Weekly Outlook, Jun 14-18: Top Economic Events to Watch This Week
Arslan Butt • 4 min read
The broad-based U.S. dollar is going to end this week on the bearish track as U.S. yields failed to stop their earlier losses after a jump in U.S. inflation, which was seen as insufficient to alter the Federal Reserve’s easy monetary policy stance. At the data front, the consumer price index (CPI) climbed 5.0% year-on-year in May, above 4.7% in forecasts and 4.2% growth during the previous session. Meanwhile, the core CPI grew 3.8% year-on-year and 0.7% month-on-month in May, both above forecasts.
Apart from this, the losses in the U.S. dollar could also be associated with the upbeat market mood, which increased the safe-haven demand in the market and contributed to the dollar gains. Looking ahead into the coming week, the series of Retail Sales and Monetary Policy Statement, Employment Change, and CPI will determine market direction during the week. Meanwhile, the chatters surrounding the U.S. stimulus package and geopolitical tensions 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) BoE’s Governor Bailey speech – Monday, 14:00 GMT
Andrew Bailey is the present Governor of England’s central bank. If we are talking about his career, 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 (FCA) before being selected. This British central banker was also the Deputy Governor of the BOE from April 2013 to July 2016 and the Chief Cashier of BOE from January 2004 until April 2011.As the current governor of England’s central bank, he controls short-term interest rates, which is why he has more influence over the U.K.’s currency value than any other person. So, traders closely observe his public engagements as they usually give detailed clues regarding future monetary policy. Thus, the hawkish tone is seen as bullish for GBP currency; conversely, the dovish tone is understood as bearish for the GBP currency.
2) U.S. Retail Sales (MoM) – Tuesday, 13:30 GMT
The U.S. Retail Sales data is normally released by the U.S. Census Bureau, which measures the total receipts of retail stores. Monthly percent changes show the rate of changes in such sales. However, the changes in Retail Sales are broadly followed as a leading indicator of consumer spending. In that way, the Actual’ greater than ‘Forecast’ is seen as bullish for the Greenback. Conversely, a low figure is seen as negative (or bearish) for the U.S. dollar.
DATE: Fri May 14th, 2021 12:30
3) Fed Interest Rate Decision – Wednesday, 19:00 GMT
DATE: Wed Apr 28, 2021 23:00ii) FOMC Statement – Right after the Fed’s rate decision, the FOMC releases its statement about monetary policy. The statement tends to influence the volatility of USD and determine a short-term bullish or bearish trend. Therefore, more hawkish than expected is suitable for U.S. currency; conversely, the dovish outlook is viewed as bearish for the USD currency.
4) RBA Gov Lowe Speaks – Thursday, 1:10 GMT
Philip Lowe is governor of Australia’s central bank. He has held this position since February 2012. He controls short-term interest rates. That’s why Lowe has more control over the AUD currency value than any other person. However, the dovish tone over the outlook of the Australian economy is viewed as bearish or negative for the AUD currency. At the same time, the hawkish tone about the Australian economy outlook is considered a bullish or positive factor for the AUD currency.
5) Aussie Employment Change – Thursday, 2:30 GMT
i) Aussie Employment Change – The Employment Change is normally released by the Australian Bureau of Statistics, which measures the number of employed people in Australia. The increase in this indicator has a positive impact on consumer spending, which boosts Aussie economic growth. So, the high figures are viewed as bullish for the AUD currency. Conversely, the low figures are viewed as negative (or bearish) for the AUD currency.
CONS: -30.6 K
DATE: Thu May 20, 2021, 06:30
ii) – Unemployment Rate – This data is typically published by the Australian Bureau of Statistics, which gauges the number of unemployed workers divided by the total civilian labor force. However, the upward readings indicate a lack of expansion within the Australian labor market. In that way, the increase leads to weakening the Australian economy. So, the downward figure is seen as bullish sentiment for the AUD currency; conversely, the rise in the readings is considered negative or bearish for AUD currency.
6) BOJ Monetary Policy Statement – Friday, Tentative
i) The Monetary Policy statement is released by the Policy Board of the Bank of Japan. By communicating the committee’s vote outcome about interest rates and other policy measures and the economic conditions influencing their decision, the statement used to provide a lot of hints about future changes in monetary policy. So, the hawkish outlook is viewed as bullish for the JPY currency. Conversely, the dovish outlook is understood as negative or bearish for the JPY currency.ii) BoJ Interest Rate Decision – The Bank of Japan announces this decision. If the Bank of Japan is hawkish about the inflationary outlook of the Japanese economy and raises the interest rates, it is understood bullish for the JPY currency. Conversely, suppose the BoJ is dovish about the inflationary outlook of the Japanese economy and keeps the ongoing interest rate or cuts the interest rate. In that case, it is understood as bearish for the JPY currency.
DATE: Tue Apr 27, 2021, 08:00