Weekly Outlook, April 5 – 9, 2021: Top Economic Events to Watch This Week
Arslan Butt • 3 min read
The broad-based U.S. dollar is going to end this week on the bullish track amid a sharp rise in U.S. bond yields as the Biden administration’s planned stimulus of over $2 trillion and a rapid COVID-19 vaccine rollout stimulate economic optimism as well as inflation fears. The sentiment for the greenback has been improving in recent weeks. However, the upticks in the U.S. dollar could be long-term as the data from the United States is expected to show an improvement in job creation and a lower unemployment rate for March, as the world’s biggest economy is getting closer to recovery from the pandemic.
Looking forward to the coming week, the series of Manufacturing PMI and Unemployment rates, along with the RBA Rate Statement and FOMC Meeting Minutes, can drive plenty of headlines to keep the markets on the move. Apart from this, the US-China trade headlines, America-Iran tussle, and coronavirus headlines will also closely follow 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 typically released by Institute for Supply Management (ISM) Manufacturing Index, which shows business conditions in the U.S. manufacturing sector. It is one of the leading indicators of the overall economic condition in the United States. The result above 50 would be positive (or bullish) for the greenback; conversely, the result below 50 is seen as bearish for the currency.
2 – RBA Interest Rate Decision:- Tuesday – 5:30 GMT
RBA Interest Rate Decision – The Reserve Bank normally makes this decision of Australia. 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 about the economy’s inflationary outlook and keeps the ongoing interest rate or cuts the interest rate, it is seen as bearish for the AUD currency.
ii) RBA Rate Statement – As we already mentioned above, the decisions about this interest rate are made by the Reserve Bank Board and explained in a media release, which announces the decision at 2.30 pm after each Board meeting. It is understood as a basic tool the RBA Reserve Bank Board uses to communicate with investors regarding monetary policy. It contains the result of their decision on interest rates and commentary about the economic conditions that influenced their decision. Apart from this, it discusses the economic outlook and gives fresh clues on future decisions’ outcomes.
3 – FOMC Meeting Minutes – Wednesday – 19:00 GMT
Following the Fed’s rate decision, the FOMC releases its statement about monetary policy. This report tends to influence the volatility of USD and determine a short-term bullish or bearish trend. Therefore, the hawkish outlook is seen as positive or bullish for the USD currency. Conversely, the dovish view is seen as negative or bearish for the USD currency.
4 – Fed’s Chair Powell speech – Thursday – 17:00 GMT
Powell joined the office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. Afterward, President Donald Trump nominated Jerome H. Powell to work as the Federal Reserve’s next Chairman on November 2, 2017. Powell assumed office as Chair on February 5, 2018. As a central bank leader, which controls interest rates, Powell has more control over the American currency value than any other person. Traders closely observe his public meetings as they are usually used to drop clues regarding future monetary policy.
5) – CAD – Unemployment Rate – Friday – 13:30 GMT
i) Unemployment Rate – This data is normally released by Statistics Canada, which measures the number of unemployed workers divided by the total civilian labor force. It is one of the key indicators for the Canadian economy as the number of unemployed people is an important sign of overall economic health because consumer spending is highly correlated with labor-market conditions. If the rate goes upward, it shows a lack of expansion within the Canadian labor market. As a result, the rise in the unemployment rate leads to weakness in the Canadian economy. However, the low figure is seen as bullish for the CAD; conversely, the rise is seen as negative or bearish for the CAD currency.
ii) – Employment Change – This data is released by Statistics Canada, which measures the change in the number of employed people in Canada. In simple words, the increase in this indicator positively impacts consumer spending, which tends to boost economic growth. Hence, the high figures are considered bullish for the CAD currency. Conversely, the low figures are seen as negative (or bearish) for the CAD currency.