Economic calendar for the week 27.09.2021 – 03.10.2021
Review of the main events of the Forex economic calendar for the next trading week (27.09.2021 – 03.10.2021)
Having received support from the sharply increased US government bond yields, the dollar closed last week with a slight gain. The DXY dollar index reflecting the value of the dollar against a basket of 6 major currencies added 0.14% last week. The growth of the dollar was constrained by disagreements among the Fed leaders over the future plans of the central bank’s monetary policy.
Based on the forecasts presented last Wednesday at the Fed meeting, only half of its leaders believe that by the end of 2023, rates will need to be raised by 1 percentage point from current levels and by another three quarters of a percentage point in 2024.
The other half of the Fed officials called for even greater caution in raising rates, pointing to the risks associated with an increase in the number of cases of Covid-19, which could lead to another round of economic recession and a slowdown in the recovery of the labor market.
The American economy has created an estimated 4.7 million jobs to date, less than half of those lost since the start of the pandemic, when 10 million Americans lost their jobs. Also, most Fed leaders believe that inflation will slow to 2.3% in 2022 and to 2.2% in 2023.
Since the full recovery of the American labor market is still far away, judging by the latest data, the prospect of an increase in interest rates by the Fed may also move again to a later date, despite the official statement of the Federal Open Market Committee (FOMC), according to which the slowdown in asset purchases may be announced at the next meeting, which will take place on November 2-3.
At the same time, optimism seems to be returning to global stock exchanges.
So, following the results of a very volatile trading week, the main American stock indices closed it in positive territory with a small gain.
Next week will be transitional between September and October, as well as between the 3rd and 4th quarters of the year, and financial market participants will pay attention to the publication of important macro statistics from the US, Germany, Eurozone, Australia, China, the UK, and Canada.
*during the coming week, new events may be added to the calendar and / or some scheduled events may be canceled
Monday, September 27
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 indicator “durable goods orders”: -0.1% in July, +0.9% in June, +2.3% in May, -1.3% in April, +1% in March, -1.2% in February, +3.4% in January 2021.
Previous values of the indicator “capital goods orders ex defense and aviation”: 0% in July, +0.7% in June, +0.1% in May, +2.2% in April, +1% in March, -0.9% in February, +0.6% in January 2021.
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 August: +0.6% (durable goods orders), + 0.5% (capital goods orders ex defense and aviation).
It seems that the growth of indicators has slowed down, although it continues after their recovery in previous months from a sharp 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.
23:50 JPY Bank of Japan Monetary Policy Committee meeting
At this meeting, the Monetary Policy Committee of the Bank of Japan will once again sum up the results of the bank’s regular meeting last week, analyze the economic situation in Japan and give indications on possible future prospects for the Bank of Japan’s financial policy.
If the tone of the minutes of the meeting indicates the firmness of intentions of the Bank of Japan regarding monetary policy in the country, it will negatively affect the Japanese stock market and strengthen the yen. Conversely, a soft rhetoric about the bank’s monetary policy prospects will contribute to the weakening of the yen and the growth of the Japanese stock market.
Tuesday, September 28
00:30 AUD Retail Sales Index
Retail Sales Index is published monthly by the Australian Bureau of Statistics and measures total retail sales. The index is often considered an indicator of consumer confidence and reflects the health of the retail sector in the near term. A rise in the index is usually positive for the AUD; a decrease in the indicator will negatively affect the AUD. The previous value of the index (in July) was -2.7% (after falling by -1.8% in June). If the data turns out to be weaker than the previous value, the AUD may sharply decline in the short term, but if it’s above the previous values, the AUD is likely to strengthen.
Wedensday, September 29
No important macro statistics planned to be released.
Thursday, September 30
01:00 CNY China Services and Manufacturing PMIs from the China Federation of Logistics and Purchasing (CFLP)
These indicators assess the state of the services and the manufacturing sectors in the Chinese economy. A result above 50 is considered positive and strengthens the yuan. Previous PMI values for the services sector: 47.5 in August, 53.3 in July, 55.2 in May, 56.3 in March, 51.4 in February, 52.4 in January. The indicator is above 50, which is likely to have a positive effect on the yuan quotes, even with a slight relative decline. If the indicator is below 50, the yuan will be under pressure and likely to decline. Forecast for September: 53.2.
Previous PMI values for the manufacturing sector: 50.1 in August, 50.4 in July, 51.0 in May, 51.9 in March, 50.6 in February, 51.3 in January.
The relative growth of the index and the indicator above the value of 50 should have a positive effect on the CNY. The data above 50 indicates an increase in activity, which has a positive effect on the quotes of the national currency. In the opposite case, and if the indicator is below 50, the yuan will be under pressure and probably will decrease. Forecast for September: 50.2.
06:00 GBP UK GDP for Q2 (final estimate)
GDP is considered to be an indicator of the overall health of the British economy. The upward trend in GDP is considered positive for the GBP. The UK’s GDP was one of the highest in the world until 2016, when the Brexit referendum was held. Subsequently, its growth slowed down, and with the onset of the global coronavirus pandemic, the growth rate of British GDP went into negative territory altogether.
The preliminary forecast for the 2nd quarter was +4.8% (+22.1% YoY) after falling -1.6% in the 1st quarter of 2021, -19.8% in the 2nd quarter and +1.3% growth in Q4 2020). The main factors that can force the Bank of England to keep rates low are weak GDP and labor market growth, as well as low consumer spending. If the GDP data turn out to be even worse than the negative forecast (-1.5% and -6.1% in annual terms), it will put downward pressure on the pound. Strong GDP report will strengthen the pound.
09:00 EUR Consumer Price Index. Core CPI (preliminary release)
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 indicated low inflationary pressures and even a slowdown in inflation. However, in 2021, inflation in the Eurozone began to accelerate, periodically exceeding the target level of the ECB.
Previous CPI values: +3.0% in August, +2.2% in July, +1.9% in June, +2.0% in May, +1.3% in March, +0.9% in January and February. If the data turns out to be worse, the euro may fall sharply in the short term. Data better than the previous value may strengthen the euro in the short term. It should also be kept in mind that the target level of consumer inflation 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 August 2021, Core CPI increased by +1.6%, by +0.7% in July, +0.9% in June, +1.0% in May, by +0.7% in April (annual terms) after more modest values of +0.2% in the period from September to December 2020. If the data for September turn out to be worse than the previous value, it 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 respond 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.
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.
Previous indicator values: +3.4% in August, +3.1% in July, +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 previous values, 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. Data worse than the previous value will negatively affect the euro.
12:30 USD US Annual GDP for Q2 (final estimate)
GDP data is 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; a 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. The preliminary forecast for the 2nd quarter of 2021 was +8.2%, and the actual value is +6.6%.
23:50 JPY Tankan Large Manufacturers Index
This index reflects general business conditions for large manufacturing companies in Japan and is an indicator of the current state of Japan’s export-oriented economy, which is heavily dependent on the industrial sector.
Rising values and the value of the indicator above 0 (zero is the middle line) is a positive factor for the JPY, and the value of the indicator below 0 is negative.
According to the forecast, the index value is expected to be 13 (for the 3rd quarter of 2021) after rising to a value of 14 in the 2nd quarter of 2021 and falling to -10 in the 4th quarter of 2020 (-27 and -34 in the 3rd and Q2 2020, respectively), which is likely to support the yen, but above all Japanese stock indices, despite a slight relative decline in the indicator.
Friday, October 1
06:00 EUR Retail sales in Germany
Retail sales is the main indicator of consumer spending in Germany showing changes in retail sales. A high result strengthens the euro, and vice versa, a low result weakens it. Forecast: -0.9% (+3.7% yoy) in August against -5.1% (-0.3% yoy) in July, +4.2% (+6.2% yoy) annualized) in June, +4.2% (-2.4% yoy) in May, -2.0% (+4.4% yoy) in April, +7.7% (+11 % in annual terms) in March, +1.2% (-9.0% in annual terms) in February, -4.5% (-8.7% in annual terms) in January.
The data indicate the instability of the recovery of this sector of the German economy, including due to lockdowns due to coronavirus. Better-than-expected data is likely to have a positive effect on the euro, but in the short term.
14:00 USD US Manufacturing PMI (by ISM)
Published by the Institute for Supply Management (ISM), the US Manufacturing PMI is an important indicator of the health of the US economy as a whole. A result above 50 is seen as positive and strengthens the USD, one below 50 – as negative for the US dollar. Forecast: 59.9 in September (against 59.9 in August, 59.5 in July, 60.6 in June, 61.2 in May, 60.7 in April, 64.7 in March, 60.8 in February 58.7 in January, 60.7 in December). The index is above the 50 level and has a relatively high value, which is likely to support the dollar, despite the relative slight decline in the indicator. The data above the value of 50 indicates an acceleration of activity, which has a positive effect on the quotes of the national currency. If the indicator falls below the forecast and especially below the value of 50, the dollar may sharply weaken in the short term.
Price chart of EURUSD in real time mode
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