Last week the RBA and the Bank of England cut interest rates by 25 basis points to the levels of 1.5% and 0.25%, respectively. Both Central Banks showed inclination to more monetary policy easing. It is worth noting that interest rate in the UK was declined to the lowest level in more than 300 years. Last Friday, important US macro-economic data was released, which may affect the USD for the whole month.
Positive U.S. labor market data for July increases chances of the interest rate hike in September. However, according to market participants, in cease of the poor data on the US GDP, positive NFP report will insufficient to influence on the US Fed decision to raise rates in September, especially in advance of the first debate between presidential candidates Hillary Clinton and Donald Trump, which is scheduled for September 26. However, the increase in interest rate by 0.25% may take place in December. Market estimates probability of the monetary policy tightening in September at 15% against 9% prior to the publication of NFPR).
The difference in the monetary policy in the USA and other countries with the largest economies remained is increasing, which will increase demand for the USD in the market until the end of the year.
Marco-economic statistics and news of this week will include:
02:01 (GMT+3) – Retail sales report from the British retail consortium (BRC) for July.
04:30 – consumer price indices (CPI) and producers ' price indices (PPI) of China for July. These are the key inflation indicators in China. In case of the positive data the Bank of China may tighten monetary policy. Chinese economy is the second largest economy in the world after the American. Concerns about slowdown in the Chinese economy put pressure on the financial markets. Economic growth of China has slowed down to 6.5% – 7% per year compared with a fantastic annual growth of 10% just a few years ago. However, Chinese economy is still one of the highest in the world. Given strong influence of the Chinese economy on global economy, volatility in the financial markets may increase in the period the publication of the Chinese data. from China.
08:45 – Unemployment rate in Switzerland for July (3.3% in June).
09:00 – German trade balance for June. This index has a significant impact on Euro.
11:30 – British macro-economic data for June, a month before referendum on Brexit. It is expected that volatility in pairs with the pound and in the index FTSE100 of the London stock exchange will increase.
17:00 – evaluation from the British National Institute of Economic and Social Research (NIESR) of the GDP growth pace of the country in the past three months. This report is published before the release of the official GDP data and can to affect monetary policy in the UK.
23:30 – American petroleum Institute (API) will issue report on change into the US oil reserves for last week.
03:30 – Westpac consumer confidence index of Australia for August.
06:05 – speech by the RBA Governor Glenn Stevens at the press conference. He will assess current state of the Australian economy and indicate prospects of the monetary policy. It is expected that volatility in pairs with the Australian dollar and in the Australian stock market. May increase during Mr. Stevens presentation.
17:30 - US Department of Energy will release weekly report on oil and oil products reserves in the US stores.
21:00 – monthly report on the US budget with economic overview by the Fed for July (Beige Book), which evaluates overall state of the U.S. economy. In case of the rise in the budget surplus, the USD will strengthen and Visa Verse.
00:00 – interest rate decision by the RBNZ. It is expected that the rate will be lowered by 25 basis points, to the level of 2.00%. At the press conference, the head of the Bank, Graeme Wheeler will assess prospects for economic growth in the New Zealand and future monetary policy of the Central Bank. Continuing low inflation and the rise in the New Zealand currency and increasing pressure on dairy and manufacturing industry are the negative factors affecting country’s economy. Graeme Wheeler may indicate possibility of further rate cuts in the country, which will put pressure on the NZD.
04:00 – Preliminary consumer price index of Australia for August. Positive data will be favorable for the AUD, as it will reduce probability of the interest rate decrease in Australia and Vice versa.
15:30 – Initial applications for unemployment benefits in the USA for last week. Price Indices of export/import in the USA for July.
01:30 – Business activity index in the manufacturing sector (PMI) of New Zealand for July.
01:45 – Retail sales in New Zealand for Q2. This data is an indicator of consumer spending in the country.
05:00 – retail sales of China on annual basis for July.
08:30 – Chinese data on industrial production for July (on annual basis). The rise in production can trigger acceleration of inflation, and cause the rise in the Yuan and Vice versa.
09:00 – consumer price index of Germany for July and German GDP for Q2. German GDP is 4% of global GDP and 30% of European GDP. Therefore German GDP may affect monetary policy of the ECB. Positive German GDP will have a positive effect on the Euro and European stock market, especially on the index DAX30 of Frankfurt Stock Exchange and Vice versa.
12:00 – European GDP for Q2 and industrial production in the Eurozone in July. In the period of publication volatility in the pairs with the Euro and in the European stock indices will increase.
15:30 – US retail sales data for July. This index is the main indicator of consumer spending, showing changes in the volume of sales in the retail sector.
20:00 – report of the oilfield services company Baker Hughes on the number of operating drilling rigs in the USA. It is an important indicator of activity in the oil sector of the USA having a significant impact on oil prices.