Overview of the main events of the Forex economic calendar for the next trading week from 03.12.2018 to 09.12.2018.

Trading on key Forex news: we are awaiting the outcome of the G20 summit in Argentina, speeches by the leaders of the RB of Australia, the Bank of England, the Fed, and the Bank of Canada, the publication of data on the US labor market and Canada in November, as well as the results of the OPEC meeting.

Despite the very high volatility observed in November, major US stock indices still ended the month in a positive territory, albeit with a small gain. Investors are worried about the slowdown in global economic growth and the escalation of the trade conflict between the United States and China.

Nevertheless, the rise in US stock indices, which began at the end of the previous week, amid rising stock of retailers after Thanksgiving Day and Black Friday, was picked up by indices last week. This, in particular, was promoted by the rhetoric of the Fed leaders at the November meeting of the central bank.

Minutes published on Thursday show that the focus of attention of Fed officials has shifted to a possible slowdown in GDP growth, which may be larger than expected.

“Within future meetings, probably, a more pronounced emphasis should be placed on the analysis of incoming data when assessing the economic situation and the prospects for monetary policy,” the minutes said. “Such changes will demonstrate the Committee’s flexible approach (on open market operations) to the changing economic environment.”

Fed Chairman Jerome Powell said earlier on Wednesday that interest rates are "slightly below" the level considered neutral. In early October, he said that the Fed's key rate is "still far" from the neutral level.

The US dollar also maintained a positive trend last week. Moreover, the growth of the dollar may get accelerated if at the December meeting the Fedgives strong signals for further tightening of monetary policy in 2019.

The DXY dollar index, which tracks the US currency against a basket of 6 other major currencies, ended November with a slight increase of 28 points, although the volatility of the DXY index was 205 points last month.

Investors prefer the dollar as a defensive asset amid turbulence in global financial markets. They believe that the US economy will suffer less than others if the trade conflict escalates.

Financial market participants hope that this weekend, at a meeting in Buenos Aires during the G-20 summit the United States and China will find a way to alleviate tensions in trade relations. But many believe that the trade issue will continue to have a negative impact on the markets in the new year.

Next week, data on the US labor market will give market participants an up-to-date idea of ​​how actively the economy of this country is developing. Strong performance may force the Fed to accelerate interest rate increases, and this will once again push the dollar up. Participants in the oil market will follow the meeting of OPEC and the allies of the cartel, which will be held in Vienna next week. The pressure on Saudi Arabia, in fact the head of OPEC, and the allies of the cartel led by Russia, is growing, as the coalition, as many believe, must reduce production in order to limit the offer and provide support to prices.

In addition, the interest and trading opportunities for financial market participants next week will be in the publication of interest rate decisions by two of the world's largest central banks, the Republic of Australia and the Bank of Canada.

As always, a number of important macroeconomic data and several important news are expected to be published on the new trading week.

Monday, December 3

15:00 (GMT) USD PMI (by ISM) in the manufacturing sector of the US economy. Gradual inflation acceleration index (by ISM)

PMI index of business activity in the manufacturing sector of the US economy published by the Institute for Supply Management (ISM) is an important indicator of the state of the American economy as a whole. A result above 50 is considered as positive and strengthens the USD, one below 50 as negative for the US dollar. Forecast: 57.8 in November (against 57.7 in October), which is likely to have a positive impact on the US dollar.

The gradual inflation acceleration index published by the Institute for Supply Management (ISM) indicates business expectations for inflation in the United States. A high and growing value is seen as a positive factor and strengthens the USD, a low and decreasing value is seen as a negative factor for the US dollar. Forecast: 68.3 in November (versus 71.6 in October), which is likely to adversely affect the US dollar, since a lower value is expected than in the previous month.

Tuesday, December 4

03:30 AUD Interest rate decision. RBA's accompanying statement

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 “keeping rates unchanged is in line with targets for GDP, inflation”. If, in the subsequent accompanying statement, the RBA shows tough rhetoric regarding the economic outlook and the likelihood of a rate hike, this will be a bullish signal for the AUD.

Interest rates may remain unchanged even longer after 2018, given the weak wage growth and slowdown in the Australian economy. "The Board does not see a weighty argument in favor of adjusting the key interest rate in the short term," said one of the latest statements by the RBA.

Economists also warn that due to the weak housing market and the continued weakening of housing prices in large cities, the RBA will not change rates until 2020.

The ongoing trade tensions between the United States and China will be a major risk factor for the Australian economy and the Australian dollar next year.

09:15 GBP Speech by Bank of England Head Mark Carney

In one of his recent speeches, Mark Carney said that the management of the Bank of England does not doubt the ability of UK banks to cope if Brexit negotiations end in nothing. In his opinion, a British exit from the EU without an agreement would be a “real economic shock”. In this situation, raising or lowering interest rates by the Bank of England is not so important for the economy.

Probably, during his speech, Mark Carney will again talk about the prospects for the UK economy and the actions of the Bank of England in the conditions before the official UK exit date of the EU on March 29, 2019 and after.

Uncertainty about Brexit persists. Less than two weeks remain before the discussion of the Brexit agreement in the House of Commons (December 12), and many experts remain convinced that the British government will suffer a big defeat on first reading.

Wednesday, December 5

15:00 CAD The decision of the Bank of Canada on the interest rate. Statement of the Bank of Canada

The Bank of Canada decides on the interest rate. The Bank of Canada is expected to maintain an interest rate of 1.75%. Probably, on the eve of this meeting of the bank, the Canadian dollar will remain under pressure. Economists forecast a further slowdown in the Canadian economy amid falling oil prices and deferred effects of earlier increases in interest rates. The consequences of a tightening policy by the Bank of Canada, as well as a slowdown in wages and a weak housing market have a negative impact on the activity of the country's households.

In their accompanying statement, representatives of the Bank of Canada will explain the position of the bank and assess the current economic situation in the country. A hard tone of the accompanying statement of the Bank of Canada regarding rising inflation and the prospects for further monetary tightening will cause a strengthening of the Canadian dollar. If the Bank of Canada is followed by signals of extended period for maintaining a soft monetary policy, the Canadian currency will decline.

15:15 USD Speech by Fed Chairman Jerome Powell

After the Fed meeting in September, Powell confirmed the Fed’s plans for another interest rate increase in 2018 and 3 rate increases in 2019.

In one of his recent speeches, Jerome Powell expressed confidence in the "good condition" of the American economy. It is widely expected that in December, the Fed will raise the key interest rate.

As for further increases, Powell brought some doubt to the markets regarding the rates of these increases. Last Wednesday, he said that interest rates are "slightly below" the level considered neutral. In early October, he said that the Fed's key rate is "still far" from the neutral level. He also said that "policy (of the Fed) is not predetermined. We will pay close attention to incoming economic and financial data". At the same time, Powell reiterated his confidence in the American economy and considered the risks moderate.

New Powell's comments can affect both short-term and long-term USD trading if he again touches on the Fed's monetary policy topic. A more hawkish position on the Fed’s monetary policy is seen as positive and strengthens the US dollar, while a more cautious one is evaluated as negative for the USD.

If he makes unexpected statements, then volatility in trading in financial markets may increase. Any hints by Powell to the need for a cautious approach to raising interest rates will cause the dollar to fall and American stock markets to rise.

15:30 USD Weekly report of the Energy Information Administration of the US Department of Energy on the reserves of oil and petroleum products in US storages

As the Energy Information Administration (EIA) of the US Department of Energy reported last Thursday, the country's oil reserves rose again last week, this time by 3.577 million barrels. Total oil reserves in the United States now amount to 450.5 million barrels, which is the highest mark since the end of June. The growth of oil reserves had a negative impact on oil prices, which continued to decline after a sharp drop two weeks earlier. The fall in oil prices also contributed to the strengthening of the dollar and investors' concerns in slowing global economic growth.

The publication of data is usually accompanied by a surge in volatility in oil prices, which are denominated in US dollars.

Thursday, December 6

There are no important macro data scheduled to be published.

However, participants in the oil market will closely monitor the meeting of OPEC and the allies of the cartel, which will be held in Vienna. Many analysts of the oil market believe that OPEC should cut production in order to limit supply and support prices. Passivity of OPEC in this matter will cause a further decline in oil prices.

23:45 USD Speech by Fed Chairman Jerome Powell

Powell's comments can affect both short-term and long-term USD trading if he again touches on the Fed's monetary policy topic. A more hawkish position on the Fed’s monetary policy is seen as positive and strengthens the US dollar, while a more cautious one is evaluated as negative for the USD.

If he makes unexpected statements, then volatility in trading in financial markets may increase. Any hints by Powell to the need for a cautious approach to raising interest rates will cause the dollar to fall and American stock markets to rise.

Friday, December 7

10:00 EUR Eurozone GDP for the 3rd quarter (final assessment)

GDP is considered an indicator of the overall state of the Eurozone economy. The growing trend of GDP is considered positive for the EUR, a low result weakens the EUR.

Recently, macro data from the Eurozone has been indicating a slowdown in the European economy. Against the background of steadily low inflation, the risks of a slowdown in the European economy may force the ECB leadership to refrain from raising interest rates for a long time after the end of the QE program in December. Mario Draghi also previously stated that the QE program can be extended if necessary.

Forecast: in the third quarter, Eurozone GDP grew by + 0.2% (+ 1.7% in annual terms). The first and second preliminary assessments of the state of the European economy in the third quarter also indicated a growth of + 0.2% (+ 1.7% in annual terms). If the updated data is weaker, the euro will decline. Data better than the forecast and the previous estimate will strengthen the euro.

13:30 USD Average hourly wages. Non-farm payrolls. Unemployment rate

These are the most important indicators of the state of the labor market in the US in November. Forecast: + 0.3% (against + 0.2% in October) / 205,000 (against 250,000 in October) / 3.7% (against 3.7% in October).

In general, the indicators can be described as strong. If they coincide with the forecast or come out better, it will have a positive impact on the USD. However, it is often difficult to predict the market response to the publication of the indicators. In any case, when these indicators are published, a surge in volatility is expected in trading not only for USD, but also for the entire financial market. Probably the most cautious investors would prefer to stay out of the market during this time period.

13:30 CAD Changes in employment in Canada. Canada's unemployment rate

Statistics Canada will release data for November. Previous value: +11200 employees (in October). Forecast: +10000 employees. If the increase in the number of people employed in November is significantly weaker than the forecast, then the Canadian dollar may react with a decrease.

Unemployment in September was at 5.9%, and in October at 5.8%. In the case of rising unemployment, the Canadian dollar will decline. If the data is better than the forecast, the Canadian dollar will strengthen. Reducing unemployment is a positive factor for the CAD. Forecast: Unemployment rate in November 5.8%.

Price chart of EURUSD in real time mode

Economic calendar for the week 03.12 – 09.12.2018

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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