Market participants are actively digesting the outcomes of last Thursday’s US Fed meeting, which followed the presidential election held the week prior.
In the upcoming week, traders will focus on the US inflation data. Besides, market participants will monitor the publication of important macro statistics on China, the US, New Zealand, Australia, the eurozone, Germany, the UK, and Japan.
Note: During the coming week, new events may be added to the calendar, and / or some scheduled events may be canceled. GMT time
The article covers the following subjects:
Key facts
- Monday: the Reserve Bank of New Zealand’s inflation expectations.
- Tuesday: UK labour market data.
- Wednesday: US CPIs.
- Thursday: US PPIs.
- Friday: China and US retail sales.
- Key event of the week: US CPIs.
Monday, November 11
The US and Canada celebrate their national holidays, such as Veterans Day and Remembrance Day. Banks and stock exchanges will be closed in these countries, affecting trader’s activity and trading volumes during the US trading session.
02:00 – NZD: Inflation Expectations of the Reserve Bank of New Zealand for Q4
The indicator measures consumers’ expectations regarding annual inflation over the next 24 months. An increase in these expectations can significantly influence the likelihood of an interest rate hike. A high indicator value is a positive factor for the New Zealand dollar.
Previous values QoQ: +2.03%, +2.33% +2.50% (in Q1 2024), +2.76%, +2.83%, +2.79%, +3.3%, +3.62% (in Q4 2022).
Tuesday, November 12
07:00 – EUR: German Harmonized Index of Consumer Prices (Final Estimate)
The Harmonized Index of Consumer Prices (HICP) is published by the European Statistics and is calculated using a methodology agreed upon by all EU countries. The HICP is an indicator for measuring inflation and is used by the European Central Bank to assess price stability. A positive index result strengthens the euro, while a negative one weakens it.
Previous values YoY: +1.8, +2.0, +2.6%, +2.5%, +2.8%, +2.4%, +2.3%, +2.7%, +3.1% in January 2024, +3.8% in December, +2.3% in November, +3.0% in October, +4.3% in September, +6.4% in August, +6.5% in July, +6.8% in June, +6.3% in May, +7.6% in April, +7.8% in March, +9.3% in February, +9,2% in January, +9.6% in December, +11.3% in November, +11.6% in October, +10.9% in September, +8.8% in August, +8.5% in July, +8.2% in June, +8.7% in May, +7.8% in April, +7.6% in March, +5.5% in February, +5.1% in January 2022.
The data suggests that German inflation continues to decelerate, albeit at a slower pace than expected. This situation is putting pressure on the European Central Bank to ease its monetary policy. Figures lower than the previous reading will likely affect the euro negatively. Conversely, the resumption of inflation growth may provoke the appreciation of the euro. The growth of the indicator values is a positive factor for the currency.
If the October data turns out to be better than previous values, the euro may strengthen in the short term.
The preliminary estimate stood at +2.4%.
07:00 – GBP: Average Weekly Earnings Over the Last Three Months. Unemployment Rate
The UK Office for National Statistics monthly publishes a report on average weekly earnings covering the period for the last three months, including and excluding bonuses.
This report is a key short-term indicator of employee average earnings changes in the UK. An increase in wages is positive for the British pound, whereas a low indicator value is unfavorable. Forecast: The November report suggests that average earnings, including bonuses, rose again in the last three months, including July, August, and September after gaining +3.8%, +4.0%, 4.5%, +5.7%, +5.9%, +5.7%, +5.6%, +5.6%, +5.8%, +6.5%, +7.2%, +7.9%, +8.1%, +8.5%, +8.2%, +6.9%, +6.5%, +5.8%, +5.9%, +6.0%, +6.5%, +6.%, +6.1%, +5.5%, +5.2%, +6.4%, +6.8%, +7.0%, +5.6%, +5.7%, +4.8%, +4.3%, +4.2% in previous periods. The earnings value excluding bonuses also increased with percentages at +4.9, +5.1%, +5.4%, +6.0%, +6.0%, +6.0%, +6.1%, +6.2%, +6.6%, +7.3%, +7.7%, +7.8%, +7.8%, +7.8%, +7.8%, +7.3%, +7.2%, +6.7%, +6.6%, +6.6%, +6.7%, +6.5%, +6.1%, +5.8%, +5.5%, +5.2%, +4.7%, +4.4%, +4.2%, +4.2%, +4.1%, +3.8%, +3.7%, +3.8% in previous periods. These figures show continued growth in employee earnings levels, which is positive for the British pound. If the data outperforms the forecast and/or previous values, the pound will likely strengthen in the currency exchange market. Conversely, if the data falls short of the forecast/previous values, the pound will be negatively affected.
The UK unemployment data will be released at the same time. Unemployment is expected to stand at 4.0% for the three months of July, August, and September (against 4.0%, 4.1%, 4.2%, 4.4%, 4.4%, 4.3%, 4.2%, 4.0%, 3.8%, 3.9%, 4.0%, 4.1%, 4.2%, 4.3%, 4.2%, 4.0%, 3.9% in previous periods).
Since 2012, the UK unemployment rate has fallen steadily from 8.0% in September 2012. The unemployment decline is a positive factor for the pound, while its growth negatively impacts the currency.
If the UK labor market data appears to be worse than the forecast and/or the previous value, the pound will be under pressure.
Regardless, when the UK labour market data is released, the pound and the London Stock Exchange are expected to experience increased volatility.
Wednesday, November 13
GBP: Inflation Report Hearing (Exact Time Not Specified, Expected After 08:30)
The Bank of England Governor and members of its Monetary Policy Committee will speak to Parliament about the current state of the economy and its future outlook. During this address, volatility in the British pound may rise sharply. One of the main benchmarks for the Bank of England regarding the UK monetary policy outlook, apart from GDP, is the inflation rate. If the tone of the report is soft, the UK stock market will be supported, and the pound will decline. Conversely, the hawkish tone of the Bank of England officials regarding curbing inflation, implying an interest rate hike, will lead to the strengthening of the pound.
13:30 – USD: Consumer Price Indexes
The Consumer Price Index (CPI) measures the change in prices of a selected basket of goods and services over a given period and is a key indicator for assessing inflation and changes in consumer preferences. Food and energy are excluded from the Core CPI to provide a more accurate assessment.
A high index reading strengthens the US dollar because the probability of a Fed interest rate hike increases, while a low reading weakens the currency.
Previous values YoY:
- CPI: +2.4%, +2,5%, +2.9%, +3.0%, +3.3%, +3.4%, +3.5%, +3.2%, +3.1%, +3.4%, +3.1% +3.2%, +3.7%, +3.7%, +3.2%, +3.0%, +4.0%, +4.9%, +5.0%, +6.0%, +6.4% in January 2023;
- Core CPI: +3.3%, +3.2%, +3.2%, +3.3%, +3.4%, +3.6%, +3.8%, +3.8%, +3.9%, +3.9%, +4.0%, +4.0%, +4.1%, +4.3%, +4.7%, +4.8%, +5.3%, +5.5%, +5.6%, +5.5%, +5.6% in January 2023.
The data indicates a continued slowdown in consumer inflation, albeit at a slower pace than anticipated by the Fed. It remains markedly below the 2022 reading when US annual inflation hit a 40-year high of 9.1% in June. On the other hand, US inflation is still significantly above the Fed’s 2% target, which will force US central bank policymakers to keep the interest rate elevated.
If the figures are confirmed or prove to be lower than expected, the US dollar will likely decline in value in the short term. Readings higher than estimated will strengthen the currency, as it will increase the probability of the Fed keeping the interest rate at high levels for longer.
23:00 – AUD: Reserve Bank of Australia Governor Michelle Bullock’s Speech
Michele Bullock will assess the current state of Australia’s economy and outline her department’s monetary policy. Market participants anticipate her insights on the central bank’s policies amid global recessionary trends and elevated inflation levels in Australia.
Any signals regarding her plans to adjust the RBA’s monetary policy parameters will cause a sharp surge in the Australian currency and stock market volatility. If the Australian Central Bank Governor avoids discussing monetary policy, the market response will be muted.
Thursday, November 14
00:30 – AUD: Employment Rate. Unemployment Rate
The employment rate reflects the monthly change in the number of employed Australian citizens. The indicator value increase positively impacts consumer spending, stimulating economic growth. A high reading is positive for the Australian dollar, while a low reading is negative. Previous indicator values: +64,100 in September, +42,600 in August, +48,900 in July, +52,300 in June, +39,500 in May, +37,400 in April, -6,100 in March, +120,400 in February, +11,900 in January 2024, -58,900 in December 2023, +55,500 in October, +13,400 in September, +62,300 in August, 0 in July, +19,800 in June, +83,800 in May, -14,700 in April, +93,800 in March, +45,100 in February, 23,100 in January 2023.
Besides, the Australian Bureau of Statistics will publish a report on the unemployment rate. It is an indicator that estimates the ratio of the share of the unemployed population to the total number of working-age citizens. The rise in the indicator readings demonstrates the weakening of the labor market, negatively impacting the national economy. A decrease in the indicator is positive for the Australian dollar.
Forecast: Australian unemployment has remained at its lowest levels and stood at 4.1% in October (against 4.1% in September and August, 4.2% in July, 4.1% in June, 4.0% in May, 3.8% in April, 3.7% in March and February, 4.1% in January, 3.9% in December and November, 3.8% in October, 3.6% in September, 3.7% in August and July, 3.5% in June, 3.6% in May, 3.7% in April, 3.5% in March and February, 3.7% in January, 3.5% in December, 3.4% in November and October, 3.5% in September and August, 3.4% in July, 3.5% in June, 3.9% in May and April, 4.0% in March and February, 4.2% in January), while the employment rate has increased.
The Reserve Bank of Australia has repeatedly stated that the Australian economy and the central bank’s plans are influenced by key indicators like the level of household debt and spending, wage growth, and the state of the labor market, in addition to the international trade situation. If the indicator readings are lower than expected, the Australian dollar may decline significantly in the short term, while higher data will strengthen the currency in the short term.
10:00 – EUR: Eurozone GDP for Q3 (Second Estimate)
GDP is considered to be an indicator of the overall economic health. A rising trend of the GDP indicator is positive for the euro, while a low reading weakens the currency.
Recent Eurozone macro data has shown a gradual recovery in the growth rate of the European economy after a sharp decline in early 2020.
Previous values: +0.2 (+0.6 YoY), +0.3% (+0.4% YoY) in Q1 2024, 0% (+0.1% YoY) in Q4 2023, -0.1% (0% YoY) in Q3, +0.1% (+0.5% YoY) in Q2, -0.1% (+1.0% YoY) in Q1 2023, 0% (+1.9% YoY) in Q4 2022, +0.7% (+4,0% YoY) in Q3, +0.8% (+4.1% YoY) in Q4 2022, +0.7% (+4,6% YoY) in Q3, +2.2% (+3.9% YoY) in Q3, +2.2% (+14.3% YoY) in Q2, and -0.3% (-1.3% YoY) in Q1 2021.
If the data is below the forecasted and/or previous values, the euro may decline. Conversely, readings exceeding the predicted values may strengthen the euro in the short term. However, the European economy is still far from fully recovering even to pre-crisis levels.
The preliminary estimate stood at +0.4% (+0.9% YoY).
12:30 – EUR: European Central Bank Monetary Policy Accounts
This document contains an overview of the current ECB policy with anticipated changes in the financial and monetary sectors. The publication of this data may cause a surge of volatility in the euro and the European stock market.
Investors will scrutinize the text of the ECB’s October meeting Accounts to capture additional signals regarding the monetary policy prospects.
Recent macroeconomic data from the eurozone has shown signs of weakness, pointing to a slowdown in the European economy. This deceleration forces the ECB to adopt a softer approach to interest rates amid slowing inflation.
Volatility in the euro may rise sharply if the accounts reveal unexpected statements or new insights regarding the monetary policy outlook.
13:30 – USD: Producer Price Index (PPI)
he Producer Price Index (PPI) measures the average change in wholesale prices determined by manufacturers at all stages of production. The index is one of the leading inflation indicators in the United States, estimating the average change in wholesale producer prices.
Rising production costs increase wholesale selling prices, which ultimately boosts inflation. In normal economic conditions, growing inflation usually puts upward pressure on the national currency quotes, implying a tighter central bank monetary policy.
Previous values: 0% (+1.8% YoY) in September, +0.2% (+1.7% YoY) in August, +0.1% (+2.2% YoY) in July, +0.2% (+2.6% YoY) in June, -0.2% (+2.2% YoY) in May, +0.5% (+2.2% YoY) in April, +0.2% (+1,6% YoY) in March, +0.6% (+1.6% YoY) in February, +0.3% (+0.9% YoY) in January 2024, 0% (+0.9% YoY) in December 2023, -0.5% (+1.3% YoY), +0.5% (+2.2% YoY), +0.7% (+1.6% YoY), +0.3% (+0.8% YoY), +0.1% (+0.2% YoY), -0.3% (+0,9% YoY), +0.2% (+2.3% YoY), -0.5% (+2.7% YoY), -0.1% (+4.9% YoY), +0.7% (+5.7% YoY) in January 2023.
If the data exceeds the forecasted value, the US dollar will likely strengthen. Conversely, if the data falls below forecasted and previous values, this will exert pressure on the Fed. This could lead to the Fed’s monetary policy easing, which will negatively impact the US dollar.
21:00 – GBP: Bank of England Governor Andrew Bailey’s Speech
Market participants are waiting for Andrew Bailey to clarify the situation regarding the future policy of the UK central bank. Typically, during the speech of the Bank of England governor, the British pound and the FTSE index of the London Stock Exchange face a significant spike in volatility, especially if there are any indications regarding monetary policy tightening or easing. Andrew Bailey will likely explain the Bank of England’s interest rate decision and discuss the UK economy’s health and prospects against the backdrop of high energy prices and inflation.
23:50 – JPY: Japan GDP for Q3 2024 (Preliminary Estimate)
GDP is a measure of a country’s overall economic condition, which assesses the rate of growth or decline of a country’s economy. The Gross Domestic Product report, published by the Cabinet Office of Japan, represents the total value of all final goods and services produced by Japan over a certain period in monetary terms. A rising trend in GDP is seen as positive for the yen, while a low reading is seen as negative.
In Q2 the country’s GDP stood at +0.7% (2.9% YoY) in the previous Q2 after -0.5% (-1.8% YoY) in Q1 2024, 0.1% (+0.4% YoY) in Q4 2023, -0.8% (-3.2% YoY) in Q3, +1.0% (+4.2% YoY) in Q2, +1.0% (+4.0% YoY) in Q1 2023.
The data suggests a bumpy recovery for the Japanese economy after it collapsed due to the coronavirus pandemic in 2020.
The forecast (preliminary estimate) implies that Japan’s GDP contracted again in Q3 2024, which is negative for the yen.
Readings that exceed expectations will undoubtedly bolster the yen and Japanese stock indices. Conversely, underperformance will exert pressure on them.
Friday, November 15
02:00 – CNY: Industrial Production. Retail Sales
China is a major buyer of commodities and a supplier of a wide range of finished goods to the global commodity market. Since China’s economy is the second largest in the world, the release of its significant macroeconomic indicators can profoundly influence the overall financial market.
Besides, China is the largest trading partner of Australia and New Zealand, purchasing a significant amount of commodities from these countries.
Therefore, positive macro statistics from China may also exert a positive influence on these commodity currencies. Conversely, if the anticipated data indicates a deceleration in one of the world’s largest economies, it would be a detrimental factor for global stock markets and commodity currencies.
The National Bureau of Statistics of China report on industrial production shows the output of Chinese industrial enterprises, such as factories and manufacturing facilities. The increase in industrial production is a positive factor for the yuan, indirectly signaling the possibility of accelerating inflation, which may force the People’s Bank of China to tighten monetary policy.
Conversely, the decline in the indicator value may negatively impact the yuan.
Previous values YoY: +5.4%, +4.5%, +5.1%, +5.3%, +5.6%, +6.7%, +4.5%, +7.0%, +6.8%, +6.6%, +4.5%, +3.7%, +4.4%, +3.5%, +5.6%, +3.9%, +2.4% in February 2023.
The retail sales level index, published monthly by the National Bureau of Statistics of China, gauges the change in the aggregate value of sales at the retail level across the country. The index is often viewed as an indicator of consumer confidence and economic prosperity and reflects the state of the retail sector in the near term. An increase in the index value is usually positive for the yuan, while a decrease in the index value will affect it negatively. Previous values YoY: +3.2%, +2.1%, +2.7%, +2.0%, +3.7%, +2.3%, +3.1%, +5.5%, +7.4%, +10.1%, +4.6%, +2.5%, +3.1%, +12.7%, +18.4%, +10.6%, +3.5%, -1.8%, -5.9% after +8% in the last months of 2019 and -20.5% in February 2020.
The data indicate that this sector of the Chinese economy continues to recover after a strong decline in February and March 2020. If the data prove weaker than the forecasted or previous values, the yuan may experience a decline, potentially a sharp one.
07:00 – GBP: UK GDP for Q3 2024 (Preliminary Estimate)
GDP is viewed as an indicator of the UK economy’s condition. The growing GDP indicator is considered positive for the British pound. The UK GDP rate was one of the highest in the world until 2016 when the Brexit referendum occurred. Subsequently, its growth decelerated, and with the onset of the COVID-19 pandemic, the UK GDP rate dropped.
Previous GDP values: +0.5 in Q2, +0.7% in Q1 2024, -0.3% in Q4, -0.1% in Q3, 0% in Q2, +0.2% in Q1 2023, +0.1% in Q4 2022, -0.1% in Q3, +0.1% in Q2, +0.5% in Q1 2022, +1.5% in Q4 2022.
The key factors that may force the Bank of England to keep the rate low include weak GDP, slow labor market growth, and low consumer spending. Should the GDP data fall significantly below previous values, the pound will face downward pressure. Conversely, high GDP readings will bolster the currency.
13:30 – USD: Retail Sales. Retail Sales Control Group
This Census Bureau report on retail sales reflects the total sales of US retailers of all sizes and types. The change in retail sales is a key indicator of consumer spending. The report is a leading indicator, and the data may be subject to significant revisions in the future. High indicator readings strengthen the US dollar, while low readings weaken it. A relative decline in the indicator may have a short-term negative impact on the US dollar, while a rise in the indicator will positively impact the currency. In September, the value of the indicator stood at +0.4% (after +1.0% in August, +0.1 in July, 0% in June, +0.1% in May, 0% in April, +0.7% in March, +0.6% in February, -0, 8% in January 2024, +0.6% in December 2023, +0.3%, -0.1% +0.7%, +0.6%, +0.7%, +0.2%, +0.3%, +0.4%, -1.0%, -0.6%, +3.2%, -0.8%, -1.1%, +1.1%, -0.2%, +0.7%, -0.4%, +1.0% in the previous months).
Retail sales is the main indicator of consumer spending in the United States, showing the change in the retail industry.
Retail sales serve as an indicator of domestic consumption, contributing the most to the US GDP and being one of the main factors of inflation risks increase or decrease. Deterioration of the indicator values is a negative factor for the US dollar. Inflation deceleration may prompt the Fed to begin the process of easing monetary policy.
The Retail Control Group indicator gauges volume in the retail industry and is used to calculate price indexes for most goods. High readings strengthen the US dollar, while low results weaken the currency. A slight increase in the figures is unlikely to boost the dollar. If the data is lower than the previous readings, the dollar may be negatively impacted in the short term. Previous values: +0.7%, +0.3%, +0.4%, +0.9%, +0.4%, -0.3%, +0.9%, 0%, -0.4% in January 2024, +0.6%, +0.2%, +0.2%, +0.2%, +0.2%, +0.7%, +0.3%, +0.4%, +1.0%, -1.2%, -0.1%, +2.6% in January 2023.
Price chart of EURUSD in real time mode
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. 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.
{{value}} ( {{count}} {{title}} )
This post is originally published on LITEFINANCE.
