Weekly Outlook (Aug 23 – 27, 2021) – Top Economic Events to Watch This Week
Arslan Butt • 3 min read
The broad-based US dollar is going to end this week on a bullish track, as rising numbers of COVID-19 infections have raised doubts over global economic recovery, which has accelerated the investors’ dash towards safety. Daily new COVID-19 cases in the US have soared from fewer than 10,000 in early July to more than 150,000 in August, as the Delta variant takes hold.
The greenback got some additional lift from the expectations that the Federal Reserve could start to taper stimulus this year, even with COVID-19 infections surging in the US this month.
Moving forward into next week, the series of Retail Sales and speeches by Fed Chair Powell, along with German Flash Manufacturing PMI and Flash Manufacturing PMI, will control the direction of the market. Meanwhile, the chatter surrounding COVID-19 infections, along with headlines on geopolitical tensions, will also be vital to watch.
Top Economic Events to Watch This Week
1 – German Flash Manufacturing PMI – Monday – 8:00 GMT
i-German Flash Manufacturing PMI: Markit typically releases this data, which examines business conditions in the manufacturing sector. The manufacturing PMI is a crucial indicator of business conditions and the overall economic conditions in Germany, as the manufacturing industry controls a large part of the total gross domestic product (GDP).
In this case, readings above 50 are seen as positive or bullish for the European currency (EUR), while those below 50 are seen as negative or bearish for the Euro.
DATE: Mon August 2, 2021 15:55
ii-French Flash Services PMI: Markit Economics publishes this data, to capture business conditions in the services sector. The services PMI is a crucial indicator of the overall economic conditions in France, because the services sector controls a large part of the total gross domestic product (GDP).
Results above 50 are viewed as bullish for the European currency, whereas results below 50 are understood as bearish for the EUR.
Wednesday, August 4, 2021, at 15:55
2 – German Final GDP q/q – Tuesday – 7:00 GMT
The Gross Domestic Product is usually released by the Statistisches Bundesamt Deutschland. It measures the total value of all goods and services produced in Germany. The GDP is seen as a full measure of German economic activity and health.
That is why an upward reading or a better than expected figure positively impacts the European currency. Conversely, a downward reading is seen as negative (or bearish) for the Euro.
DATE: Fri July 30, 2021 16:00
3 – German Ifo Business Climate – Wednesday – 8:00 GMT
The German ifo Business Climate is released by the ifo Institute. It provides essential data, due to its large sample size and historical correlation with economic conditions in Germany and the broader Eurozone. It has had a substantial impact on the market since its release.
It is a crucial indicator of economic health. Businesses react instantly to market conditions, and changes in the sentiment can be an early signal of future economic activity, such as spending, investment and hiring. Furthermore, the ifo Institute surveys more than 7,000 companies, in order to assess the business situation and get an idea of short-term planning.
Positive economic growth is seen as bullish for the EUR, whereas a low reading is understood as a negative for the European currency.
DATE: Mon July 26, 2021 16:00
4 – 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, It us released by the Energy Information Administration. It is a key US indicator and mainly affects the Canadian dollar, due to Canada’s sizable energy sector.
This report tends to affect the oil price itself and, consequently, it has more impact on WTI crude futures. This report is the primary gauge of the balance in supply and demand in the market, leading to changes in production levels and price volatility. If the ‘Actual’ figure is lower than the ‘Forecast’ figure, it is seen as bullish for the US dollar.
DATE: Wednesday, August 18, 2021, at 22:30
5 – Jackson Hole Symposium – Thursday – All Day
This is an annual conference that has been sponsored by the Federal Reserve Bank of Kansas City since 1978. It has been held in Jackson Hole, Wyoming, since 1981. It is a conference where central bankers, policy experts and academics come together to concentrate on a given topic.
The meetings are closed to the press, but administrators usually talk with reporters throughout the day. The comments and speeches by central bankers and other influential officials significantly impact the market.
6 – AUD Retail Sales (MoM) – Friday – 2:30 GMT
The GMT is issued by the Australian Bureau of Statistics. It is a survey of goods sold by retailers, based on a sampling of retail stores of different types and sizes. It is understood as a broad indicator by which it is possible to measure whether the Australian economy is growing or shrinking.
The data shows the performance of the retail sector over the short and mid-term. Upward readings have a bullish impact on the Australian currency, whereas downward readings are seen as negative (or bearish) for the Australian dollar.
DATE: Wednesday, August 4, 2021, at 09:30