Weekly Outlook, Aug 9 – 13, 2021: Top Economic Events to Watch This Week
Arslan Butt • 3 min read
The broad-based US dollar ended last week on the bullish track as the downbeat market sentiment and previously released upbeat US data tend to underpin the US currency. The broad-based greenback managed to pick up positive traction and remained well bid ahead of the US jobs report. This data could see the US tighten its monetary policy earlier than Europe and Japan, where the prospect remains distant. Comments by US Federal Reserve Vice Chair Richard Clarida, stating that conditions for an interest rate hike could be met in late 2022, led to a closer focus on the recovery of the labor market from COVID-19 and the US jobs report.
Looking ahead to the coming week, the series of Economic Sentiment and CPI reports, along with Employment Change and OPEC-JMMC Meetings, could drive plenty of headlines to keep the markets on move. The chatter surrounding the US stimulus package and headlines on geopolitical tensions 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 – German ZEW Economic Sentiment – Tuesday – 10:00GMT
The German ZEW Economic Sentiment is published by the Zentrum für Europäische Wirtschaftsforschung. This data aims to measure the institutional investor sentiment, reflecting the difference between the share of optimistic investors and the share of pessimistic analysts. An upward reading means that the optimists outweigh the pessimists. Normally, an optimistic view is seen as bullish for the European currency. Conversely, a negative view is understood as bearish for the EUR.
ACTUAL : 61.2
2– Consumer Price Index (MoM) – Wednesday – 13:30 GMT
This data is normally released by the US Bureau of Labor Statistics It gauges the price movements by comparing the retail prices of a representative shopping basket of goods and services. As we know, the purchasing power of the greenback is influenced by the inflation rate. The CPI is understood as a key indicator to measure inflation and changes in purchasing trends. Thus, if the figures go up, it is seen as positive (or bullish) for the greenback, and conversely, lower figures are seen as negative (or bearish) for the USD currency.
ACTUAL: 0.9 %
CONS: 0.5 %
Tue Jul 13, 2021 17:30
ii) – Consumer Price Index ex Food & Energy (MoM):
This data is normally released by the US Department of Labor Statistics. It provides a measure of price movements, by comparing the retail prices of a representative shopping basket of goods and services. Volatile products, such as food and energy, are excluded, in order to capture an accurate calculation. In simple words, high figures are considered as positive for the USD currency, conversely, low figures are seen as bearish.
ACTUAL: 0.9 %
CONS: 0.4 %
Tue Jul 13, 2021 17:30
3 – Crude Oil Inventories – Wednesday – 15:30 GMT
The EIA Crude Oil stockpiles report is a weekly measure of the change in the number of barrels of crude oil and its derivatives in stock. The data is released by the Energy Information Administration. It is a US key indicator and mostly affects the Canadian dollar, due to Canada’s sizable energy sector.
This report tends to affect the price of oil itself, and consequently, it has more impact on WTI crude futures. This report is the primary gauge of supply and demand imbalances in the market, which could lead to changes in production levels and price volatility. If ‘Actual’ is less than ‘Forecast’, it is seen as bullish for the USD currency.
4 – OPEC-JMMC Meetings: – Thursday – All Day
These meetings are attended by representatives from the 13 OPEC member countries and 11 other oil-rich nations. 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 an effort to secure an efficient, economic and regular supply of petroleum to consumers.
Basically, they discuss multiple issues concerning the energy market 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.
5 – The United States Michigan Consumer Sentiment Index – Friday – 7:00 GMT
This data is usually released by the University of Michigan. It is a survey of personal consumer confidence in terms of economic activity. It gives a picture of whether or not consumers are willing to spend money. In simple words, if the figure rises, it is seen as positive (or bullish) for the USD, whereas, a lower figure is seen as negative (or bearish).