher imports are seen as negative or bearish for the greenback.Previous Release
ACTUAL: $ -80.29 B
DEV: – –
CONS: – –
DATE:11/25/2020 13:30
4. EIA Crude Oil Stocks Change – Wednesday – 15:30 GMT
This report is released by the Energy Information Administration. It is a weekly measure of the change in the number of barrels in the stock of crude oil and its derivates. This report tends to produce major price volatility, as crude oil prices impact global economies, affecting the most commodity-related currencies, such as the Canadian dollar. Apart from this, this report tends to influence the price of crude oil itself.
Previous Release
ACTUAL: -0.562 M
DEV: 1.16
CONS: -3.186 M

DATE: 12/23/2020 15:305. Non-Manufacturing PMI – Thursday – 01:00 GMT

This data is released by the China Federation of Logistics and Purchasing (CFLP), based on a survey of approximately 1,200 companies, covering 27 industries, including transport, construction and telecommunications. It is the level of a diffusion index based on surveyed purchasing managers in the services industry. Figures above 50.0 indicate industry expansion, which is seen as positive or bullish for the CNY currency; conversely, readings below 50.0 indicate industry contraction, which is seen as negative or bearish for the CNY.

Previous Release
ACTUAL: 56.4
DEV: 0.97
CONS: 52.1
DATE: 11/30/2020 01:00

NBS Manufacturing PMI:

This data is normally released by the China Federation of Logistics and Purchasing (CFLP), which measures business conditions in the Chinese manufacturing sector. A reading above 50 indicates expansion; conversely, a reading below 50 indicates industry contraction. Since the Chinese economy dominates the global economy, this economic indicator would impact the Forex market.

Previous Release
ACTUAL: 52.1
DEV: 0.75
CONS: 51.5
DATE: 11/30/2020 01:00

6. Initial Jobless Claims – Thursday – 13:30 GMT

This data is released by the US Department of Labor, which records the number of people filing first-time claims for state unemployment insurance. It provides a measure of strength in the labor market. A larger-than-expected number indicates contraction in this US market, which influences the strength and direction. Low figures are seen as positive or bullish for the USD currency. Conversely, high figures are seen as negative or bearish for the USD currency.

Previous Release
ACTUAL: 803 K
DEV: -1.29
CONS: 885 K
DATE: 12/23/2020 13:30

7. Friday – Banks are closed due to New Year’s Day.

The global financial markets and banks will be closed in observance of New Year’s Day. Most Forex brokers remain open for every holiday except Christmas and New Year’s Day. Stock markets and banks have slightly different holiday schedules. Banks facilitate the majority of foreign exchange volume. When they are closed, the market is less liquid, and speculators become a more dominant market influence. This can lead to both abnormally low and abnormally high volatility.

Good luck, and enjoy your long weekend!

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