Week’s main events (August 26 – August 30)

The US PCE Price report, the Federal Reserve’s preferred measure of inflation, is the most important data this week. Economists believe the figures will remain unchanged, which could play into the dollar’s hands, as it would tip the scales in favor of a 0.25% rate cut, not 0.5% at the September meeting. The Eurozone and Australian inflation data should also be on the trader’s list. Eurozone core inflation is estimated to fall from 2.6% y/y in July to 2.3% in August, bringing it closer to the ECB’s 2% target. In Australia, inflation will also be a dominant theme. In June, the annual Consumer Price Index fell to 3.8%. If there is no new progress in July, the RBA will almost certainly continue to rule out a rate hike this year, which will be positive for the Australian dollar.

Monday, August 26

Usually, Monday is an ordinary trading day with low volatility, but after the Jackson Hole symposium, the week may start very actively. In the US session, be on the lookout for US durable goods orders data. It is a leading indicator of production — growth in purchase orders is usually accompanied by currency appreciation. It is a bank holiday in the United Kingdom on Monday.

– New Zealand Trade Balance (q/q) at 01:45 (GMT+3);
– German Ifo Business Climate (m/m) at 11:00 (GMT+3);
– US Durable Goods Orders (m/m) at 15:30 (GMT+3).

Tuesday, August 27

On Tuesday, traders should evaluate Germany’s GDP data. The growth dynamics of the leading Eurozone economy have been weak in recent months, and economists expect a 0.1% annualized decline.

Main events of the day:

– German GDP (q/q) at 09:00 (GMT+3);
– US CB Consumer Confidence (m/m) at 17:00 (GMT+3).

Wednesday, August 28

On Wednesday, an important inflation report from Australia will be released. Inflation is expected to fall from 3.8% to 3.6% y/y. If the data turns out to be worse than expected, it may positively impact the Austrian dollar, as it will strengthen the probability that the RBA will not cut rates until the end of the year. Traders should also pay attention to crude oil inventory data. Due to weak data from China (a major oil importer), oil demand has recently declined, so the growth of inventories may hurt oil prices.

Main events of the day:

– Australia Consumer Price Index (m/m) at 04:30 (GMT+3);
– German GfK German Consumer Climate (m/m) at 09:00 (GMT+3);
– US Crude Oil Reserves (w/w) at 17:30 (GMT+3).

Thursday, August 29

Thursday will see the release of 2 important reports. The first report is German inflation data. Economists prognose that inflationary pressures in Germany will continue to weaken (2.3% → 2.2.% y/y). This may put pressure on the euro, as it will strengthen the probability of an ECB rate cut at the September meeting. The second report is the US GDP data. The report is expected to show 2.8% q/q economic growth, which could support the US dollar. Traders should also pay attention to the Natural Gas Storage data, which has a significant impact on natural gas prices.

Main events of the day:

– US FOMC Member Bostic Speaks at 01:00 (GMT+3);
– German Consumer Price Index (m/m) at 15:00 (GMT+3);
– US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
– US GDP (q/q) at 15:30 (GMT+3);
– US Pending Home Sales (m/m) at 17:00 (GMT+3);
– US Natural Gas Storage (w/w) at 17:30 (GMT+3);
– Switzerland SNB Chairman Jordan Speaks at 19:00 (GMT+3);
– US FOMC Member Bostic Speaks at 22:30 (GMT+3).

Friday, August 30

The PCE Price Index data will become the most important Friday release for investors. This data is also taken into account by the Fed to adjust monetary policy. The PCE data is expected to be the same as last month. However, in monthly terms, a 0.5% increase is expected. And while this may further ease recession fears, it may dampen hopes for aggressive rate cuts. Eurozone inflation data for August will be crucial for the European Central Bank’s interest rate decision for September. While core inflation is expected to fall, partly due to the fall in oil prices, the focus will be on core inflation and the services sector, where price growth has been more resilient. Also, investors should not miss the Tokyo Core inflation data, which is considered to be a leading indicator of national inflation. The growth of the indicators may support the yen, as the Bank of Japan is in the process of tightening monetary policy.

Main events of the day:

– Japan Tokyo Core CPI (m/m) at 02:30 (GMT+3);
– Japan Unemployment Rate (m/m) at 02:30 (GMT+3);
– Japan Retail Sales (m/m) at 02:50 (GMT+3);
– Australia Retail Sales (m/m) at 02:50 (GMT+3);
– German Retail Sales (m/m) at 09:00 (GMT+3);
– Switzerland KOF Leading Indicators (m/m) at 10:00 (GMT+3);
– German Unemployment Rate (m/m) at 10:55 (GMT+3);
– Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
– Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
– US PCE Price Index (m/m) at 15:30 (GMT+3);
– Canada GDP (m/m) at 15:30 (GMT+3);
– US Chicago PMI (m/m) at 16:45 (GMT+3);
– US Michigan Consumer Expectations (m/m) at 17:00 (GMT+3).

by JustMarkets, 2024.08.26

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