Weekly Outlook, (Aug 30 – Sep 3, 2021): Top Economic Events to Watch This Week
Arslan Butt • 4 min read
The broad-based US dollar will end this week on a bearish track, as market optimism tends to undermine the safe-haven US dollar. Investors awaited the highly-anticipated speech by Federal Reserve Chair Jerome Powell, which was due on Friday.
In contrast to this, the losses in the US dollar were capped by the faster spread of the coronavirus. The recent blast at Kabul airport and reports of two or three US officials being injured also raised worries about the US response to the Taliban. These worries were seen as one of the key factors that kept a lid on any additional losses in the US dollar.
Looking ahead to next week, the series of Manufacturing PMI and unemployment rates, along with OPEC-JMMC meetings, and the ISM Services PMI, could drive plenty of headlines to keep the markets on the move. In addition to this, the US-China trade headlines, the US-Taliban tussle and coronavirus headlines will also be watched closely, as they could play a key role in determining risk levels in the market.
Top Economic Events to Watch This Week
The Manufacturing PMI data is typically released by the China Federation of Logistics and Purchasing (CFLP). It examines business conditions in the Chinese manufacturing sector. Readings above 50 indicate development in the Chinese economy, while figures under 50 signal contraction.
As the Chinese economy influences the global economy, this economic indicator impacts the Forex market. A result above 50 would be positive (or bullish) for the CNY. Conversely, if it comes in below 50, it is seen as bearish for the CNY.
DATE: Tuesday, Aug 31, 2021, 06:00
2 – CAD Gross Domestic Product (MoM) – Tuesday – 13:30 GMT
Gross Domestic Product (MoM) – Statistics Canada usually releases this data, which aims to measure the total value of all goods and services produced in Canada. The change in the GDP price index is considered a broad measure of Canadian economic activity and health. Thus, high figures are seen as positive or bullish for the CAD, while a downward reading is seen as bearish for the Canadian dollar.
DATE: Tuesday, Aug 31, 2021 17:30
3 – Aussie Gross Domestic Product (QoQ) – Wednesday – 2:30 GMT
Gross Domestic Product (QoQ) – This data is typically released by the Australian Bureau of Statistics. It takes a look at the total value of all goods and services produced in Australia. The GDP is understood as a key measure of economic activity and health. A growing trend has a positive or bullish effect on the AUD, and if it declines, it is seen as negative for the Australian currency.
ACTUAL: 1.8 %
CONS: 1.5 %
Wednesday, Sep 1, 2021, 06:30
4 – OPEC-JMMC Meetings – Wednesday – 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 the member countries and ensure the stabilization of oil markets, to ensure an efficient, economical and regular supply of petroleum to consumers.
They discuss multiple issues concerning the 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 the objectives of the meeting is released after the meeting.
5 – US ISM Manufacturing PMI – Wednesday – 15:00 GMT
ISM Manufacturing PMI – This data is typically released by the Institute for Supply Management (ISM). It indicates business conditions in the US manufacturing sector. It is one of the leading indicators of the overall economic situation in the United States. A result above 50 would be positive (or bullish) for the greenback. Conversely, a result below 50 is seen as bearish for the currency.
DATE: 05/03/2021 19:00
6 – US Unemployment Claims – Thursday – 13:30 GMT
This data is typically released by the US Department of Labor. It provides a measure of the number of people filing first-time claims for state unemployment insurance. A figure that is higher than expected shows weakness in the US labor market, which has a negative impact on the strength and direction of the US economy. Conversely, lower readings are seen as positive or bullish for the greenback.
DATE: Thu, Sep 02, 2021, 17:30
7 – US Employment Rate – Friday – 13:30 GMT
This data is typically released by the US Bureau of Labor Statistics. It is a percentage derived by dividing the number of unemployed workers by the total civilian labor force. In simple words, this data represents the number of people actively seeking employment and willing to work. Thus, a higher rate is seen in recessionary economies. Conversely, a developing economy sees its unemployment rate declining. So, a low readout is seen as bullish for the US dollar, while an increase is seen as negative (or bearish).
ACTUAL: 5.4 %
CONS: 5.7 %
DATE: Fri Sep 03, 2021 17:30
8 – ISM Services PMI – Friday – 15:00 GMT
ISM Services PMI – This data is typically released by the Institute for Supply Management (ISM). It measures business conditions in the US non-manufacturing sector. It is worth noting that the non-manufacturing sector does not influence the GDP or the ISM, either positively or negatively, compared to the GDP or the ISM. A result above 50 is seen as positive (or bullish) for the USD and a result below 50 is seen as bearish for the greenback.
DATE: Fri Sep 03, 2021, 19:00