Economic calendar for the week 30.08.2021 – 05.09.2021
Review of the main events of the Forex economic calendar for the next trading week (30.08.2021 – 05.09.2021)
The dollar fell, while the major US stock indexes rose last week. Gold quotes also rose, reaching a 3-week high above $1818.00 per ounce.
Speaking Friday at the annual economic forum in Jackson Hole, the Fed Chairman Jerome Powell reiterated the central bank’s plans to phase out stimulus policy. He also said that at the July Fed meeting, “like most of its participants, he supported the view that if the economy as a whole recovers in line with expectations, it may be appropriate to start slowing down” the purchases of assets on which the Fed has spent 120 billion dollars already this year. “While the delta strain poses short-term risk, the prospect of continuing to move towards maximum employment looks good,” Powell said.
However, Powell’s speech did not provide a clear signal on the timing of the start of such a curtailment. This suggests that it is unlikely to be expected before the November Fed meeting.
That being said, Powell remains confident that the jump in inflation this year is temporary. In his opinion, the current policy of the Fed is “well tuned.” “As always, we are ready to adjust it as appropriate to achieve our goals,” he added.
Market participants considered Powell’s speech positive enough not to start taking profits in long positions in the stock market. The dollar fell. Nevertheless, economists believe that its easing is unlikely to be sustained, given the pressure on the Fed from rising inflation.
The next week will be transitional between the coming end of August and the beginning of September and autumn. It will be marked by the publication of important macro statistics from China, Germany, Eurozone, the US, Australia, Canada, and Switzerland. But the focus of investors will be on the publication on Friday of monthly data from the US labor market, which, along with inflation and GDP data, are key for the Fed in determining the prospects for its monetary policy.
*during the coming week, new events may be added to the calendar and / or some scheduled events may be canceled
Monday, August 30
It’s Summer bank holiday in the UK and Commonwealth countries. Banks are closed on this day, and most of the population is dismissed from work. In this regard, trading volumes during the European trading session will be reduced.
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 August: +3.4% (against +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 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.
Tuesday, August 31
01:00 CNY China Services and Manufacturing PMIs from China Federation of Logistics and Purchasing (CFLP)
These indicators assess the state of the services sector and the manufacturing sector in the Chinese economy. A result above 50 is considered positive and strengthens the yuan. Previous PMI values for the services sector: 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 August: 52.8.
Previous PMI values for the manufacturing sector: 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 the value of 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 August: 50.2.
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.
Forecast for August 2021: +2.8% (YoY) against +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 than the forecast, the euro may drop sharply in the short term. Data better than the forecast and / or the previous value may strengthen the euro in the short term. We also remind 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 July 2021, Core CPI grew by +0.7%, +0.9% in June, +1.0% in May, +0.7% in April (in annual terms) after more modest values of +0. 2% between September and December 2020. If the data for August 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 August: +1.5%.
12:30 CAD Canada GDP. Annual data on Canada GDP
Canada’s GDP report is published by Statistics Canada. Strong report will strengthen the CAD. Weak GDP report will negatively affect the CAD. The previous report indicated a decline in Canada GDP (in May) by -0.3%.
Canada’s Quarterly GDP report reflects the total volume of all goods and services produced by Canada for the quarter (in annual terms) and is considered an indicator of the general health of the Canadian economy. In the previous 1st quarter of 2021, GDP grew by +5.6% (after growing by +9.3% in the 4th quarter and falling by -38.1% in the 2nd quarter of 2020). If the data for the 2nd quarter of 2021 turns out to be stronger than the previous value, the CAD will strengthen. Forecast: -0.2% in June and +6.7% in the second quarter. This is a positive data for the CAD, despite its relative decline (in monthly terms).
Wednesday, September 1
01:30 AUD Australia GDP (Q2)
Australian Bureau of Statistics will report on the country’s GDP, which is the main indicator of the state of the Australian economy, for the 2nd quarter. Strong report will strengthen AUD. Weak GDP report will negatively affect the AUD. Forecast: +0.5% (against +1.8% in Q1, +3.2% in Q4, +3.4% in Q3, -7.0% in Q2, -0.3% in Q1 of 2020). The growth of the indicator is a positive factor for the AUD, the decrease is negative. If the data turns out to be worse than the forecast, the AUD may decline sharply.
06:00 EUR Retail sales in Germany
Retail sales index 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% (+3.2% yoy) in July against +4.2% (+6.2% yoy) in June, +4.2% (-2.4% yoy) annualized) in May, -2.0% (+4.4% yoy) in April, +7.7% (+11% yoy) 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 the coronavirus. Better-than-expected data is likely to have a positive effect on the euro, but in the short term.
12:15 USD ADP National Employment Report
Typically, the ADP’s private sector employment report has a strong impact on the market and dollar quotes. An increase in the value of this indicator has a positive effect on the dollar. The US private sector workforce growth is expected to be +500,000 in August (against an increase of 330,000 in July, 692,000 in June, 978,000 in May, 742,000 in April, 517,000 in March, 117,000 in February, 174,000 in January, down -123,000 in December). The relative growth of the indicator may have a positive effect on the dollar quotes, while the relative decline in the indicator may have a negative effect. Therefore, the market reaction may be negative, and the dollar may decline if the data turns out to be worse than forecast.
Millions of Americans have previously been laid off due to the coronavirus pandemic and related quarantine measures. The bulk of layoffs were concentrated in tourism and retail. Other important sectors of the economy were also affected. ADP previously reported that the most significant drop in employment was recently noted in the construction and financial services sectors.
Although the ADP report does not directly correlate with the official US Labor Department data, which will be released on Friday, the ADP report is often a harbinger of it, having a noticeable impact on the market.
14:00 USD US Manufacturing PMI from 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: 58.6 in August (against 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.
Thursday, September 2
01:30 AUD Balance of Trade
The indicator (balance of trade) assesses the ratio between Australia’s exports and imports. Growth in exports from Australia leads to an increase in the trade surplus, which has a positive impact on the AUD. Previous value A$ 10.496 billion (June), A$ 9.681 billion (May), A$ 8.028 billion (April), A$ 5.574 billion (March), A$ 7.529 billion (February). A decrease in the trade surplus may negatively affect the Australian dollar. Conversely, the growing trade surplus is a positive factor for the AUD. Forecast for July: A$ 9.542 billion.
07:00 CHF Switzerland GDP for Q2
GDP is considered an indicator of the general state of a country’s economy and estimates the rate of its growth or decline. The Gross Domestic Product report expresses in monetary terms the aggregate value of all final goods and services produced by Switzerland over a given period of time. An upward trend in the GDP indicator is considered a positive factor for the national currency (franc), while a low result is considered negative (or bearish).
In the previous 1st quarter of 2021, GDP contracted by -0.5% (-0.5% YoY), after an increase of +7.6% in the 3rd quarter, a decrease of -7.0% in 2 quarter and a decrease of -1.7% in the first quarter of 2020. It seems that the situation with the GDP and the economy of Switzerland is improving after their fall in the first half of 2020, although this decline can not be compared with the fall in GDP in Germany, the Eurozone and the United States, however, at a very uneven pace. Switzerland’s GDP is projected to contract by 2.6% (YoY) in the 2nd quarter of 2021. The data indicate a slowdown in the recovery of the Swiss economy, which is a negative factor for the franc.
If the data turns out to be weaker than the forecast, the franc may decline in the short term. However, one should not expect a strong fall in the franc, as it is in active demand as a defensive asset. Better-than-expected data may strengthen the franc in the short term.
Friday, September 3
09:00 EUR Retail sales in the Eurozone
Retail sales is a major consumer spending indicator that shows the change in retail sales. A high result strengthens the euro, and vice versa, a low result weakens it. Forecast for July: +1.2% (+5.2% in annual terms) against +1.5% (+5.0% in annual terms) in June, +4.6% (+9.0% in annualized) in May, -3.1% and +23.9% (annualized) in March, +3.0% and -2.9% (annualized) in February, -5.9% and -6.4% (annualized) in January. The data suggests that, despite the rise in indices, retail sales have not yet reached pre-coronavirus levels after a sharp drop in March-April 2020, when strict quarantine measures were in force in Europe. Nevertheless, better-than-expected data is likely to have a positive effect on the euro.
12:30 USD Average hourly wages. Non-farm payrolls. Unemployment rate
The most important indicators of the state of the labor market in the United States in August. Forecast: +0.4% (against +0.4% in July, +0.3% in June, +0.5% in May, +0.7% in April, -0.1% in March, +0.2% in January and February, +0.8% in December, +0.3% in November) / +0.665 million (against +0.943 million in July, +0.850 million in June, +0.559 million in May, +0.266 million in April, +0.916 million in March, +0.379 in February, +0.049 million in January, -0.140 million in December, +0.245 million in November, +0.638 million in October, +1.763 million in July and -20.687 million in April 2020) / 5.2% (against 5.4% in July, 5.9% in June, 5.8% in May, 6.1% in April, 6.0% in March, 6.2% in February, 6.3% in January, 6.7% in December and November, 6.9% in October, 13.3% in May and 14.7% in April 2020), respectively.
In general, the indicators can be described as encouraging. The data speaks of continued improvement in the US labor market after plummeting in the first half of 2020. Prior to the coronavirus, the US labor market remained strong, signaling the stability of the American economy and supporting dollar quotes.
It is often difficult to predict the market reaction to the publication of indicators. Many indicators for previous periods are subject to revision. Now it will be even more difficult to do this, because the economic situation in the United States and many other large economies remains controversial due to the coronavirus. In any case, when data from the US labor market is published, a surge in volatility is expected in trading not only in USD, but throughout the entire financial market. Probably the most cautious investors will choose to stay out of the market during this time frame.
14:00 USD US Services PMI (from ISM)
This indicator assesses the state of the services sector in the US economy. These services sectors (as opposed to the manufacturing sector) have practically no impact on the country’s GDP.
In July, this indicator came out with a value of 64.1. A result above 50 is seen as positive for the USD. Outlook for August: 61.3, which is likely to have a positive overall effect on the USD. However, a deeper relative decline in the index could negatively affect the dollar in the short term.
Price chart of EURUSD in real time mode
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