FX traders will focus on U.K. GDP, FOMC minutes, ECB interest rate decision, USA CPI and Chinese data, during a busy and pivotal week for economic calendar events
The economic calendar week begins on Monday with the latest data from Germany covering: export, imports, the current account and trade balance. The latest export and import data will be closely monitored due to Germany’s latest disappointing economic data, for example; factory orders, falling by circa -8.3% year on year, suggesting that Europe’s engine of manufacturing growth could be finding reverse gear and potentially facing a recession. Reuters are forecasting that imports into Germany could have fallen by -0.7% in February, with exports falling by -0.4%.
Such readings, when published at 7:00am U.K. time, before the London-European markets are fully open, could impact on the value of the euro, if FX traders react to the data. USA economic data published on Monday involves the latest factory orders, which are forecast to have fallen by -0.5% in Feb, with durable goods orders down -1.6%. Both the USA equity indices and the U.S. dollar, appear to be relatively immune to any readings that miss or beat targets, as a consequence of the risk on mood underpinned by optimism that China and the USA, are now very close to agreeing a trade deal, resolving the tariff driven fall in commerce.
Tuesday morning begins with various Australasian data, which could impact on the value of both the Aussie and kiwi dollars. The latest house sales data for New Zealand will be closely watched; after falling by -9.5% YoY in February, analysts will be anticipating an improvement for March. At 2:30am U.K. time, February’s latest home loans and business investment data, will be published for the Australian economy, the expectation is for both readings to reveal an improvement. There is a lack of calendar data due for publication during the afternoon session. Late evening, early morning, a series of releases relating to the Japanese economy will be published. Reuters forecast that machine orders for February in Japan will make a significant recovery; coming in at 2.9% for Feb, rising from a -5.4% fall in January. Up to date bank lending data will also be broadcast for Japan, combined with the machine orders data the cumulative affect could cause changes in the value of yen, versus its peer currencies.
A raft of data concerning China’s economy will be delivered by Chinese officials in the early hours of the Sydney-Asian session on Wednesday; the latest loan figures will be closely watched, analysts expect to see a rise based on improved sentiment and business activity, as the China-USA trade talks have (apparently) been progressing over recent weeks. Wednesday morning at 9:30am U.K. time, a slew of data will be produced by the U.K. statistics agency the ONS.
The latest monthly GDP data for the U.K. is forecast to reveal zero growth in February, industrial and manufacturing production is predicted to fall, construction output is forecast to deliver a negative reading, whilst the index of services is also expected to reveal a fall. This wide ranging U.K. economic data will be broadcast on the day the European council meets to determine the fate of the U.K. The country is scheduled to leave the E.U. on Friday April 12th with no deal, unless the council extends the U.K. Brexit date. Based on the lack of panic displayed by both parties; the U.K. Parliament and the European council/commission, analysts are presuming an extension will be granted.
Wednesday’s key high impact event for the Eurozone, involves the latest ECB interest rate decision, due to be revealed at 12:45pm U.K. time. The widely held analyst expectation is for the rate to be held at 0.00%, with the deposit rate remaining in negative territory, at -0.4%. Naturally, focus will be on the monetary policy statement the ECB President Mario Draghi delivers after the decision is broadcast, analysts and FX traders will be looking for forward guidance clues, regarding a change to the current dovish policy.
From the USA we’ll receive the latest CPI (inflation) readings. The expectation is for a monthly rise to 0.4% in March from 0.2%, with yearly inflation rising to 1.8% from 1.5%. Such rises, if the forecasts are met, could see USD rise, if FX analysts and traders deduce that the FOMC/Fed have slack to raise the key interest rate above 2.5%, in the medium term during 2019. The overall sentiment of the FOMC will be revealed at 19:00pm U.K. time, when the latest minutes covering the March meeting will be published. This high impact event has the power to move the market in USD and equity indices, dependent on the tone struck by the committee, revealed by how unanimous any decision making appeared to be.
On Thursday morning, at 2:30am U.K. time, the latest Chinese inflation data is released, Reuters are forecasting a rise in CPI to 2.3%, from 1.5%, which could indicate significant growth returning to the Chinese economy, after Q3 and Q4 of 2018 were impacted by the tariffs imposition, applied by the Trump administration. Germany’s latest inflation data will be revealed at 7:00am U.K. time, the prediction is for no change at 1.4% YoY up to March, with the month on month figure also unchanged, at 0.4% for March.
North American data in the afternoon begins with the latest Canadian new house prices; expected to show a 0.1% rise annually. From the USA the latest producer price inflation figures will be broadcast; the year on year increase is forecast to fall to 2.4% year on year in March, from 2.5%. Initial and continuous unemployment claims are predicted to show marginal weekly increases, when the latest data is revealed at 13:30pm U.K. time.
Attention and focus will turn to the latest Chinese data early on Friday morning in the Sydney-Asian trading sessions, as the latest: export, import, and trade balance figures are published. Imports are forecast to display a significant improvement; rising to 7.7% in March, from a collapse of -20.7% year on year figure in February, with China’s trade balance also expected to show significant improvements. If the forecasts are met, during a week when analysts and investors expect China and the USA to announce a conclusion to their trade talks, Chinese equity markets could rise, setting the tone for global markets for the day’s remaining trading sessions.
Eurozone data on Friday involves the latest industrial production figure; the prediction is for a fall to -0.6% in February, from 1.4% growth in January. As concentration turns to USA economic calendar data in the afternoon, the latest Michigan, consumer confidence, survey index will be broadcast, the expectation is for a reading of 98.3 for April, a marginal fall from 98.4 in March.
« Focus turns to USA employment and unemployment data on Friday, as the latest NFP data is published, optimism rises over China-USA trade deal Yen rises in Sydney-Asian trading sessions, as current account balance improves, euro trades in narrow range as German data misses forecasts, oil spikes due to Libyan crisis »