Weekly Outlook, Apr 19 – 23, 2021: Top Economic Events to Watch This Week
Arslan Butt • 4 min read
The broad-based U.S. dollar will end this week on the bullish track as market investors have preferred the safe-haven assets in the wake of risk-off market sentiment. Apart from this, the gains in the U.S. dollar were further bolstered by the better-than-expected U.S. economic data. Conversely, the upticks in the U.S. dollar could be short-lived or temporary. The reason could be tied to the Treasury yields, which is continued their retreat from more-than-one-year highs as investors increasingly bought into the U.S. Federal Reserve’s pledge of continued monetary support.
Looking ahead into the coming week, the series of Manufacturing PMI and Unemployment Claims, along with Monetary Policy Meeting Minutes and BOC Press Conference, can drive plenty of headlines to keep the markets on the move. The geopolitical tensions 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 – JPY Trade Balance – Monday – 0:50 GMT
The Ministry of Finance typically releases this data, measuring exports and imports of total goods and services. The positive value shows a trade surplus; alternatively, the negative value shows a trade deficit. It is worth noting that this event can generate some volatility for the JPY currency, which would have an impact on the Forex market as the Japanese economy influences the global economy. In simple words, the high figures are understood as positive (or bullish) for the JPY currency; conversely, the low figures are seen as negative (or bearish) for the JPY currency.
2 – Monetary Policy Meeting Minutes – Tuesday – 2:30 GMT
Australian Monetary Policy Meeting Minutes: These minutes are published two weeks after the interest rate decision, which usually gives a full account of the policy discussion, including differences. In addition to this, they also record the votes of the individual members of the Committee. Hence, if the RBA is hawkish about the inflationary outlook for the Aussie economy, then the markets see a higher possibility of a rate increase, which tends to underpin the AUD currency. Conversely, suppose the RBA is dovish about the inflationary outlook for the Aussie economy. In that case, the markets see a higher possibility of a rate cut, which is seen as the bearish or negative sentiment for the AUD currency.
3 – Bank of Canada Monetary Policy Report – Wednesday – 15:00 GMT
The Bank of Canada publishes a study of economic changes in the economy of Canada. This report indicates a sign of a new fiscal policy. Any changes in this report tend to influence CAD currency. If the Bank of Canada shows a hawkish outlook that is considered bullish for the CAD currency, conversely, the dovish stance is negative for the Canadian dollar.
BoC Rate Statement – This statement is the principal medium used by the Bank of Canada (BoC) to interact with investors regarding monetary policy decisions, specifically those regarding interest rates. This statement contains the result of their decision on interest rates and commentary about the economic conditions that influenced their decision.
4 – BoC Press Conference – Wednesday – 16:00 GMT
The BOC Governor and Senior Deputy Governor typically hold this press conference after releasing the BOC Monetary Policy Report. The press conference has two parts. First, the prepared statement is read, then the conference is open to press questions. The questions usually lead to unscripted answers that create heavy market volatility. It is also worth mentioning that this press conference is an audio webcast on the BOC website.
5 – ECB Monetary Policy Statement and Press Conference – Thursday – 12:45 GMT
After the ECB’s economic policy decision, the ECB President gives a press conference about the monetary policy. His comments usually affect the volatility of the EUR currency and determine a short-term bullish or bearish trend. His hawkish view is seen as positive for the EUR currency; likewise, his dovish outlook is seen as negative or bearish for the EUR currency.
6 – U.S. Unemployment Claims – Thursday – 13:30 GMT
This data is normally released by the U.S. Department of Labor, which measures the number of people filing first-time claims for state unemployment insurance. However, the larger than expected number shows weakness in this U.S. labor market, which leaves a negative impact on the strength and direction of the U.S. economy. Conversely, the low readings are seen as positive or bullish for the greenback currency.
7 – German Flash Manufacturing PMI – Friday – 8:30 GMT
German Flash Manufacturing PMI: This data is typically released by Markit economics, which examines business conditions in the manufacturing sector. However, the manufacturing PMI is a leading indicator of business conditions and the overall economic condition in Germany as the manufacturing sector manages a large part of the total GDP. In that way, the result above 50 is seen as positive or bullish for the EUR currency; conversely, the result below 50 is seen as bearish or negative for the EUR currency.
8 – French Flash Services PMI
This data is typically released by Markit Economics, based on many business executives in private sector manufacturing and services companies. This data is normally released on the 3rd- working day of each month. Each result is weighted according to the firm’s size and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Results are presented by question asked, showing the percentage of respondents reporting an improvement, deterioration, or no change since the previous month. Above 50.0 indicates industry development; likewise, below 50.0 shows industry contraction.