Last week market volatility was high due to poor US statistics, which showed that business activity index ISM in the US non-manufacturing sector in August was 51.4 points against 55.5 points in July and the forecast of 55.0), which was the lowest value over the past six years and the worst forecast). This fact significantly reduces the likelihood of the rate hike in the USA in the coming months.
The USD fell sharply in the market. However, by the end of last week the USD was able to regain the losses. It is also worth noting that inaction of the ECB unchanged monetary policy in Eurozone have their negative affect.. ECB President Mario Draghi did not suggest introduction of any incentive measures for the first time over two years for the first time. There were no indications that such measures have been prepared by the Bank. Statements by the head of Boston FRB Eric Rosengren, who suggested toraise interest rate in the country, also caused the closure of the short positions on the USD.
Marco-economic statistics and news of this week will include:
15:05 (GMT+3) – Speech by Dennis Lockhart, representative of the US Fed.
20:00 – Speech by Lal of Brainard, representative of the FOMC.
01:30 – Speech, Kent representative of the RBA.
08:30 – Chinese data, including retail sales and industrial production in August (on the annual basis).
09:00 – important German inflation index for August, including wholesale price index and consumer price index. No minor changes are expected.
11:30 – UK inflation indices for August (producer price index and consumer price index). Consumer price index is the key indicator of the inflation rate, which affects movement in the Pound and in the index of the London stock exchange FTSE100. It is expected that consumer price index will increase (+0.4% and +0.7% on annual basis after declining by -0.1% in July), which will positively affect the Pound.
12:00 – ZEW business sentiment index and the index of current economic conditions in Germany in August.
12:00 – ZEW index of business expectations in Eurozone for September (forecast if 6.7 against 4.6 in August), and employment rate in Q2. Speech by the ECB President, Mario Draghi. Last week, Mario Draghi did not say anything about the plans for the monetary policy in Eurozone.
23:30 – American petroleum Institute (API) will publish report on changes in the US stocks of oil for the past week.
03:30 – Westpac consumer price index кой уверенности Westpac of the University of Melbourne for September.
07:30 – Japanese industrial production for July. The index showed the rise of 0% in June and the decline by 3.8% on annual basis. The rise in the industrial production and in the economy and in the economy as a whole is prevented by the strong Yen. Inaction of the Bank of Japan has worsening the situation. Meeting of the Bank of Japan will be held next week (September 20-21).
11:30 – UK labour market data, including applications for unemployment benefits and unemployment rate in August (the forecast is 4.9%); average wages in the past 3 months (it is expected that the wages will increase by 2.1%, which will have a positive impact on the Pound.
12:00 – Industrial production output in Eurozone for July, in the first month after the Brexit. According to the forecast the index will decrease by 0.8% on monthly basis and 0.5% on annual basis.
12:00 – ZEW economic expectations index in Switzerland for September.
12:50 – Speech of the RBA Deputy, Debelle.
15:30 – US indices of import/export prices in August. It is expected that the indicators will be near zero which will have a negative impact on the USD.
17:30 – US Department of Energy will isseu a weekly report on oil and oil products stocks.
01:45 – Business activity index in the manufacturing sector (PMI) in New Zealand, which is an important indicator of the overall economic conditions. GDP of New Zealand for Q2. (previous value was +0.7%). Publication of data will increase volatility in the NZD. It is likely that GDP in Q2 will be positive, due to the rising prices for agricultural products (especially for dairy products, which is an essential part of the New Zealand’s exports), which will have a favorable impact on the NZD.
04:00 – Consumer price inflation in Australia in September. Positive data will increase bullish trend in the AUD. Positive data may affect monetary policy decisions by RBA. The previous value was 3.5%.
04:30 – Australian labour market data for August. Publication of these data will increase volatility in the pairs with the AUD.
10:30 – interest rates decision by the SNB. Currently, deposit rate is at the level of -0.75% and changes are not expected. Press conference of the SNB will start at the same time, which may increase volatility in the Swiss franc.
11:30 – British retail sales data for August, which is important inflation indicator.
12:00 – Eurozone data on trade balance for July and consumer price index for August. The latter may have significant impact on the monetary policy of the ECB. It is expected that consumer price index will be +0.2% on annual basis, which will be a favourable factor for the Euro. Recent macro-economic data from Eurozone and Germany indicated possibility of deflation in Eurozone. If consumer price index will be below the forecast, Euro will go down in the currency market.
14:00 – Interest rate decision by the Bank of England. It is likely that the rate will remain at the current level of 0.25%. The following British data will be also released at the same time: monetary policy report with the results of the voting on rate and other issues; comments on the state of economy; minutes of the meeting of the monetary policy Committee (MPC), indicating the results of the interest rates voting. Main risks, which the UK faces after Brexit are possibility of the economic growth slowdown and deficit of the balance of payments. On the other hand, there are some improvements in the economic situation of the country. Therefore, it is difficult to predict future actions by the Bank of England. There are good chances in trading the Pound and the FTSE100 index during the period of publication of the Bank’s decisions and press conference.
15:30 – important US macro-economic statistics for August, including: retail sales, producer price index, Fed Philadelphia business activity index in the manufacturing sector and weekly data on the number of applications for unemployment benefits.
16:15 – US industrial production and capacity utilization for August.
12:00 – Eurostat quarterly data on changes to the labour costs in Eurozone in Q2.
15:30 – US consumer price index for August, which is an important inflation indicator. It is expected that the index will rise by 1.0% against +0.8% in July, which will be a favourable factor for the USD.
17:00 – Reuters/Michigan preliminary consumer confidence index in September. Since 2011 the index has been in the uptrend. According to the forecast it will be 91.0 (in September against 89.8 in August, which will support the USD.