Overview of the main events of the Forex economic calendar for the next trading week from 11.03.2019 to 17.03.2019
Trading on key Forex news: we expect the publication of important macro statistics from the Eurozone, the United States, as well as the results of the meeting of the central bank of Japan, the results of voting in the British parliament on the Brexit plan. Investors should also pay attention to the speeches of the heads of the Bank of Japan and the Fed.
As a result of the extremely volatile last trading week, whic was full of economic events, the US dollar rose, and the DXY dollar index, which measures the dollar against a basket of 6 major world currencies, updated the annual high near 97.66 on Thursday.
However, last Friday the dollar fell down. Its decline was accelerated by the conflicting data from the US labor market published last Friday. According to the Ministry of Labor, in February, unemployment in the United States fell to 3.8% against 4.0% in January, the average hourly earnings in the private sector rose by 11 cents and amounted to $27.66. The weak part of the report was the NFP indicator. The number of non-farm jobs in the US increased by 20,000 in February. Economists had expected that the number of jobs in February would increase by 180,000, and unemployment would be at 3.9%.
After the published report on the labor market, investors' concerns that the global economic slowdown could have spread to the United States increased, and the likelihood of easing of the Fed’s monetary policy increased.
The yield on 10-year US government bonds also fell to 2.630% against 2.677% on Thursday and against 2.768% at the beginning of last week, which made the US currency less attractive to investors.
The ECB also surprised investors. Last Thursday, the ECB held its regular meeting, at which the ECB leaders kept the current monetary policy unchanged, but announced a new program of targeted long-term refinancing. In addition, the Central Bank lowered the forecast for GDP growth in the Eurozone in 2019 to 1.1% from 1.7% and lowered inflation estimates.
The euro fell sharply last week, and the EUR/USD pair fell 1% (or 114 points) to 1.1191. On Thursday, the multi-month low was recorded at 1.1177. The last time the EUR/USD pair traded near this mark was in June 2017.
The ECB’s decision came as a surprise to investors who were expecting an early start in the interest rate hike cycle.
This decision showed that the leaders of the Central Bank are increasingly worried about the slowdown of the Eurozone economy. Hopes for a quick resolution of the trade conflict between the US and China have weakened considerably: according to reports in The Wall Street Journal, the ground for signing the agreement has not been prepared. Concerns about the global economy and lingering doubts about the US-China trade agreement put pressure on investor sentiment. Chinese indices recorded the strongest fall since October, after weak export and import data reinforced concerns about the state of the global economy. As reported by the General Administration of Customs of China on Friday, in February, compared with the same period last year, exports decreased by 20.7%, much stronger than economists expectated, while imports decreased by 5.2%, also more than forecasts.
As a result, global stock indices ended the past week with a noticeable decrease. In particular, the weekly fall of the major US stock indexes negated the growth of the previous 2 weeks.
In the new week, investors will focus on the publication of US inflation indicators, the Bank of Japan meeting on monetary policy, as well as the vote in the British parliament on Brexit.
Investors should also note that on March 10 the US will switch to dylight saving time (in Europe this will happen on March 31, 2019).
As always, a number of important macroeconomic data and several important news are expected to be published on the new trading week.
Monday, March 11
12:30 (GMT) USD Retail sales (ex autos). Retail control group
This report (Core Retail Sales Ex Autos) reflects the total sales of retailers of all sizes and types, with the exception of car dealerships. The change in sales in the retail sector is the main indicator of consumer spending. The report is leading, and in the future the data can be greatly revised. High results strengthen the US dollar, low results weaken it. January forecast: +0.3% (against -1.8% in December). The growth rate may have a short-term positive impact on the dollar.
Retail sales is the main indicator of consumer spending in the United States, showing the change in sales in the retail sector. The Retail Control Group indicator measures volume across the entire retail industry and is used to calculate price indices for most products. A high result strengthens the US dollar, and vice versa, a weak report weakens the dollar. Forecast: US retail sales rose by 0.6% in January (against a decline of -1.7% in December).
In general, the indicators can be described as positive. However, their slight growth after a stronger fall in December will not be able to give a significant acceleration to the growth of the dollar. Data worse than the forecast will adversely affect the dollar in the short term.
Tuesday, March 12
Meeting of the Council of Ministers of Finance and Economy of the Member States of the European Union
00:00 USD Speech by Fed Chairman Jerome Powell
Recently, the leaders of the Fed have increasingly often given statements about the need for a restrained approach to future plans for monetary policy. The central bank executives agreed to halt interest rate increases until they more deeply appreciate the implications of rising risks for US growth.
Powell's comments can affect both short-term and long-term USD trading. 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.
12:30 USD Core Consumer Price Index (excluding food and energy)
Core Consumer Price Index (Core CPI) determines the price change of the 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 are excluded from this indicator for a more accurate assessment. A high result strengthens the US dollar, and a low one weakens it. In the previous month (in January), the value of the indicator was +0.2% (+2.2% in annual terms). Forecast for February: +0.2% and +2.1% (annualized). The decline is a negative factor for the dollar. If the data for February is even weaker, then the dollar is likely to respond with a decrease. The growth rate is a positive factor for the USD.
After 18:00 the British parliament will vote on the Brexit deal
The British Parliament will either approve or decline the Brexit deal with the EU presented by Teresa May. If Parliament does not accept this plan, the likelihood of a hard Brexit will increase dramatically. This will most negatively affect the quotes pound.
Wednesday, March 13
12:30 USD Orders for capital goods (excluding defense and aviation)
The indicator reflects the value of orders received by producers of capital goods (capital goods are durable goods used to produce durable goods and services), which implies large investments. Goods produced in the defense and aviation sectors of the US economy are not included in this indicator. The high result strengthens the USD. In December, the indicator came out with a value of -1.0%. The forecast for January is +0.1%. If the data for January is even weaker, the dollar may decline significantly.
The Minister of Finance of Great Britain submits a budget report with information on the country's economic development, growth of its GDP, budget expenditures/incomes, and measures of monetary stimulation of the economy, and also gives an economic forecast for the year ahead. This document has a strong influence on the dynamics of the British stock market and the pound.
Thursday, March 14
07:00 EUR Harmonized Consumer Price Index (HICP) in Germany
In January, the HICP index (in annual terms) grew by +1.7%. Forecast: +1.7% in February. Probably, this value and its publication will have a short-term impact on the euro.
If the data for February turns out to be better than the previous value, the euro will strengthen in the short term.
Friday, March 15
02:00 JPY The decision of the Bank of Japan on the interest rate. Press conference of the Bank of Japan and commentary on monetary policy. Speech by the head of the Bank of Japan Haruhiko Kuroda
During the press conference, the head of the Bank of Japan Hurohiko Kuroda will comment on the monetary policy of the bank. The Bank of Japan continues to adhere to its ultra-soft monetary policy. As Kuroda has repeatedly stated earlier, "it is appropriate for Japan to patiently continue the current soft monetary policy." Markets usually react actively to Kuroda's speeches. If he touches on the topic of monetary policy during his speech, volatility will increase not only in trading on the yen, but throughout the Asian and global financial markets.
Meanwhile, being the funding currency of the Japanese stock market and a safe haven currency, the yen strengthened since the beginning of this month amid falling stock markets and risks associated with a slowdown in the global economy.
At the moment, the rising dynamics of the USD/JPY pair prevails. However, its growth may stop if the Fed issues more specific signals on a soft monetary policy, and a trade agreement between China and the United States is not concluded.
14:00 USD University of Michigan Consumer Confidence Index (Preliminary)
The previous (February) indicator value was 93.8. The growth rate will strengthen the USD, and a decrease in value will weaken the dollar. March forecast (preliminary value): 93.0. A relative decline in the index may have a short-term negative impact on the dollar.
Price chart of EURUSD in real time mode
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