Financial calendar for the week 26.07.2021 – 01.08.2021


Economic calendar for the week 26.07.2021 – 01.08.20212021-07-25 2021-07-25 Jana Kanelogo2021-07-25 2021-07-25 Economic calendar for the week 26.07.2021 – 01.08.2021Jana Kanelogo

Review of the main events of the Forex economic calendar for the next trading week (26.07.2021 – 01.08.2021)

Trading on key Forex news: next week we expect the publication of important macro statistics from Germany, Australia, Canada, the US, the Eurozone, as well as the results of the meeting of the US central bank devoted to monetary policy issues.

Despite high volatility and a sharp decline at the beginning of last week, the dollar and major US stock indices still went up.

The dollar is in demand as a defensive asset amid concerns about the continued spread of the coronavirus, and continued positive macro data from the US support stock indices.

The dollar continues to strengthen little by little, despite assurances from the Fed leaders that the time has not yet come to roll back the stimulating policy.

Earlier, the Fed officials have repeatedly stated that they will not slow down the rate of bond purchases until they see "significant further progress" in achieving the inflation target of 2% and the labor market reaching pre-crisis (before the pandemic) levels.

However, it is increasingly difficult for Fed leaders to contain the dollar's strengthening amid rising inflation, which has shown record growth rates over the past 29 years. Sooner or later, they will have to start curtailing the stimulating policy. In this regard, next week's meeting of the Fed will be of particular interest. It will end on Wednesday with the publication of the decision on rates.

Earlier, the Fed officials said that they would warn the markets in advance about the curtailment of stimulus. Therefore, most likely, they are unlikely to start the curtailment at this meeting.

Nevertheless, the intrigue around the intentions and actions of the Fed remains, since after the meeting in June, 13 out of 18 Fed leaders predicted a rate hike before the end of 2023, and 7 – before the end of 2022.

Next week, financial market participants will also pay attention to the publication of important macro statistics from Germany, Australia, Canada, the United States, and the Eurozone.

*during the coming week, new events may be added to the calendar and / or some scheduled events may be canceled

**GMT time

Monday, July 26

No important macro statistics planned to be released.

Tuesday, July 27

07:30 JPY Speech by the Head of the Bank of Japan Haruhiko Kuroda

In his speech, the head of the Bank of Japan Haruhiko Kuroda will give some comments on the bank's monetary policy. "It is necessary to patiently continue to ease the monetary policy," – Kuroda said almost traditionally. Markets usually react noticeably to Kuroda's speeches if he touches on the topic of monetary policy and makes unexpected statements. Volatility at such moments usually grows not only in the yen trade, but throughout the Asian and global financial markets. If he does not touch on monetary policy issues, the reaction to his speech will be weak.

12:30 USD Durable goods orders. Capital goods orders (ex defense and aviation)

This indicator reflects the value of orders received by manufacturers of durable goods and capital goods (capital goods are durable commodities used to produce durable goods and services) involving large investments. Commodities produced in the defense and aviation sectors of the US economy are not included in this indicator. A strong result strengthens the USD. Previous values ​​of the "durable goods orders" indicator: +2.3% in May, -1.3% in April, +1% in March, -1.2% in February, +3.4% in January 2021 , +1.2% in December, +1.3% in November, +1.8% in October, -18.3% in April, -16.7% in March, +2.0% in February, – 0.2% in January 2020.

Previous values ​​of the indicator "capital goods orders ex defense and aviation": +0.1% in May, +2.2% in April, + 1% in March, -0.9% in February, + 0.6% in January 2021, +1.5% in December, +1.2% in November, +1.9% in September, +2.1% in August, -6.6% in April, -1.3% in March, -0.6% in February, +0.9% in January 2020.

In theory, the relative growth of the indicator has a positive effect on the dollar; the market reaction to its negative value may be negative for the dollar in the short term. Data worse than the previous value will also negatively affect the dollar quotes.

Forecast for June: +2.1% (durable goods orders), +0.6% (capital goods orders ex defense and aviation).

It seems that the growth of indicators continues after their recovery in previous months from a strong drop in March and April 2020, which should have a positive effect on the dollar quotes. Better-than-expected data will also have a positive impact on the dollar.

Wednesday, July 28

01:30 AUD RBA trimmed mean core inflation index (Q2). Consumer Price Index (Q2)

This indicator is published by the RBA and the Australian Bureau of Statistics. It reflects the dynamics of retail prices of goods and services included in the consumer basket. The simple trimmed mean method takes into account the weighted average kernel, the central 70% of the index components. Previous index values: +0.3% (+1.1% on an annualized basis) in the 1st quarter of 2021, +0.4% (+1.2% on an annualized basis) in the 4th quarter of 2020. According to the forecast, it is expected that the value of the indicator for the 2nd quarter of 2021 will be +0.5% (+1.6% in annual terms). Despite the relative growth, this is still a weak value. If the value of the indicator turns out to be worse than the forecast, it is likely to further negatively affect the AUD. The data indicate low inflationary pressures in the country. The growth of the indicator above the forecast should have a positive effect on the AUD in the short term.

Consumer Price Inflation Index (CPI) published by the RBA and the Australian Bureau of Statistics measures the dynamics of retail prices for goods and services in Australia. CPI is the most significant indicator of inflation and changes in consumer preferences. A high reading is positive for the AUD, while a low reading is negative. Previous values ​​of the indicator: +0.6% (+1.1% in annual terms) in the 1st quarter of 2021, +0.9% (+0.9% in annual terms) in the 4th quarter of 2020. According to the forecast, it is expected that the value of the indicator for the 2nd quarter of 2021 will be +0.9% (+1.4% in annual terms). The expected positive reading is unlikely to provide significant support for the AUD, indicating low inflationary pressures in the Australian economy. If the indicator comes out with a value worse than expected, it is likely to put pressure on the AUD.

12:30 CAD Consumer price indices in Canada

Core CPI from the Bank of Canada reflects the dynamics of the retail prices of the corresponding basket of goods and services (excluding fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation, and tobacco products). The inflation target for the Bank of Canada is in the range of 1-3%. The rise in CPI is a harbinger of a rate hike and a positive factor for the CAD. Core Consumer Price Index increased in May 2021 by +0.4% (+2.8% in annual terms), in January 2021 by +1.6%, in December 2020 by +0.7%, in November by +1.5%, in October and September +1.0% (in annual terms). If the data for June turns out to be worse than the previous values, it will negatively affect the CAD. The data better than the previous values will strengthen the Canadian dollar. Forecast: Core CPI rose +2.4% in June (YoY), which is likely to have a positive impact on the CAD despite the relative decline in the indicator.

18:00 USD The Fed's decision on the interest rate. Comments on monetary policy

In March 2020, the Fed sharply lowered the interest rate (to 0.25% from 1.75% in February), and also announced the allocation of $700 billion for the purchase of US government bonds and mortgage-backed securities. Subsequently, the Fed has repeatedly announced additional measures to support the American economy and inject cheap liquidity into the financial system. Usually, with the easing of the monetary policy, the national currency becomes cheaper and its quotations go down.

In 2020, the dollar declined as investors withdrew funds from defensive assets, buying more risky and profitable assets on the stock market, which continued to grow despite the threat of a second wave of the coronavirus epidemic and the associated economic slowdown. The role of the dollar as a defensive asset was also declining. However, in 2021, the dollar has been strengthening, which is associated with an increase in the yield of US government bonds, and the Fed has not yet responded to this in any way.

The rate is widely expected to remain at 0.25% at this meeting. Nevertheless, during the period of publication of the decision on the rate, volatility may sharply increase throughout the financial market, primarily in the American stock market and in the dollar quotes, especially if the decision on the rate differs from the forecast or unexpected statements are received from the Fed leaders.

Powell's comments may affect both short-term and long-term USD trading. A more hawkish stance on the Fed's monetary policy is seen as positive and strengthening the US dollar, while a more cautious position is seen as negative for the USD. Investors are eager to hear Powell's views on the Fed's future plans for this year.

18:30 USD Press conference of the FOMC

The press conference of the US Federal Open Market Committee lasts about an hour. The first part contains the reading of the ruling, followed by a series of questions and answers that can increase market volatility. Any hints by Powell about the possibility of a change in the current monetary policy will cause an increase in volatility in the dollar quotes and in the American stock market.

Thursday, July 29

12:00 EUR Harmonized Index of Consumer Prices (HICP) in Germany (preliminary release)

This index is published by the EU Statistical Office and is calculated on the basis of a statistical method agreed between all EU countries. It is an indicator for assessing inflation and is used by the Governing Council of the ECB to assess the level of price stability. A positive result strengthens the EUR, a negative one weakens it.

Preliminary forecast for July: +3.0% (against +2.1% in June, +2.4% in May, +2.1% in April, +2.0% in March, +1.6% in January and February, -0.7% in December and negative values ​​in the second half of 2020) in annual terms. If the data turn out to be better than the forecast, the euro may strengthen in the short term. The growth of the indicator is a positive factor for the euro. The data suggests increasing inflationary pressures in Germany. The data worse than the forecast and the previous value will negatively affect the euro.

12:30 USD US Annual GDP for Q2 (preliminary release)

GDP data are one of the key indicators (along with data on the labor market and inflation) for the Fed in terms of its monetary policy. Strong result strengthens the US dollar; weak GDP report negatively affects the US dollar. In the previous 1st quarter, GDP grew by +6.4%, in the 4th quarter – by +4.3% after growing by +33.4% in the 3rd quarter of 2020, and after falling by -31. 4% in Q2 and -5.0% in Q1 2020.

If the data points to a decline in GDP in the 2nd quarter, the dollar will come under pressure. The positive data on GDP will support the dollar and the American stock indices, although they are already mostly priced in. Preliminary forecast for Q2 2021: +8.2%.

Friday, July 30

06:00 EUR Germany GDP for Q2 (preliminary release)

GDP is considered the most important indicator of the overall health of the economy. The growing trend in the GDP indicator is considered positive for the national currency. The German economy is the locomotive of the entire European economy. A high value of GDP is considered a positive factor for the EUR, while a low one is considered negative.

The growth of the European and German economies slowed sharply in 2019, and in 2020 the European economy has already entered a recession in many ways. The risk of a coronavirus pandemic has been added to the domestic political risks after Brexit.

If the GDP data turns out to be weaker than the forecast, it will put even more downward pressure on the euro. Better-than-expected data may strengthen the euro in the short term. However, the risks for the euro are directed towards its further weakening.

Forecast: German GDP grew by +2.0% in the 2nd quarter (+10% in annual terms).

09:00 EUR Eurozone GDP for the 2nd quarter (first estimate). Consumer Price Index. Core CPI (preliminary release)

GDP is considered to be an indicator of the overall health of the economy. The upward trend in GDP is considered positive for the EUR; a poor result weakens the EUR.

Recently, macro data from the Eurozone have been indicating a gradual recovery in the growth rate of the European economy after a sharp drop in early 2020.

Thus, according to the forecast of economists, GDP growth in the Eurozone is expected in the 2nd quarter of 2021 by +1.5% (+13.2% in annual terms) after falling by -0.3% (by -1.3% in annual terms). ) in Q1 2021, -0.7% (-4.9% YoY) in Q4 2020, +12.5% ​​growth (-4.3% YoY decline) terms) in the 3rd quarter, a fall of -11.8% (-14.7% in annual terms) in the 2nd quarter and a fall of -3.6% (-3.1% in annual terms) in the 1st quarter of 2020.

If the data turn out to be weaker than the forecast, the euro may decline. Better-than-forecast data may strengthen the euro in the short term, although it is still far from the full recovery of the European economy even to pre-crisis levels (quarterly growth within 0.2% – 0.4%).

Consumer Price Index (CPI) is published by Eurostat and measures the price change of a selected basket of goods and services over a given period. The index is a key indicator for assessing inflation and changes in purchasing habits. A positive result strengthens the EUR, a negative one weakens it. At the end of 2020, the CPI index fell by -0.3%, which indicates low inflationary pressures and even a slowdown in inflation. Forecast for July 2021: +2.0% (YoY) against +1.9% in June, +2.0% in May, +1.3% in March, +0.9% in January and in February. If the data turns out to be worse than forecast, the euro may fall sharply in the short term. Data better than the forecast and / or the previous value may strengthen the euro in the short term. Recall that the target level of consumer inflation set by the ECB is slightly below 2.0%.

Core Consumer Price Index (Core CPI) determines the change in prices of a selected basket of goods and services for a given period and is a key indicator for assessing inflation and changes in consumer preferences. Food and energy have been excluded from this indicator to provide a more accurate estimate. A high result strengthens the EUR, while a low result weakens it. In June 2021, Core CPI rose by +0.9%, +1.0% in May, +0.7% in April (in annual terms) after more modest values ​​of +0.2% in the period from September to December 2020. If the data for July turn out to be worse than the previous value or forecast, this may negatively affect the euro. If the data turn out to be better than the forecast or the previous value, the euro is likely to react with an increase in quotations, but only in the short term. Core inflation in the Eurozone remains low, which is a negative factor for the euro. Forecast for July: +0.8%.

Price chart of EURUSD in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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