Weekly Outlook, May 31-June 4, 2021: Top Economic Events to Watch - Forex News by FX Leaders
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Weekly Outlook, May 31-June 4, 2021: Top Economic Events to Watch

Posted Sunday, May 30, 2021 by
Arslan Butt • 5 min read

The broad-based U.S. dollar is going to end this week on the bullish track as U.S. President Joe Biden will reportedly propose a $6 trillion budget for 2022 on Friday as the United States continues its economic recovery from COVID-19. This was witnessed after Thursday’s released positive employment data. The number of initial jobless claims filed for the past week in the U.S. dropped to 406,000, a 14-month low. Meanwhile, the U.S. GDP grew by 6.4% quarter-on-quarter during the first quarter of 2021, slightly below the 6.5% growth in forecasts, but the same growth as the previous quarter. Alternatively, the upticks in the dollar could be short-lived or temporary as the market’s upbeat mood, backed by multiple factors, tend to undermine safe-haven assets like the U.S. dollar.

Looking forward to the coming week, the series of Manufacturing PMI and Unemployment rates, along with the RBA Rate Statement and BOE Gov Bailey Speaks, can drive plenty of headlines to keep the markets on the move. Apart from this, the US-China trade headlines, Israel-Palestine 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) CNY: Manufacturing PMI – Monday, 2:00 GMT

This data is typically released by the China Federation of Logistics and Purchasing (CFLP), which examines business conditions in the Chinese manufacturing sector. Figures above 50 indicate development in the Chinese economy. Conversely, a reading under 50 signals contraction. As the Chinese economy influences the global economy, this economic indicator would impact the Forex market. In that way, a result above 50 would be positive (or bullish) for the CNY. Conversely, the output below 50 is seen as bearish for the CNY currency.

Previous release
DATE:04/30/2021 06:00

2) AUD: RBA Interest Rate Decision – Tuesday, 5:30 GMT

i) RBA Interest Rate Decision – If the RBA is hawkish about the inflationary outlook of the economy and increases the interest rates, it is seen as bullish for the AUD currency. Conversely, if the RBA has a dovish about the inflationary outlook of the economy and keeps the ongoing interest rate or cuts the interest rate, it is seen as bearish for the AUD currency.

Previous release
ACTUAL:0.1 %
CONS:0.1 %
DATE:05/04/2021 09:30

ii) RBA Rate Statement – The decisions about this interest rate are made by the Reserve Bank Board and are 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.

3) Crude Oil: OPEC-JMMC Meetings – Tuesday, All Day

These meetings are attended by representatives from the 13 OPEC members and 11 other oil-rich nations. However, the purpose of this meeting is to coordinate and unify the petroleum policies of its 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, agree on how much oil they will produce. When the meeting is over, the officials usually talk with reporters throughout the day. As a result, the formal statement covering policy shifts and meeting objectives is released after the meetings have concluded.

4) USD: US ISM Manufacturing PMI – Tuesday, 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 situation in the United States. The result above 50 would be positive (or bullish) for the greenback. Conversely, the output below 50 is seen as bearish for the currency.

Previous release
DATE:05/03/2021 19:00

5) CAD: Gross Domestic Product (MoM) – Tuesday, 13:30 GMT

Gross Domestic Product (MoM) – Statistics Canada usually released this data, which gauges the total value of all goods and services produced by Canada. The changes in the GDP price index are considered a broad measure of Canadian economic activity and health. Thus, high figures are seen as positive or bullish for the CAD currency; conversely, a falling trend is seen as bearish for the CAD currency.

Previous release
ACTUAL:0.4 %
CONS:0.5 %
DATE:04/30/2021 17:30

6) AUD: Aussie Gross Domestic Product (QoQ) – Wednesday, 2:30 GMT

Gross Domestic Product (QoQ) – This data is normally released by the Australian Bureau of Statistics, examining the total value of all goods and services produced by Australia. The GDP is considered a key measure of economic activity and health. In that way, the growing trend has a positive or bullish effect on the AUD currency. Conversely, the declining trend is seen as bearish for the AUD.

Previous release
ACTUAL:3.1 %
CONS:2.5 %
DATE:03/03/2021 05:30

7) USD: US ISM Services PMI – Wednesday, 15:00 GMT

ISM Services PMI – This data is typically released by the Institute for Supply Management (ISM), which measures business conditions in the U.S. non-manufacturing sector. It is worth noting that the non-manufacturing sector does not influence positively or negatively compared to the GDP or the ISM Manufacturing. So, the result above 50 is seen as positive (or bullish) for the USD. Conversely, below 50 is seen as bearish for the greenback.

Previous release
DATE:05/05/2021 19:00

8) GBP: BoE’s Governor Bailey speech – Thursday, 17:00 GMT

Andrew Bailey is the current Governor of England’s central bank. He started this journey on Mar 16, 2020, at the end of Mark Carney’s session. He was working as the Chief Executive of the Financial Conduct Authority before being selected. This British central banker was also the Deputy Governor of the Bank of England from April 2013 to July 2016 and the Chief Cashier of the Bank of England from January 2004 until April 2011. As governor of the central bank, he controls short-term interest rates, which in turn, he has more influence over the U.K.’s currency value than any other person. This is why traders closely observe his public engagements, as they are usually used to leave detailed clues regarding future monetary policy. Thus, a hawkish tone is seen as bullish for GBP currency. Conversely, a dovish tone is understood as bearish for the GBP currency.

9) CAD: Employment Rate – Friday, 13:30 GMT

i) Employment Change – This data is typically released by Statistics Canada, which measures 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, high figures are considered bullish for the CAD currency. Conversely, low figures are seen as negative (or bearish) for the CAD currency.

Previous release
ACTUAL:-207.1 K
CONS:-175 K
DATE:05/07/2021 17:30

ii) Unemployment Rate – Statistics Canada typically releases this data, which measures the number of unemployed workers divided by the total civilian labor force. It is one of the critical 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.

Previous release
ACTUAL:8.1 %
CONS:7.8 %
DATE:05/07/2021 17:30

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