Overview of the main events of the Forex economic calendar for the next trading week from 03.09.2018 to 09.09.2018
Trading on key Forex news: we are expecting the decisions of the RBA and Bank of Canada on the interest rates, as well as data from the US labor market in August
The markets were taken over by a pessimistic mood after reports that the Trump administration intends to impose duties on Chinese imports in the amount of $ 200 billion as soon as next week. The mood of market participants was also adversely affected by press reports that Donald Trump rejected the EU proposal to drop mutual duties on cars. The shares of the car sector in Europe fell the most significantly on Friday.
Fears about the growing trade tension between the US, on the one hand, and China, the EU, on the other hand, are likely to become the main negative driver of the stock markets early next week.
The US Commerce Department's report published last Thursday showed that the consumer price index (PCE), preferred by the Federal Reserve System as an inflation indicator, in July showed an increase of 2.3% (in annual terms). Core PCE index grew by 2.0%, closely approaching the target level of the Fed, which is 2%. According to official data released last week, the US economy grew by 4.2% in the second quarter.
Thus, a strong labor market, relatively high growth rates of GDP and inflation create prerequisites for more confident actions of the Fed regarding tightening of monetary policy. And this is the main fundamental factor for the further strengthening of the dollar. Its downward 3-week correction may be completed.
In addition to decisions of the central banks of Australia and Canada on interest rates, next week traders will be focused on the report on the US labor market in August, which will be released on Friday. Data on the unemployment rate and non-farm payrolls (NFP) will be published, but the dynamics of the average hourly wage of Americans will be of greatest interest in the report. The higher the salary, the higher the future inflation may be and the greater the impact this will have on the rhetoric and the actions of the Fed in relation to monetary policy.
As always, a number of important macroeconomic data and several important news are expected to be published on the new trading week.
Monday, September 3
There are no important macroeconomic news planned.
It is Labor Day in the US, the US exchanges will be closed, and therefore, trading volumes on financial markets will be insignificant.
Tuesday, September 4
07:30 (GMT+3) AUD Decision on the interest rate. Accompanying statement of the RBA.
Forecast: the rate will remain at the same level of 1.5%. As stated in the previous accompanying statements of the RBA, "strengthening the Australian dollar will complicate the adjustment of the economy", and "maintaining rates unchanged corresponds to the goals in relation to GDP and inflation". If, in the subsequent accompanying statement, the RBA shows tough rhetoric about the economic forecast and the probability of an early rate hike, this will be a bullish signal for the AUD.
Interest rates may remain unchanged for an even longer period after 2018, given the weak wage growth and the slowdown in the Australian economy. "The Board does not see any strong arguments in favor of adjusting the key interest rate in the short term," said one of the latest statements of the RBA.
Economists also warn that due to the weakness of the housing market and the continuing weakening of housing prices in major cities, the RBA will not change rates until 2020.
The resumption of trade tensions between the US and China will be the main risk factor for the Australian economy and the Australian dollar next year.
12:30 AUD Speech by head of the RBA Philip Lowe.
In his speech, Philip Lowe will assess the current situation in the Australian economy and point to further plans for the monetary policy of the department. Any signals from him regarding the change in the RBA monetary policy plans will cause a sharp increase in volatility in the trading of the AUD and on the Australian stock market.
15:15 GBP Inflation report.
The Governor of the Bank of England and the members of the Bank of England's Monetary Policy Committee will speak in Parliament with comments on the current economic situation and economic prospects. At this time, volatility in pound trading could rise sharply. One of the main benchmarks for the Bank of England regarding the prospects for monetary policy in the UK, in addition to GDP, is the inflation level. If the tone of the report is soft, the British stock market will receive support, and the pound will decrease. Conversely, tough rhetoric of the Bank of England's representatives in terms of containing inflation, implying an increase in the interest rate in the UK, will lead to a strengthening of the pound.
Wednesday, September 5
04:30 AUD GDP (2nd quarter).
Report of the Australian Bureau of Statistics on Australia's GDP, which is the main indicator of the state of the Australian economy, for the 2nd quarter. A strong report will strengthen the AUD. A weak GDP report will negatively affect the AUD. Forecast: + 0.9% (against + 1.0% in the previous quarter). The growth of the indicator is a positive factor for the AUD. If the forecast is confirmed or better than expected, the AUD will strengthen.
17:00 CAD Bank of Canada's interest rate decision. Accompanying statement of the Bank of Canada.
The National Bureau of Statistics of Canada reported on Thursday that in June the economy grew by 0% (+ 2.9% in Q2), which is generally the same as the forecast of the Bank of Canada for the 2nd quarter.
In its accompanying statement and a report on changes in monetary policy, representatives of the Bank of Canada will explain the bank's position and assess the current economic situation in the country. If the tone of the Bank of Canada's accompanying statement is tough, including with regard to rising inflation, the Canadian dollar will strengthen on the foreign exchange market. If the Bank of Canada gives signals that it has plans to extend the period of maintaining soft monetary policy, the Canadian currency will decline.
Thursday, September 6
There are no important macroeconomic news planned.
However, one should pay attention to the publication (at 15:30) of the report from the ADP on employment in the private sector of the American economy for August. This report usually has a strong impact on the market and the dollar quotes, although, as a rule, there is no direct correlation with Non-Farm Payrolls. Strong data positively affects the dollar. The number of employees in the private sector of the US is expected to grow by 187,000 (against +219,000 in July), which can be assessed as a strong result. A weaker result or data worse than forecasted could negatively affect the dollar .
Friday, September 7
12:00 EUR Eurozone GDP for the 2nd quarter (final estimate).
Recently, the Eurozone has shown macro data indicating a slowdown in the growth rate of the European economy. Against the backdrop of steadily low inflation, the risks of a slowdown in the growth of the European economy may pause the likelihood of the completion of the QE program for an indefinite period.
Nevertheless, ECB President Mario Draghi assured everyone at the press conference after the meeting of the central bank in July that the economic risks remain balanced and the slow growth rates in the first half of 2018 are temporary.
Forecast: in the second quarter of Eurozone GDP grew by 0.4% (+ 2.2% in annual terms). If the data are weaker, then the euro will decline. Data better than the forecast will strengthen the euro.
15:30 USD Average hourly wage. Non-Farm Payrolls. Unemployment rate.
These are most important indicators of the labor market in the US in August. Forecast: + 0.3% (against + 0.3% in July) / 187 000 (against 157 000 in July) / 3.9% (against 3.9% in July).
In general, the indicators can be referred to as strong. If they coincide with the forecast or are better, this will have a positive effect on the USD. However, it is often difficult to predict the market reaction to the publication of indicators. In any case, when these indicators are published, a surge in volatility is expected in the trades not only in the USD, but throughout the financial market. Cautious investors will prefer to stay out of the market in this time period.
15:30 CAD Change in the number of employed citizens in Canada. Unemployment rate in Canada.
Statistics Canada will publish data for August. Previous value: +54100 employed (in July). Forecast: +3300 employees. If the growth in the number of employed citizens in August proves to be weaker than the forecast, then the Canadian dollar may react with a decrease. Unemployment in July was 5.8%. If the unemployment increases, the Canadian dollar will decrease. If the data prove to be better than the forecast, the Canadian dollar will strengthen. Forecast: the unemployment rate in August was 5.9%. The rise in unemployment is a negative factor for the CAD.
Price chart of EURUSD in real time mode
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