Interest rate decisions dominate the economic calendar during the trading week.
The week begins with a relatively quiet day on Monday for calendar events, as the U.K. banking system is closed (on Monday only) for the May bank holiday. Therefore, trading in forex, particularly in GBP related pairs, could experience less volume during the day. In the Sydney Asian session the latest New Zealand dairy auction results will be published, data which is closely monitored due to the economy’s reliance on dairy exports to Asia. From China the latest Caixin services and composite readings will be broadcast, data which can impact on the value of yuan and set the tone for global markets, if the metrics miss or beat forecasts, by any distance.
There’s a slew of IHS Markit PMIs published relating to the European economy on Monday morning between 8:45am and 9:30am U.K. time; Italy, France, Germany and the E.Z. services and composite readings will be revealed. Retail growth figures for the E.Z. will also be published at 10:00am; Reuters forecast a reading of -0.1% monthly in March and 1.6% yearly, a significant fall which could have a negative impact on the value of the euro. The key high impact news relating to the North American economy broadcast in the afternoon session, relates to a speech to be delivered at 18:45pm U.K. time, by Stephen Poloz, the bank of Canada Governor, narrative which could affect the value of CAD versus its peers.
Tuesday’s significant calendar events begins with a raft of data concerning the Australian economy; at 2:30am U.K. time the latest retail sales figures will be published as is the trade balance, data which could impact on the value of the Aussie dollar. However, at 5:30am focus will turn to the latest RBA interest rate decision, as Australia’s central bank is forecast to lower the rate from 1.5% to 1.25%. Such a reduction, if various news agencies such as Bloomberg and Reuters are proved to be correct, could have a significant impact on the value of the Aussie dollar versus its peers. Sandwiched in between this series of Australian releases, is the prediction by New Zealand’s central bank for CPI inflation.
Europe’s calendar news begins at 7:00am U.K. time with Germany’s factory orders, which are forecast by Reuters to reveal a significant improvement; both month on month and year on year. Monthly for March, an improvement from -4.5% to 1.5% is predicted, with the yearly improvement predicted to come in at -5.4%, from the -8.4% metric recorded for February. At 8:30am the latest construction PMI for Germany will be published and at 10:00am the E.U. commission delivers its latest economic forecast.
Once the New York trading session opens, the latest JOLTS (job openings) in the USA will be broadcast. Two fed officials will deliver speeches, one in Beijing China. Late evening, at 20:00pm U.K. time, the latest consumer credit figures for the USA will be revealed. Thereafter, focus will turn to the latest communique from the Bank of Japan, as the BOJ releases the latest monetary policy meeting minutes for its March meeting, a release which could impact on the value of yen. The extended holiday period in Japan, due to the ceremonial handover of Emperor powers, has caused less yen trading on FX markets over recent sessions, this should return to the norm, during the week beginning May 5th.
The main economic calendar news on Wednesday begins with China’s import and export data, analysts will be looking for improvements as the China-USA trade war and tariff issues begin to relent on global trade. The trade balance should therefore show signs of improvement. Japan’s latest services and composite readings will also be published early in the Sydney-Asian session. New Zealand’s central bank, the RBNZ, will reveal its latest interest rate decision at 3:00am U.K. time. If the Reuters forecast is met, and the rate is dropped from 1.75% to 1.5%, increased speculation and movement in the value of the kiwi dollar, NZD, is likely to occur. Late evening at 9:00pm, the Governor of the RBNZ will explain any decision, to a select panel of MPs.
Early European news initially centres on Swiss unemployment; scheduled to remain constant at 2.4% and German industrial production, forecast to fall to -2.7% year on year up to March. At 12:30pm U.K. time, the President of the ECB, Mario Draghi will deliver a speech in Frankfurt. USA calendar data centres on mortgage applications and energy inventory information provided by the DOE, that could impact on the value of WTI oil, which has undergone several spikes in value over recent weeks, as the Iranian and Venezuelan issues have weighed heavily on sentiment.
On Thursday, the latest CPI China reading is forecast to reveal a rise to 2.5% from 2.3% in April year on year, which could indicate an overall improvement in Chinese commerce. There’s very little data published for the Eurozone economy during the day’s sessions, focus quickly turns to the USA economic data, to include the latest series of PPI figures for April, both monthly and yearly. The latest balance of trade deficit for March is predicted to reveal a deterioration to -$51.1b after posting a marginal improvement down to -$49.4b in February. Jobless claims are forecast to reduce, on a weekly and continuous basis, whilst wholesale trade sales figures, are predicted to remain stable. Late evening, focus will turn to the New Zealand economy, as credit card spending figures will be revealed, at 23:45pm U.K. time. Thereafter, a slew of Japanese data on: household spending, cash earnings, and bond sales, will indicate levels of health in Japan’s economy.
China’s latest April loan figures, are the first major high impact figure published on Friday, forecast to show a significant fall, which could indicate a lack of confidence in China’s overall recovery. At 2:30am U.K. time, the Aussie dollar could experience increased speculation, as the RBA central bank releases its latest monetary policy statement.
European data firstly centres on Germany’s: trade balance, current account and export/import figures, scheduled for publication at 7:00am U.K. time. All are forecast to show significant improvement, which could have a positive impact on the value of the euro versus its peers, depending on the results posted. At 9:30am U.K. time, focus will quickly turn to the value of GBP pairs as the U.K. statistics agency the ONS publishes the latest GDP growth figures, both monthly quarterly and annually. Year on year growth is predicted to rise to 1.8% from 1.4%, the first quarterly growth at 0.5% and monthly for March at 0.00%, month on month. The GDP figures are broken down into various sectors; industrial production growth, manufacturing and construction. Export and import data for the U.K. will also be delivered, combined with the latest trade balance data.
The day’s North American data begins with Canada’s unemployment and employment data published at 13:30pm, the unemployment rate, wage data, and participation rate are likely to remain unchanged, with those employed rising by 15k in April from -7.2k in March. The cumulative impact on the value of CAD could be positive, if improved employment numbers are regarded as bullish for Canada’s economy. Various inflation data is published for the USA on Friday; CPI is forecast to rise marginally to 2.1% annually, from 1.9% in March. Wages are also predicted to show improvement. A rise in both figures could be positive for the value of USD and U.S. equity indices, if the figures are regarded as a positive sign that growth is continuing to improve.
« U.S. dollar firms due to FOMC policy and expectations that NFP numbers might surprise to the upside, sterling falls as Tory party loses seats in local govt areas. Chinese equity markets experience a significant sell off, after Trump makes threats regarding the lack of progress in the trade talks. »
