Week’s main events (August 12 – August 16)

This week, investors will focus on the RBNZ interest rate decision. Economists do not expect any changes, but there is a growing consensus among traders that the RBNZ will announce a 25 bps cut in the cash rate. The US will publish data on inflation, where consumer price pressures are expected to decline slightly. Indicators showing hovering inflation could add to fears that the Fed has derailed the economy by leaving rates high for too long. The UK will release inflation data on Wednesday, which will be closely watched for signs of lingering price pressures, especially in the still-hot services sector. Also worth watching this week are labor market data from the UK and Australia and GDP reports for key economies are also worth watching.

Monday, August 12

No major economic events are expected on Monday. The day will be relatively calm in terms of volatility. It’s a bank holiday in Japan.

Tuesday, August 13

In Tuesday’s European session, traders should focus on the UK labor market data. Ideally, Bank of England (BoE) policymakers need to see further declines before they are ready to cut rates again. In the US session, traders will monitor the inflation report produced in the US. This report is a precursor to consumer inflation, so the growth of these values will be extremely negative for the US dollar.

Main events of the day:

– Japan Producer Price Index (m/m) at 02:50 (GMT+3);
– Australia Wage Price Index (q/q) at 04:30 (GMT+3);
– UK Average Earnings Index (m/m) at 09:00 (GMT+3);
– UK Claimant Count Change (m/m) at 09:00 (GMT+3);
– UK Unemployment Rate (m/m) at 09:00 (GMT+3);
– German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
– Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
– US Producer Price Index (m/m) at 15:30 (GMT+3);
– US FOMC Member Bostic Speaks at 20:15 (GMT+3).

Wednesday, August 14

On Wednesday, all investors will focus on the RBNZ Interest Rate Decision and US inflation data. The RBNZ is expected to leave the rate unchanged. Still, easing expectations started gaining momentum after the previous meeting when policymakers expressed optimism about the prospects of inflation returning to the 1-3% target range in the second half of this year, which was later reinforced by the quarterly CPI report showing inflation falling to 3.3%. The probability of a rate cut at this meeting is around 60%. As for the US inflation report, no changes are expected. This may become a negative factor for the US dollar, as it will only strengthen economists‘ assumptions about the approaching recession in the US, which may cause new panic selling in the market. In the UK, inflationary pressures are expected to rise from 2.0% to 2.3% y/y, which may increase the likelihood that the Bank of England will become less dovish and not cut rates at its next meeting. Such a scenario is favorable for the British currency.

Main events of the day:

– New Zealand RBNZ Interest Rate Decision (m/m) at 05:00 (GMT+3);
– New Zealand RBNZ Monetary Policy Statement (m/m) at 05:00 (GMT+3);
– New Zealand RBNZ Press Conference at 06:00 (GMT+3);
– UK Consumer Price Index (m/m) at 09:00 (GMT+3);
– UK Producer Price Index (m/m) at 09:00 (GMT+3);
– Eurozone GDP (q/q) at 12:00 (GMT+3);
– Eurozone Industrial Production (m/m) at 12:00 (GMT+3);
– US Consumer Price Index (m/m) at 15:30 (GMT+3);
– US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
– New Zealand RBNZ Gov Orr Speaks at 21:00 (GMT+3).

Thursday, August 15

On Thursday, The Norwegian central bank will hold a monetary policy meeting. Analysts are divided on whether Norges Bank will cut or leave the rate unchanged. However, volatility with currency pairs with NOK will increase. It is also worth keeping a close eye on Australia’s labor market data. Robust data may bolster confidence that the RBA may hold the rate until the end of the year, which would be positive for AUD. Also, on Thursday, economic reports from China were worth paying attention to. Beijing recognizes the need for greater support for the economy. Therefore, weak data will increase this probability, a positive factor for Asian indices.

Main events of the day:

– Japan GDP (m/m) at 02:50 (GMT+3);
– Australia Unemployment Rate (m/m) at 04:30 (GMT+3);
– China Industrial Production (m/m) at 05:00 (GMT+3);
– China Unemployment Rate (m/m) at 05:00 (GMT+3);
– China Retail Sales (m/m) at 05:00 (GMT+3);
– Japan Industrial Production (m/m) at 07:30 (GMT+3);
– UK GDP (q/q) at 09:00 (GMT+3);
– UK Industrial Production (m/m) at 09:00 (GMT+3);
– UK Manufacturing Production (m/m) at 09:00 (GMT+3);
– UK Trade Balance (m/m) at 09:00 (GMT+3);
– Switzerland Producer Price Index (m/m) at 09:30 (GMT+3);
– Norwegian Norges Interest Rate Decision at 11:00 (GMT+3);
– Eurozone Account of Monetary Policy Meeting (m/m) at 14:30 (GMT+3);
– US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
– US Retail Sales (m/m) at 15:30 (GMT+3);
– US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
– US NY Empire State Manufacturing Index (m/m) at 15:30 (GMT+3);
– US Industrial Production (m/m) at 16:15 (GMT+3);
– US Natural Gas Storage (w/w) at 17:30 (GMT+3);
– US FOMC Member Harker Speaks at 20:10 (GMT+3).

Friday, August 16

The main event to watch on Friday is July’s UK retail sales data. Last month, retail sales were negative 1.2%. This time, it is predicted to rise 0.6%, which will be positive for the pound. However, any negative surprise will increase the probability of further rate cuts by the Bank of England (BoE) due to the pressure on the economy.

Main events of the day:

– New Zealand Producer Price Index (q/q) at 01:45 (GMT+3);
– Australia RBA Gov Bullock Speaks at 02:30 (GMT+3);
– New Zealand RBNZ Gov Orr Speaks at 05:30 (GMT+3);
– UK Retail Sales (m/m) at 09:00 (GMT+3);
– Eurozone Trade Balance (m/m) at 12:00 (GMT+3);
– US Building Permits (m/m) at 15:30 (GMT+3);
– US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

by JustMarkets, 2024.08.12

Open Account