Overview of the main events of the Forex economic calendar for the next trading week from 25.02.2019 to 03.03.2019

Trading on key Forex news: we expect the publication of important macro statistics from the Eurozone, China, USA, and Canada, as well as the results of the vote of members of the British Parliament on Brexit. One should also take notice of the Fed Chairman Jerome Powell's speech

This month's last full trading week has come to the end, and by its end the dollar has decreased.

Weak macro data from the United States the week before last allowed investors to doubt the stability of the growth of the American economy.

The data published Thursday the week before showed that retail sales in the US in December decreased by 1.2% compared with the previous month. This was the biggest fall since 2009. It is obvious that the Americans began to afford to spend less on the New Year's Eve.

Last Wednesday, the minutes were published from the January Fed meeting.

There was no consensus among Fed leaders about future plans concerning the rates. Some members of the Open Market Committee alluded to caution regarding further policy tightening, pointing out the uncertainty surrounding the growth of the US economy. Another part of the Fed officials expect the economy to be strong enough that this year they can raise rates at least once.

And yet, all Fed officials agreed to halt interest rate increases until they can assess more deeply the implications of growing risks for the US economic growth, which became apparent after the December increase.

Even despite the frankly weak macro statistics from the Eurozone published last week, the euro strengthened against the dollar. The pair EUR/USD rose by about 0.5% over the week, which had a negative impact on the futures quotes for the DXY dollar index. In this index, which estimates the value of the dollar to a basket of 6 major world currencies, the share of the euro is over 50%. By the end of last Friday, DXY dollar index futures traded near the level of 96.40, 0.35% (or 35 points) lower than the opening price of trading at the beginning of last week.

Oil also continued to grow, despite the growth of reserves in the US storages, which reached 455 million barrels during the week of February 9-15, the highest level since November 17, 2017.

The oil market participants focused on positive fundamental factors, such as the continuing recovery of the US and global stock markets, expectations of a positive outcome of trade negotiations between China and the US, expectations of a further decline in OPEC production and an increase in geopolitical risks associated with the crisis in Venezuela, which has the largest developed oil reserves in the world.

WTI crude, for example, traded at $57.00 a barrel at the end of a trading day on Friday, which is about $1 more than the opening price of the last trading week.

Thus, investor optimism prevails in global stock and commodity markets. If the weakening of the dollar in the new week continues, the positive dynamics of world commodity markets and stock indices will continue.

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

Monday, February 25

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, February 26

GBP Inflation report

Head of the Bank of England and members of the Monetary Policy Committee of the Bank of England will speak in Parliament with comments on the current economic situation and the outlook for the economy. At this time, the volatility in the pound trading may 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 level of inflation. If the tone of the report is soft, then the British stock market will receive support, and the pound will decline. Vice versa, harsh rhetoric of representatives of the Bank of England in relation to suppressing inflation, implying an increase in interest rates in the UK, will lead to a strengthening of the pound.

GBP Speech by the British Prime Minister Theresa May

The situation with uncertain prospects of Brexit, as predicted by economists, has the most negative impact on the British economy. Gross domestic product grew by 1.4% in 2018 compared with the previous year, while the economy grew by +1.8%. It was the weakest growth since 2012. The economy slowed down faster at the end of the year, while GDP in the 4th quarter grew by 1.3% (year on year) against 1.6% growth in the 3rd quarter and the forecast +1.4%. In December, GDP fell by 0.4% compared with the previous month.

The slowdown was mainly caused by a 0.9% reduction in investment in 2018. This was the strongest fall since 2009, when the country's economy was experiencing a global recession that accompanied a large-scale financial crisis.

At the end of last year, Mark Carney, head of the Bank of England, warned that the UK’s exit from the EU without any trade agreements, i.e. a hard Brexit will be a "catastrophe for the British economy".

After the British Parliament repeatedly voted against the Brexit deal plan proposed by the country's Prime Minister Teresa May, the prospects for an agreement with the EU have become increasingly slim.

Probably, Teresa May will again try to convince the parliament to vote for her plan for the UK to exit the EU before March 29. Although, it is assumed that the theme of her speech will be foreign policy. And this is unlikely to greatly affect the quotes pound, if the topic of Brexit is not touched upon.

USD After 14:00 (GMT), Fed Chairman Jerome Powell will give a speech

Recently, the leaders of the Fed have increasingly often given statements about the need for a restrained approach to future plans for monetary policy. In the minutes from the January Fed meeting published last week, central bank leaders agreed to halt interest rate increases until they can assess more deeply the implications of growing risks for the US economic growth, which became apparent after the December increase.

This time, Fed Chairman Jerome Powell will speak at the Congress on the topic of economics and monetary policy. 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.

Wednesday, February 27

13:30 (GMT) USD Orders for non-defense capital goods (excluding 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 was at -0.7%. If the data for January is even weaker, the dollar may decline significantly.

13:30 CAD Consumer Price Indices in Canada

Core Consumer Price Index (Core CPI) from the Bank of Canada reflects the dynamics of the retail prices of the corresponding basket of goods and services (excluding fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, inter-city transport, and tobacco products). The target inflation rate for the Bank of Canada is in the range of 1%-3%. The growth rate of CPI is a precursor to a rate increase and a positive factor for the CAD. Consumer prices in December increased by 2.0% (in annual terms) and Core CPI rose by +1.7%. If the data for January is worse than the previous values, then this will negatively affect the CAD. Data better than the forecast and above the previous values ​​will strengthen the Canadian dollar.

After 16:00 (GMT), the British Parliament will vote on the Brexit deal.

The British Parliament will either approve or disapprove the new Brexit deal plan 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.

Thursday, February 28

13:00 EUR Harmonized Consumer Price Index (HICP) in Germany (preliminary release)

This index is published by the EU Statistics Office and is calculated on the basis of statistical method agreed upon between all EU countries. It serves as an indicator for assessing inflation and is used by the ECB Governing Council to assess the level of price stability. A positive result strengthens the EUR, a negative one weakens it.

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.

13:15 USD Speech by Fed Chairman Jerome Powell

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.

13:30 USD US y-o-y GDP for the 4th quarter (preliminary release)

GDP data is one of the key (along with labor market and inflation data) for the Fed in terms of its monetary policy. A strong result strengthens the US dollar; a weak GDP report negatively affects the US dollar. In the previous quarter, GDP growth was +3.4%. The forecast for 4Q2018 +2.4%. Despite the relative decline, this is a strong value. If the data turns out to be worse than the forecast, the dollar will respond with a decrease.

23:30 JPY Consumer price index (CPI) in the Tokyo region (ex fresh food)

This consumer price index published by the Bureau of Statistics of Japan reflects the assessment of price dynamics obtained by comparing the retail prices of the corresponding basket of goods and services. Tokyo CPI index ex fresh food, an important barometer of changes in consumer trends, was released in January with a value of +1.1% (annualized). Inflation in Japan is still low. The growth of the indices may trigger a strengthening of the yen. Forecast for February: +0.9%. During the publication of CPI indices, the volatility of trading in the yen and the Japanese stock market is expected to increase.

Friday, March 1

01:45 CNY Caixin PMI in the manufacturing sector

This indicator is a leading indicator of the state of the manufacturing sector in China. China's economy is the second largest in the world, so the publication of important macroeconomic indicators from China can have a strong impact on the entire financial market. Forecast: 48.7 in February (vs. 48.3 in January). A value below 50 indicates a slowdown, and a relative decline below this value may have a more negative effect on the yuan's quotes.

10:00 EUR Consumer price index. Core consumer price index (preliminary release)

Consumer price index (CPI) is published by Eurostat and determines the price change of the selected basket of goods and services for the period. It is a key indicator for assessing inflation and changing consumer preferences. A positive result strengthens the EUR, a negative one weakens it. In January, the CPI index rose by +1.4% (in annual terms). If the data for February turns out to be worse than the values ​​for January, this may negatively affect the euro.

Core Consumer Price Index (Core CPI) determines the price change of a selected basket of goods and services for a given period and is a key indicator for assessing inflation and changing consumer preferences. Food and energy are excluded from this indicator for a more accurate assessment. A high result strengthens the EUR, and a low one weakens it. In January, the base CPI rose by +1.1% (annualized). If the data for February turns out to be worse than the values ​​for January, then this may adversely affect the euro.

If the data turns out to be better, then the euro will most likely respond with a growth in quotations.

13:30 CAD Canada's GDP. Canada's GDP (Annualized Data)

Canada's GDP Report is published by Statistics Canada. A strong report will strengthen the CAD. A weak GDP report will have a negative impact on the CAD. The previous report indicated Canada’s GDP decline in December by -0.1%.

Canada's quarterly GDP report reflects the total volume of all goods and services produced by Canada for the quarter (in annual terms) and is considered an indicator of the overall state of the Canadian economy. In the previous (third) quarter, GDP grew by 2%. If the data for the 4 quarter is stronger, the CAD will strengthen.

15:00 USD PMI (by ISM) in the manufacturing sector of the US economy

PMI index 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, anything below 50 is negative for the US dollar. Forecast: 56.2 in February (against 56.6 in January), which is likely to have a positive impact on the US dollar, despite the relative decline.

Price chart of GBPUSD in real time mode

Economic calendar for the week 25.02 – 03.03.2019

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.

Need to ask the author a question? Please, use the Comments section below. .
Start Trading
Follow us in social networks!
Live Chat
Leave feedback