Weekly Outlook, March 1 – 5, 2021: Top Economic Events to Watch This Week
Arslan Butt • 4 min read
The broad-based US dollar is likely to end this week on a bullish track, amid a sharp rise in US bond yields overnight. It should be noted that the government bonds, and particularly US Treasuries, have become the focal point of markets across the globe, after traders moved to price in earlier monetary tightening than signaled by the Federal Reserve and its peers. Besides this, the gains in the US dollar could also be associated with the news of the US trade warning to China and the missile attack on an Iran-backed militant group, which kept the market trading sentiment under pressure and contributed to the gains in the US dollar.
Looking forward to the coming week, the series of Manufacturing PMI and Unemployment rates, along with the RBA Rate Statement and the OPEC JMMC Meetings, could drive plenty of headlines to keep the markets on the move. Apart from this, the US-China trade headlines, the US-Iran tussle and coronavirus headlines will also be closely followed, as they could play a key role in determining risk levels in the market.
Top Economic Events to Watch This Week
1) US ISM Manufacturing PMI – Monday – 15:00 GMT :
ISM Manufacturing PMI – This data is typically released by the Institute for Supply Management (ISM) Manufacturing Index, which shows business conditions in the US manufacturing sector. It is one of the leading indicators of the overall economic situation in the United States. A result above 50 is seen as positive (or bullish) for the greenback; conversely, a result below 50 is seen as bearish for the currency.
DATE: 02/01/2021 15:00
2) UK Markit Manufacturing PMI – Monday – 9:30 GMT
Markit Manufacturing PMI – This data is published by the Chartered Institute of Purchasing & Supply and Markit Economics. It measures the economic conditions in the UK manufacturing sector. It is worth mentioning that the UK service sector does not affect this either positively or negatively. Traders want to see the highest possible figures, which are taken as bullish for the GBP. However, any reading above 50 indicates industry expansion; conversely, a reading below 50 indicates contraction.
From the projected view, the data is expected to come in at 57.3 – the same as the previous reading – which may fail to give any meaningful impetus to the British pound.
DATE: 02/19/2021 09:30
3) RBA Interest Rate Decision – Tuesday – 3:30 GMT
RBA Interest Rate Decision – The Reserve Bank of Australia makes this decision. If the RBA is hawkish about the economy’s inflationary outlook and increases the interest rates, it is seen as bullish for the AUD currency. Conversely, if the RBA has a dovish opinion about the inflationary outlook and keeps the ongoing interest rate or cuts it, it is seen as bearish for the AUD.
ACTUAL: 0.1 %
CONS: 0.1 %
DATE: 02/02/2021 03:30
ii) RBA Rate Statement – As we have already mentioned, decisions about this interest rate are made by the Reserve Bank Board and explained in a media release. The decision is announced at 2.30 pm after each Board meeting. It is understood as a basic tool the Board of the RBA uses to communicate with investors regarding monetary policy. It contains the results of their decision on interest rates and a commentary about the economic conditions that influenced their decision. Apart from this, it also discusses the economic outlook and gives fresh clues on the outcome of future decisions.
4) Gross Domestic Product (QoQ) – Wednesday – 0:30 GMT
Gross Domestic Product (QoQ) – This data is normally released by the Australian Bureau of Statistics. It examines the total value of all goods and services produced in Australia. The GDP is considered a key measure of economic activity and health. A growing trend has a positive or bullish effect on the AUD, while a declining trend is seen as bearish for the Australian currency.
ACTUAL: 3.3 %
CONS: 2.6 %
DATE: 12/02/2020 00:30
5) ISM Services PMI – Wednesday – 15:00 GMT
ISM Services PMI – This data is normally released by the Institute for Supply Management (ISM). It measures business conditions in the US non-manufacturing sector. It is worth noting that the non-manufacturing sector does not influence this either positively or negatively, compared to the GDP or ISM Manufacturing. A result above 50 is seen as positive (or bullish) for the USD; conversely, a figure below 50 is seen as bearish for the greenback.
DATE: 02/03/2021 15:00
6) OPEC JMMC Meetings – Thursday – All Day
These meetings are attended by representatives from the 13 OPEC member states and 11 other oil-rich nations. The purpose of this meetings is to coordinate and unify the petroleum policies of the Member Countries and ensure the stabilization of oil markets in efforts to secure an efficient, economical and regular supply of petroleum to consumers. They discuss multiple issues concerning energy markets and, most importantly, they agree on how much oil they will produce. When the meeting is over, the officials usually talk with reporters throughout the day. The formal statement covering policy shifts and meeting objectives is released after the meetings have been concluded.
7) Non-Farm Employment Change – Friday – 13:30 GMT
This data is typically released by the US Bureau of Labor Statistics. It shows the number of new jobs created during the previous month, in all non-agricultural businesses. The monthly changes in the payroll can be remarkably volatile, due to its close relationship with the Central Bank’s economic policy decisions. A high reading is understood as bullish for the USD, whereas a low reading is considered bearish.
ACTUAL: 49 K
CONS: 50 K
DATE: 02/05/2021 13:30
8) Unemployment Rate – Friday – 13:30 GMT
The US Bureau of Labor Statistics releases this data. It reflects the number of unemployed workers divided by the total civilian labor force. It is one of the key indicators for the US Economy. It represents the percentage of people actively seeking employment and willing to work. If the rate goes upward, it shows a lack of expansion within the US labor market. A rise in the unemployment rate leads to weakness in the US economy. A low figure is seen as bullish for the USD; conversely, if the figure goes up, it is seen as negative or bearish for the USD currency.
ACTUAL: 6.3 %
CONS: 6.7 %
DATE: 02/05/2021 13:30
About the author
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.