The US dollar continued to rally last week, following the release of robust macroeconomic data the week before. This data significantly lowered the chances of a substantial interest rate cut at the US Fed November meeting.
Next week, the European Central Bank is scheduled to hold its meeting. There is a possibility that the ECB may take a similarly bold approach, as some members of the bank’s Governing Council, including ECB President Lagarde, are in favor of such a decision.
Besides, in the upcoming week, 14.10.2024 – 20.10.2024, market participants will focus on the publication of macro data on the UK, Canada, New Zealand, Germany, Australia, the US, and China.
Note: During the coming week, new events may be added to the calendar, and / or some scheduled events may be cancelled. GMT time
The article covers the following subjects:
Key facts
- Monday: no important macro statistics is scheduled.
- Tuesday: UK labor market data.
- Wednesday: UK CPI.
- Thursday: ECB meeting.
- Friday: China’s GDP.
- Key event of the week: ECB meeting.
Monday, October 14
There are no important macro statistics scheduled to be released. The US and Canada have a day off due to national holidays. Although trading volumes will be minimal, a sharp increase in volatility in the thin market is possible due to the speculative actions of some players. Meanwhile, the Asian trading session may remain active, particularly with the upcoming release of Chinese CPIs on Sunday.
Tuesday, October 15
06:00 – 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 October report suggests that average earnings, including bonuses, rose again in the last three months, including June, July, and August, after gaining +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 +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 4.1% for the three months of June, July and August (against 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.
08:00 – EUR: ECB Bank Lending Survey
A survey of the bank lending system conducted by EU experts in the financial sector is carried out four times a year. The primary goal of the survey is to gather comprehensive information about the conditions of bank lending in the eurozone.
The ECB officials use this data when making decisions on the bank’s monetary policy. This report may cause increased volatility in the euro and European stock market quotes upon its release if it contains unexpected conclusions regarding lending conditions for businesses and households in the eurozone.
12:30 – CAD: Canadian Consumer Price Indexes
The Consumer Price Index (CPI) reflects the retail price trends of a selected basket of goods and services. Meanwhile, the Core CPI excludes fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation, and tobacco products. The inflation target for the Bank of Canada ranges between 1% and 3%. A higher CPI reading is a sign of a rate hike and is positive for the Canadian dollar.
Previous values:
- CPI: -0.2% (+2.0% YoY), +0.4% (+2.5% YoY), -0.1% (+2.7% YoY), +0.6% (+2.9% YoY), +0.5% (+2.7% YoY), +0.6% (+2.9% YoY), +0.6% (+2.9% YoY), +0.3% (+2.8% YoY), 0% (+2.9% YoY), -0.3% (+3.4% YoY), +0.1% (+3.1% YoY), +0.1% (+3.1% YoY), -0.1% (+3.8% YoY), +0.4% (+4.0% YoY), +0.6% (+3.3% YoY), +0.1% (+2.8% YoY);
- Core CPI released by the Bank of Canada: -0.1% (+1.5% YoY), +0.3% (+1.7% YoY), -0.1% (+1.9% YoY), +0.6% (+1.8% YoY), +0.2% (+1.6% YoY), +0.5% (+2.0% YoY), +0.1% (+2.1% YoY), +0.1% (+2, 4% YoY), -0.5% (+2.6% YoY), +0.1% (+2.8% YoY), +0.3% (+2.7% YoY), -0.1% (+2.8% YoY), +0.1% (+3.3% YoY), +0.5% (+3.2% YoY), -0.1% (+3.2% YoY).
The data suggests that inflation continues to decelerate, which prompts the Canadian central bank to consider implementing a dovish monetary policy. If the expected data is worse than the previous values, it will negatively affect the Canadian dollar, but if the data exceeds expectations, it will bolster the currency.
21:45 – NZD: Consumer Price Index for Q3 2024
The Consumer Price Index is a key indicator for assessing inflation, which reflects the retail price movements for a group of goods and services comprising the consumer basket. A positive reading strengthens the New Zealand dollar, while a negative one weakens it.
Previous values: +0.4% (+3.3% YoY) in Q2 2024, +0.6% (+4.0% YoY) in Q1 2024, +0.5% (+4.7% YoY) in Q4 2023, +1.8% (+5.6% YoY) in Q3 2023, +1.1% (+6.0% YoY) in Q2 2023. Annualized values: +6.7% in Q1 2023, +7.2% in Q4 and Q3 2022, +7.3% in Q2, +6.9% in Q1 2022, +5.9% in Q4 2021, +4.9% in Q3 2021, +3.3% in Q2 2021, +1.5% in Q1 2021.
A relative decline in the indicator readings and a value below the forecast may negatively affect the New Zealand dollar.
Wednesday, October 16
Exact Time Not Specified (European Trading Session Beginning) – EUR: German Retail Sales
The retail sales economic indicator is a key metric that tracks the level of consumer demand and significantly impacts market performance and the national currency. Additionally, it serves as an indirect indicator of inflation, making it a key concern for a country’s central bank and market participants.
The Retail Sales report is released by the German Federal Statistical Office. The Retail Sales change is considered to indicate the consumer spending level. High indicator values are positive for the British pound, while low readings are negative.
Previous values: -3.9%, -1.3%, +4.0%, -1.9%, +2.2%, -1.2% in January 2024.
06:00 – GBP: Consumer Price Index. Core Consumer Price Index
The Consumer Price Index (CPI) measures the retail prices of a group of goods and services comprising the UK consumer basket. The CPI is a key indicator of inflation. The British pound’s movement on the currency market and the London Stock Exchange FTSE 100 index performance depend on the release of the CPI data.
In August, the UK consumer inflation rose +0.3% (+2.2% YoY), following -0.2% (+2.2% YoY) in July, +0.1% (+2.0% YoY) in June, +0.3% (+2.0% YoY) in May, +0.3% (+2, 3% YoY) in April, +0.6% (+3.2% YoY) in March, +0.6% (+3.4% YoY), -0.6% (+4.0% YoY) in January 2024, +0.4% (+4.0% YoY) in December. The data suggests persistent inflationary pressures in the UK, which are expected to bolster the British pound, particularly if the actual data surpasses the forecasted values.
An indicator reading below the forecast/previous value may cause the weakening of the British pound since low inflation will force the Bank of England to stick to the easy monetary policy course.
The Core CPI, published by the Office for National Statistics, measures the price change in a selected basket of goods and services (excluding food and energy) over a given period. It is a key indicator for assessing inflation and changes in consumer preferences. A positive result strengthens the British pound, while a negative outcome weakens it.
In August, the core CPI gained +3.6% YoY after +3.3% YoY in July,
Thursday, October 17
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: +47,500 in August, +58,200 in July, +50,200 in June, +39,700 in May, +38,500 in April, -6,600 in March, +500 in February, -65,100 in January 2024, +61,500 in December 2023, +55,000 in October, +6,700 in September, +64,900 in August, -14,600 in July, +32,600 in June, +75,900 in May, -4,300 in April, +53,000 in March, +64,600 in February, -11,500 in January, +14,600 in December, +64,000 in November, +32,200 in October, +900 in September, +33,500 in August, -40,900 in July, +88,400 in June, +60,600 in May, +4,000 in April, +17,900 in March, +77,400 in February, +12,900 in January 2022.
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 4.2% in September (against 4.2% in August and 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.
12:15 – EUR: ECB Interest Rate Decision
The European Central Bank will publish its decision on the main refinancing operations and the deposit facility rates, which currently stand at 3.65% and 3.50%, respectively.
The ECB’s tight stance on inflation and the level of key interest rates favor the euro, while a softer stance and lower rates weaken it. Given the high inflation in the eurozone, according to the ECB leadership, the risk balance for the eurozone’s economic outlook remains negative.
Anyway, the eurozone inflation continues to decelerate, showing +1.8% in September, +2.2% in August, +2.6% in July, +2.5% in June, +2.6% in May, +2.4% in April and March 2024. However, the ECB policymakers suggest that inflation is still high, and the Governing Council is determined to reduce it to 2% in a timely manner.
The ECB considers that GDP growth may shrink due to the energy crisis in the EU, increased economic uncertainty, global economic slowdown, and stricter financing conditions. Although the recession is not expected to last long, robust growth is also unlikely.
Thus, according to the ECB leaders’ signals, the main refinancing operations and the deposit facility rates will remain unchanged at the end of this meeting. However, a tougher decision and increase in interest rates, as well as the reduction, are possible, given the high risks of recession and slowing inflation in the eurozone.
12:30 – 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 August, the value of the indicator stood at +1.0% (after +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 in September, according to economists. At the same time, most market participants still expect two interest rate cuts this year.
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: +0.3, +0.3, +0.9%, +0.4%, -0.3%, +1.1%, 0%, -0.4% in January 2024, +0.8%, +0.4%, +0.2%, +0.6%, +0.1%, +1.0%, +0.6%, +0.2%, +0.7%, -0.3%, +0.5%, +2.3%, -0.3%, -0.5%, +0.4%, +0.5%, +0.4%, +1.1% in the earlier months of 2022.
12:45 – EUR: ECB Press Conference. ECB Monetary Policy Statement
This press conference will draw significant attention from market participants. Volatility may increase not only in euro quotes but also across the entire financial market if the ECB leaders make unexpected statements. ECB executives will evaluate the current economic situation in the eurozone and provide insights on the bank’s rate decision. Historically, after some ECB meetings and subsequent press conferences, the euro exchange rate experienced fluctuations of 3%-5% in a short time frame.
A dovish tone of the statements will negatively impact the euro. Conversely, a hawkish tone regarding the central bank’s monetary policy will bolster the euro.
Friday, October 18
02:00 – CNY: China’s GDP for Q3. Industrial Production. Retail Sales
The National Bureau of Statistics of China will release the GDP growth data for Q3 2024.
Chinese GDP is expected to grow again in Q3 2024 after +0.7% (+4.7% YoY) in Q2 2024, +1.6% (+5.3% YoY) in Q1 2024, +1.0% (+5.2% YoY) in Q4 2023, +1.3% (+4.9% YoY) in Q3 2023, +0.8% (+6.3% YoY) in Q2 2023, +2.2% (+4.5%YoY) in Q1, 0% (+2.9% YoY) in Q4 2022, +3.9% (+3.9 YoY) in Q3, -2.6% (+0.4% YoY) in Q2, +1.3% (+4.8% YoY) in Q1 2022, +1.6% (+4.0% YoY) in Q4, +0.2% (+4.9% YoY) in Q3, +1.3% (+7.9% YoY) in Q2 and +0.6% (+18.3% YoY) in Q1 2021.
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: +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: +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.
06:00 – GBP: GBP: Retail Sales
The retail sales economic indicator is a key metric that tracks the level of consumer demand and significantly impacts market performance and the national currency. Additionally, it serves as an indirect indicator of inflation, making it a key concern for a country’s central bank and market participants.
The Retail Sales report is released by the UK Office for National Statistics. The Retail Sales change is considered to indicate the consumer spending level. High indicator values are positive for the British pound, while low readings are negative.
Previous values YOY: +2.5%, +1.4%, -1.2%, +1.3%, -2.3%, +0.4%, -0.3%, +0.4% in January 2024, -2.8% in December 2023, +0.0%, -2.3%, -1.1%, -1.2%, -3.1%, -1.8 in June 2023.
Price chart of EURUSD in real time mode
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