Overview of the main events of the Forex economic calendar for the next trading week from 05.11.2018 to 11.11.2018
Trading on key Forex news: we expect the publication of the decisions of the central banks of Australia, New Zealand, and USA on interest rates, and data on the UK's GDP for the third quarter
The past week was no less volatile than the previous ones. Despite the correction in the last days of the past month, global stock markets remained under pressure from investors' concerns about geopolitical contradictions and a slowdown in global economic growth.
Last week’s meetings of the central banks of Japan and the United Kingdom showed no surprises. The current monetary policy of the banks remained unchanged. The Bank of England also said that the UK's economic outlook is overshadowed by uncertainty about Brexit, while the global economy is giving alarming signals. At the same time, positive macro statistics from the United States continue to come in, indicating a stable state of the labor market and accelerating economic growth.
As reported last Friday by the US Department of Labor, the number of new jobs created outside the agricultural sector of the US economy grew by 250,000 new jobs, the growth of average hourly wages was + 0.2%, while unemployment remained at the same level of 3.7%.
Earlier last week, the US Labor Department reported that the labor costs index, an indicator of wages and benefits for US civil service workers, rose by 0.8% in the 3rd quarter. This is higher than the growth of 0.6%, which was observed in the 2nd quarter.
The report of the Institute for Supply Management (ISM) published last Thursday noted that in October, the US economy continued to grow for the 114th consecutive month. The US manufacturing sector, according to ISM, shows the highest results in the world due to fiscal stimulus measures.
Strong macro data can strengthen the Fed’s determination to raise interest rates.
At the same time, growth in the activity in the manufacturing sector of Western Europe is slowing down, while China’s figures suggest an almost complete absence of growth in the manufacturing sector. The euro also remained under pressure last week due to the opposition of the European Commission and the Italian government on the country's budget, as well as the background of political uncertainty in Germany. German Chancellor Angela Merkel announced that she would leave the position of chairman of the Christian Democratic Union in December and will not run for chancellor in 2021.
According to Sentix report presented last week, more than 15% of surveyed private investors expect Italy to withdraw from the Eurozone in the next 12 months. The index of probability of the collapse of the Eurozone rose to a maximum since April 2017 amid the controversy over the draft budget of Italy.
The focus of traders on the new week will be the meetings of the Republic of Belarus of Australia, the Republic of Belarus of New Zealand, the Fed and the UK GDP data.
As always, a number of important macroeconomic data and several important news are expected to be published on the new trading week.
Sunday, November 4
23:50 (GMT) JPY Meeting of the Bank of Japan Monetary Policy Committee.
The committee will analyze the economic situation in Japan and will provide insight on possible future prospects for the Bank of Japan financial policy. If the tone of the protocol indicates the strength of the Bank of Japan’s intentions regarding monetary policy in the country, this will negatively affect the Japanese stock market and strengthen the yen. Vice versa, soft rhetoric regarding the prospects for the bank’s monetary policy will contribute to the weakening of the yen and the growth of the Japanese stock market.
Monday, November 5
There are no important macro data planned to be published.
Tuesday, November 6
03:30 AUD Interest rate decision. The 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 the 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 after 2018, given the weak wage growth and slowdown in the Australian economy. "The Board does not see any good arguments 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 resumption of trade tensions between the United States and China will be a major risk factor for the Australian economy and the Australian dollar next year.
21:45 NZD Change in the employment rate. Unemployment rate (data for 3 quarter)
Also at the same time, the Bureau of Statistics of New Zealand publishes a report on unemployment - an indicator that measures the ratio of the unemployed population to the total number of able-bodied citizens. The growth rate indicates a weak labor market, which leads to a weakening of the national economy. The decline is a positive factor for the NZD. Forecast: Unemployment in New Zealand decreased in Q3 by 0.1% to 4.4%.
In general, the indicators can be described as positive. Probably, the NZD will strengthen when the forecast is confirmed.
Wednesday, November 7
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, oil reserves in the country last week rose by 3.22 million barrels versus +6.35 million barrels two weeks earlier. Total oil reserves in the United States now amount to almost 426 million barrels, which is the highest mark since the end of June. The growth of oil reserves has a negative impact on oil prices, which sharply declined in October.
The fall in oil prices also contributed to the strengthening of the dollar and falling stock markets, which caused investors to fear the slowdown in the global economy.
The publication of data is usually accompanied by a surge in volatility in oil prices, which are denominated in US dollars.
20:00 NZD The RB of New Zealand decision on the interest rate. Accompanying statement of the RBNZ.
The current interest rate in New Zealand is at 1.75%, remaining one of the highest in the world among advanced economies. And it attracts investors in nearly safe purchases of the New Zealand currency, which generate income, as well as traders using the carry-trade strategy, when the more expensive currency is bought at the expense of cheaper ones. It is widely expected that at this meeting, the interest rate will remain at the same level of 1.75%.
However, the RBNZ may leave open the possibility of lowering the key interest rate. The probability of a rate reduction is estimated by investors at about 50%. According to economists, the New Zealand economy will find it difficult to accelerate growth and maintain stronger inflation in the medium term without taking some steps to mitigate the bank’s current monetary policy.
In the accompanying statement and comments, the RBNZ will provide an explanation of the decision on the interest rate and comments on the economic conditions that contributed to the adoption of this decision.
At this time, volatility in the New Zealand dollar trading grows.
Thursday, November 8
19:00 USD The decision of the Fed on the interest rate. The Fed's comment on monetary policy
It is widely expected that the rate will remain at the same level of 2.25%. The probability of a rate hike in December is estimated by investors at about 90%.
After the decision on the interest rate, the Fed publishes a comment on monetary policy (FOMC Statement). The report increases the volatility in the USD. A tough tone of comments regarding future plans of the Fed strengthens the US dollar, and a soft tone weakens it.
Investors will study the comments on the decision on interest rates in order to understand the Fed’s intentions regarding the possibility of another rate increase this year.
During the publication of the decision on the rate and comments of the Fed, a surge in volatility is expected across the entire financial market, primarily in the US stock market and in dollar quotes.
Friday, November 9
00:30 AUD TheRBA's comment on monetary policy
Tough rhetoric about future monetary policy plans is bullish for the AUD. But the RBA may revise its short-term projections of core inflation downward. For the Reserve Bank of Australia, this means that the interest rate will have to remain unchanged for a longer time. On the markets it is now expected that the next rate increase will occur no earlier than 2019. 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. This is a negative factor for the AUD.
09:30 GBPGDP for the 3rd quarter (preliminary release)
Simultaneously with the quarterly report, the monthly report on GDP will be released (for September). In August, GDP growth was 0%.
Price chart of EURUSD in real time mode
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