Weekly Outlook (11 – 15 Oct, 2021): Top Economic Events to Watch This Week
Arslan Butt • 4 min read
In this update, we are going to discuss the top economic events to watch this week. The broad-based US dollar ended the week on a bullish track amid, hopes that the Fed will start tapering its bond purchases as early as November, and raise interest rates in 2022. This, along with the latest rise in US Treasury bond yields, played a significant role in underpinning the US dollar. Besides this, the gains in the USD were further bolstered by the previously released upbeat US economic releases, which showed that the world’s largest economy remains on the recovery track.
However, the safe-haven dollar remained below the one-year high, on the back of an improvement in the risk sentiment. The riskier Australian dollar traded near the three-week high that it hit during the previous session, when it gained 0.55% against its US counterpart.
Looking ahead into the coming week, the series of economic sentiment and CPI releases, along with employment change and OPEC-JMMC meetings, could generate plenty of headlines to keep the markets on the move. The chatter surrounding the US stimulus package and geopolitical tensions will also be closely followed, as they could play a key role in determining risk levels in the market.
The Top Economic Events to Watch This Week
1. EUR – German ZEW Economic Sentiment – Tuesday – 5:00 GMT
The German ZEW Economic Sentiment is released by the Zentrum für Europäische Wirtschaftsforschung. It gauges institutional investor sentiment by comparing the proportion of optimistic investors to that of pessimistic analysts. Upward readouts indicate that the optimists outweigh the pessimists. Typically, an optimistic view is seen as bullish for the European currency. Conversely, a negative view is understood as bearish for the EUR.
ACTUAL : 26.5
Dev : -0.36
Consensus : 30
DATE: Tue Sep 7, 2021 14:00
2. US Consumer Price Index (MoM) – Wednesday – 8: 30 GMT
This data is normally published by the US Bureau of Labor Statistic: It aims to measure 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 seen as a critical indicator of inflation and changes in purchasing trends. So, higher readings are seen as positive (or bullish) for the greenback. Conversely, lower figures are seen as negative (or bearish) for the American currency.
ACTUAL: 0.3 %
CONS: 0.4 %
DATE: Tue Sep 14, 2021 17:30
ii) Consumer Price Index ex Food & Energy (MoM):
The US Department of Labor Statistics normally releases Consumer Price Index ex-Food & Energy data. 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 the interests of capturing an accurate representation. In simple words, high figures are considered positive for the US Dollar, while low figures are seen as bearish for the greenback.
ACTUAL: 0.1 %
CONS: 0.3 %
DATE: Tue Sep 14, 2021 17:30
3. AUD – Employment Change – Wednesday – 20:30 GMT
i) Employment Change: Employment Change data is normally published by the Australian Bureau of Statistics. It gauges the change in the number of employed people across Australia. An increase in this indicator has a positive impact on consumer spending, which tends to boost economic growth. Hence, high figures are considered bullish for the Aussie currency. Conversely, weaker figures are seen as negative (or bearish).
DATE: Thu Sep 16, 2021 06:30
ii) Unemployment Rate: This data is typically released by the Australian Bureau of Statistics, which measures the number of unemployed workers, divided by the total civilian labor force. It is one of the key indicators for the Australian economy, as the number of unemployed people is an essential sign of overall economic health, because consumer spending is highly correlated with labor-market conditions.
If the rate goes up, it shows a lack of expansion within the Australian labor market. The rise in the unemployment rate leads to weakness in the Australian economy. Low figures are seen as bullish for the AUD and a rise is seen as negative or bearish for the Aussie.
ACTUAL: 4.5 %
CONS: 4.9 %
DATE: Thu Sep 16, 2021 06:30
4. Crude Oil Inventories – Thursday – 11:00 GMT
The EIA Crude Oil stockpiles report is a weekly measure of the change in the number of barrels in the stocks of crude oil and its derivatives. It is released by the Energy Information Administration. It is a US key indicator and primarily 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 imbalances between supply and demand in the market, which lead to changes in production levels and price volatility. If ‘Actual’ is less than ‘Forecast’, it is seen as bullish for the USD.
5. OPEC-JMMC Meetings: – Thursday – 14:00
Representatives from the 13 OPEC member countries, as well as 11 other oil-rich countries, attend these meetings. The goal of this meeting is to coordinate and harmonize the petroleum policies of the member countries, and to ensure the stabilization of oil markets, in order to provide an efficient, inexpensive, and consistent supply of petroleum to consumers.
They debate on a variety of energy market concerns, but most important of all, they agree on how much oil they will produce. After the meeting, the officials typically speak with the media throughout the day. The formal statement detailing policy adjustments and meeting objectives is issued following the conclusion of the sessions.
6. US Retail Sales (MoM) – Friday – 8:30 GMT
The US Census Bureau publishes this data, which is a survey of goods sold by retailers, based on a sampling of retail stores of different types and sizes. It is considered a key indicator to measure the pace at which the US economy is growing or receding. The data shows the performance of the retail sector over the short and mid-term. Positive economic growth has a bullish effect on the US currency, while a downward figure is seen as negative (or bearish) for the US dollar.
ACTUAL: 0.7 %
DATE: Thu Sep 16, 2021 17:30