Overview of the main events of the Forex economic calendar for the next trading week from 04.03.2019 to 10.03.2019
Trading on key Forex news: we expect the publication of important macro statistics from the Eurozone, China, USA, Canada, Australia, as well as the results of meetings of central banks of Australia, Canada, Eurozone. Traders should also pay attention to the speeches of the heads of the ECB, Bank of Canada, Bank of England, RB Australia, and the Fed.
The dollar reacted with a decline to the speeches by the Fed Chairman Jerome Powell last week in the US Congress. Powell confirmed that the central bank will not rush to raise interest rates while its leaders assess the impact of a slowdown in global growth and financial market instability on the US economy.
“Considering that our key rate is in the neutral range, that inflation pressure remains restrained, and also given the downside risks that we talked about, now is the time when one must be patient, watch and wait for the situation to evolve”, said Powell on Tuesday at the Senate Banking Committee.
Traders expected these words from Powell, however, the dollar still reacted with a decrease. Expectations for a new trade agreement between China and the United States also contributed to a lower dollar.
However, by the end of last week, the dollar rose, and the dollar index DXY reflecting its value against a basket of 6 major world currencies, moved into positive territory last Friday and rose to a mark of 96.36.
Positive US macro statistics, which was published on Thursday, contributed to the dollar growth: gross domestic product in the US rose by 2.6% per annum in the 4th quarter, after rising 3.4% in the 3rd quarter (the forecast was +2.2%). Compared with the same period in 2017, US GDP grew in the 4th quarter of last year by 3.1%.
Despite the relative decline in the index, economists accepted this information with satisfaction, and Fed Chairman Jerome Powell confirmed on Thursday evening that "the US economy is in good shape."
World stock indices also rose by the end of last week. Investor optimism has grown amid reports of the upcoming signing of a new trade agreement between China and the United States, whose economies are the largest in the world.
As always, a number of important macroeconomic data and several important news are expected to be published on the new trading week.
Monday, March 4
No important macro statistics are planned to be released, and the US exchanges will be closed due to the celebration of President's Day.
Tuesday, March 5
03:30 (GMT) AUD Decision on the interest rate. 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 a 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, given the weak wage growth and slowdown in the Australian economy. "The Board does not see any serious 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 weak housing market and the continued weakening of housing prices in large cities, the RBA will not change rates until 2020.
15:00 USD PMI ( by ISM) in the services sector
This indicator assesses the state of the services sector in the US economy. A value above 50 is considered positive and strengthens the USD. Forecast: 57.3 in February (against 56.7 in January). Probably, the dollar will strengthen after the publication of this indicator if it coincides with the forecast or is better.
15:35 GBP Speech by Bank of England President Mark Carney
Participants in financial markets are waiting for him to clarify the situation regarding the future policy of the central bank of Great Britain. Volatility during his speeches usually increases dramatically in the pound trade and in the FTSE index of the London Stock Exchange, in case Carney gives any hints of tightening or easing of monetary policy.
If he does not touch the monetary policy issues of the Bank of England, then the reaction to his speech will be weak.
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 manage if Brexit negotiations end in nothing. In his opinion, the exit of Great Britain 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, in 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 from the EU on March 29, 2019 and after.
22:10 AUD Speech by the head of the RBA Philip Lowe
In his speech, Philip Lowe will assess the current situation in the Australian economy and point out further plans for the monetary policy of the department. Any signals from him regarding changes in the plans of the monetary policy of the RBA will cause a sharp increase in volatility in the AUD trading and in the Australian stock market.
Wednesday, March 6
00:30 AUD GDP (4Q)
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 4th quarter. A strong report will strengthen the AUD. A weak GDP report will negatively affect AUD. Forecast: +0.4% (against +0.3% in the previous quarter). The growth rate is a positive factor for the AUD. If the forecast is confirmed or is better, then the AUD will be strengthened.
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. In January, the Bank of Canada did not change its monetary policy. In the accompanying statement, the central bank stated that the pace of further rate hikes will depend on a number of factors, including the impact of this process on consumption and the housing market, as well as on the situation in international trade policy. “Shock resilience in relation to oil prices, the situation with companies’ investments and the economic assessment given by the Bank of Canada will also play an important role in making decisions about the future course of monetary policy,” the Bank of Canada said.
Probably, at the meeting on Wednesday, the Bank of Canada will once again keep the interest rate at 1.75%. Before this meeting of the bank, the Canadian dollar is likely to 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 policy tightening 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. A report released last Friday by Statistics Canada pointed to a slowdown in the Canadian economy in the fourth quarter. Canada's GDP declined in December by -0.1% and grew in the 4th quarter by only 0.4% (the forecast was +1.2% and +2.0% in the 3rd quarter).
In their accompanying statement and report on changes in monetary policy, representatives of the Bank of Canada will explain the position of the bank and assess the current economic situation in the country. A tough tone of the accompanying statement of the Bank of Canada regarding rising inflation and prospects for further monetary tightening will cause a strengthening of the Canadian dollar. If the Bank of Canada signals to extend the period for maintaining a soft monetary policy, the Canadian currency will decline.
Thursday, March 7
10:00 EUR Eurozone GDP for the 4th quarter (final assessment)
GDP is considered an indicator of the overall state of the Eurozone economy. The growing trend in 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 4th quarter, Eurozone GDP grew by +0.2% (+1.2% in annual terms). In Q3, GDP growth was +0.2% and +1.6%, respectively. If the data turns out to be even weaker, then the euro may decline significantly in the short term. Data better than the forecast will strengthen the euro.
12:45 EUR The ECB's decision on interest rates
The ECB will publish its decision on the key rate and deposit rate. The ECB’s tough position on inflation and the level of key interest rates strengthens the euro, a soft position and lower rates weaken the euro. Forecast - the rate will remain at the same level of 0%. The ECB's deposit rate for commercial banks is also likely to remain unchanged at -0.4%.
Earlier, the central bank promised that it would not consider raising the rates for a long time after the end of the quantitative easing program (QE). A rate hike in the Eurozone is unlikely until mid-2019. Earlier, ECB head Mario Draghi said that the QE program could be extended if necessary.
According to the ECB's Mario Draghi, the European economy still needs substantial stimulation. Investors considered this statement as a tendency of the ECB to extend the QE program.
Given the current situation, the leaders of the European Central Bank can change the benchmarks regarding interest rates, lowering forecasts for the prospects for economic growth in the Eurozone.
If the QE program is extended at this meeting, the euro will decline. It is likely that the euro will also be in jeopardy if a new round of long-term target refinancing operations, or TLTRO, is announced. This is likely to push the euro down, and the EUR/USD pair to a zone below 1.1300.
Hard Brexit, the escalation of trade conflicts and the factors of political instability in the Eurozone are the main threats to the European economy.
13:30 EUR Press conference of the ECB
During the press conference, a surge of volatility is expected not only in euro trading, but also across the entire financial market. Similar previous ECB interest rate decisions and subsequent press conferences have driven the euro by 3-5% in a short time. The ECB leaders will assess the current economic situation in the Eurozone and comment on the ECB’s decision on interest rates.
A soft tone of the statements will have a negative impact on the euro. Vice versa, tough tone of the ECB’s representatives ’statements regarding the monetary policy of the central bank will strengthen the euro.
Friday, March 8
13:30 USD Average hourly wages. Non-farm payrolls. Unemployment rate
The most important indicators of the state of the labor market in the US in February. Forecast: +0.3% (against +0.1% in January) / 185,000 (against 304,000 in January) / 3.9% (against 4.0% in January).
In general, the indicators can be described as strong. If theyare better than the forecast, it will have a positive impact on the USD. However, it is often difficult to predict the market response to the publication of 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. The most cautious investors may prefer to stay out of the market during this time.
13:30 CAD Changes in employment in Canada. Unemployment rate
Statistics Canada will publish data on the country's labor market in February. Previous value: +66,800 employees (in January). If the increase in the number of people employed in February is significantly weaker than the previous value, then the Canadian dollar may respond with a decrease.
Unemployment in January was 5.8%. In the case of rising unemployment, the Canadian dollar will decline. If the data is better than the previous value, the Canadian dollar will strengthen. A decrease in unemployment is a positive factor for the CAD, a rise in unemployment is a negative factor.
Forecast: 5.7% in February. The relative decline in the index may have a positive impact onthe CAD quotes.
Price chart of EURUSD in real time mode
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