Week’s main events (August 19 – August 23)

This week, investors will focus on US Federal Reserve Chairman Jerome Powell’s speech at the central bank’s annual conference in Jackson Hole, where he will share his views on the future trajectory of interest rates. Hopes of a soft landing for the economy again drive US indices higher. Most market participants believe the Fed will cut rates at its upcoming September meeting. Also, this week, inflation data from the Eurozone, Canada, and Japan will be released. In Canada and the Eurozone, inflationary pressures are expected to ease, while economists forecast an increase in consumer prices in Japan. At the end of the week, eurozone countries will publish important data on manufacturing and services PMI that will show the economy’s health during high interest rates.

Monday, August 19

No major economic events are expected on Monday. The day will be relatively calm in terms of volatility.

Tuesday, August 20

In the Asian session, investors will focus on the People’s Bank of China’s (PBoC) interest rate decision. It is expected without surprises, but volatility on Asian indices will be increased. In the second half of the day, traders will evaluate inflation data in Canada and the Eurozone. Further price declines are expected, which may pressure EUR and CAD. Any surprise in the form of inflation growth may provoke a temporary rise in the currency.

Main events of the day:

– New Zealand Trade Balance (q/q) at 01:45 (GMT+3);
– China PBoC Loan Prime Rate at 03:15 (GMT+3);
– Australia Monetary Policy Meeting Minutes (m/m) at 04:30 (GMT+3);
– Switzerland Trade Balance (m/m) at 09:00 (GMT+3);
– Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
– Switzerland SNB Chairman Jordan Speaks at 12:30 (GMT+3);
– Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
– US FOMC Member Bostic Speaks at 20:35 (GMT+3);
– US FOMC Member Barr Speaks at 21:45 (GMT+3).

Wednesday, August 21

The main event on Wednesday will be the July FOMC minutes. The July Fed meeting left the door open for a rate cut next month. Most market participants believe that the Fed will cut rates at the upcoming September meeting, with the main debate being over the size of the cut – by a quarter percentage point or half a point. However, the minutes are unlikely to answer this question because all attention will shift to Powell’s speech at the symposium. Therefore, traders here should only expect a volatility spike. The US Crude Oil Reserves data, which greatly impacts oil prices, should also be on the trader’s list.

Main events of the day:

– Japan Trade Balance (m/m) at 09:00 (GMT+3);
– US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
– US FOMC Meeting Minutes at 21:00 (GMT+3).

Thursday, August 22

On Thursday, the annual meeting of politicians will begin in Jackson Hole, which is worth paying special attention to. Investors should also closely monitor the PMI data in the manufacturing and services sectors. These data show the health of the economy. As a rule, the growth of indicators is accompanied by a positive for the national currency and vice versa.

Main events of the day:

– Australia Manufacturing PMI (m/m) at 02:00 (GMT+3);
– Australia Services PMI (m/m) at 02:00 (GMT+3);
– Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
– Japan Services PMI (m/m) at 03:30 (GMT+3);
– German Manufacturing PMI (m/m) at 10:30 (GMT+3);
– German Services PMI (m/m) at 10:30 (GMT+3);
– Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
– Eurozone Services PMI (m/m) at 11:00 (GMT+3);
– UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
– UK Services PMI (m/m) at 11:30 (GMT+3);
– Jackson Hole Symposium at 15:00 (GMT+3);
– US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
– US Manufacturing PMI (m/m) at 16:45 (GMT+3);
– US Services PMI (m/m) at 16:45 (GMT+3);
– US Existing Home Sales (m/m) at 17:00 (GMT+3);
– US Natural Gas Storage (w/w) at 17:30 (GMT+3).

Friday, August 23

Since the rate cut in September is a done deal, investors will be waiting for clues as to the size of the rate cut. If Powell hints at a 0.5% cut, it would be a strong blow to the USD but positive for indices and gold. Conversely, if Powell hints at a strong economy, it will increase the probability of a 0.25% cut, already priced in. Traders should also not miss Japan’s inflation data. Economists forecast inflation to rise from 2.6% to 2.7% annually, which is to the benefit of the Bank of Japan (BoJ) and may be an additional factor to strengthen the yen.

Main events of the day:

– New Zealand Retail Sales (q/q) at 01:45 (GMT+3);
– Japan National Core CPI (m/m) at 02:30 (GMT+3);
– Singapore Consumer Price Index (m/m) at 08:00 (GMT+3);
– Canada Retail Sales (m/m) at 15:30 (GMT+3);
– Jackson Hole Symposium at 15:00 (GMT+3);
– US Fed Chair Powell Speaks at 17:00 (GMT+3);
– US New Home Sales (m/m) at 17:00 (GMT+3);
– UK BoE Gov Bailey Speaks at 22:00 (GMT+3).

by JustMarkets, 2024.08.19

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