Weekly Outlook, Feb 15 – 19, 2021: Top Economic Events to Watch This Week
Arslan Butt • 4 min read
The broad-based US dollar managed to stop its declining streak of the previous session, and looks forward to ending this week on a bullish track, possibly due to the downbeat market sentiment, which is urging investors to put their money into safe-haven assets like the US dollar. However, the upticks in the greenback could be short-lived or temporary, as new signs of weakness in the US jobs market have lowered investor expectations regarding the pace of US economic recovery from the pandemic.
Another factor that might also be capping any gains in the USD could be the reports suggesting that Fed chief Jerome Powell has emphasized the need to keep the monetary policy accommodative for some time. As per the latest report, Federal Reserve Chairman Jerome Powell announced, at the Economic Club of New York, that a “patiently accommodative monetary policy stance” is very important to boost the labor market and the overall economy, following a stall in recent months.
Looking forward to next week, the series of Manufacturing PMI and Unemployment Claims, along with Monetary Policy Statements and FOMC Meeting Minutes, could drive plenty of headlines to keep the markets on the move. The geopolitical tensions and coronavirus (COVID-19) headlines will also be closely followed across the ocean, as they could play a key role in determining risk levels in the market.
Top Economic Events to Watch This Week
1) – Monetary Policy Meeting Minutes – Monday – 19:30 GMT
The minutes are typically published weeks after the interest rate decision. They provide a detailed record of the most recent meeting of the RBA Board, and help to measure current economic conditions that impact their decisions regarding where to set interest rates. In simple words, if the RBA is hawkish about the inflationary outlook for the economy, the markets see a higher possibility of a rate increase, and that is positive for the AUD. Conversely, a dovish tone is seen as bearish for the Aussie.
2) – EUR Gross Domestic Product s.a. (QoQ) – Tuesday – 5:00 GMT
This data is typically released by Eurostat. It is a measure of the total value of all goods and services produced in the Eurozone. The GDP is understood as a comprehensive measure of the economic activity and health of the Eurozone. Typically, an upward trend positively impacts the Euro; on the flip side, a downward trend is considered bearish for the shared currency.
CONS: -0.7 %
DATE: 02/15/2021 10:00
3) – Retail Sales (MoM) – Wednesday – 8:30 GMT
This data is released by the US Census Bureau. It measures the total receipts of retail stores. Monthly changes in percentage reflect the rate of changes in such sales. Changes in Retail Sales are broadly followed as an important indicator of consumer spending. Therefore, high figures are seen as bullish for the USD, whereas low figures are seen as negative (or bearish) for the greenback.
ACTUAL: -0.7 %
CONS: 0 %
DATE: 01/15/2021 13:30
4) – FOMC Meeting Minutes – Wednesday – 14:00 GMT
Following the Fed’s rate decision, the FOMC releases its statement about monetary policy. This report tends to influence the volatility of the USD, and it determines a short-term bullish or bearish trend. Therefore, a hawkish outlook is seen as positive, or bullish, for the US dollar; conversely, a dovish view is seen as negative, or bearish, for the USD.
5) – Aussie Employment Change – Wednesday – 19:30 GMT
This data is typically released by the Australian Bureau of Statistics, which measures the number of employed people in Australia. In simple words, an increase in this indicator positively impacts consumer spending, which tends to boost economic growth. Therefore, high figures are considered bullish for the Aussie; conversely, low figures are seen as negative (or bearish) for the AUD.
ACTUAL: 50 K
CONS: 50 K
DATE: 01/21/2021 00:30
ii) – Unemployment Rate:
This data is typically released by the Australian Bureau of Statistics. It measures the number of unemployed workers divided by the total civilian labor force. High figures indicate a lack of expansion within the Australian labor market. An increase leads to weakening of the Aussie economy and a decrease in the figure is seen as bullish for the Australian currency; conversely, a rise is considered negative or bearish for AUD currency.
ACTUAL: 6.6 %
CONS: 6.7 %
DATE: 01/21/2021 00:30
6) – Unemployment Claims – Thursday – 8:30 GMT
This data is released by the US Department of Labor, which measures the number of people filing first-time claims for state unemployment insurance. A larger-than-expected number shows weakness in the US labor market, which leaves a negative impact on the strength and direction of the US economy. Conversely, low readings are seen as positive or bullish for the greenback.
ACTUAL: 812 K
CONS: 830 K
DATE: 02/04/2021 13:30
7) – German Flash Manufacturing PMI – Friday – 3:30 GMT
This data is typically released by Markit economics, which examines business conditions in the European manufacturing sector. However, the manufacturing PMI is seen as the key indicator of business conditions and overall economic conditions in Germany, as the manufacturing sector dominates a large part of the total GDP. Thus, a high reading, above 50, is seen as bullish for the Euro, and a low reading, below 50, is seen as bearish for the EUR currency.
DATE: 02/01/2021 08:55
ii – French Flash Services PMI
This data is also released by Markit Economics, based on many business executives in private sector manufacturing and services companies. This data is generally released on the third working day of each month. Each result is weighted according to the size of the company and its contribution towards a total manufacturing or services output accounted for by the sub-sector to which that company belongs. Results are presented by questions asked, showing the percentage of respondents reporting an improvement, deterioration or no change since the previous month. A figure above 50.0 indicates industry development; likewise, a figure below 50.0 shows industry contraction.
DATE: 02/03/2021 08:55