Economic calendar for the week 18.05.2020 - 24.05.2020

May 17, 2020

Economic calendar for the week 18.05.2020 – 24.05.2020Jana Kane

**Overview of the main events of the Forex economic calendar for the

next trading week 18.05.2020 to 24.05.2020**

Trading on key Forex news: we are expecting the publication of important macro statistics from Japan, Australia, the UK, Germany, Canada, the Eurozone, the US, as well as speeches by the Fed Chairman Jerome Powell in Congress.

Last week showed that investors are still worried about the growing trade tension between the US and China, as well as the likelihood of a second wave of the epidemic, which has already damaged the global economy.

Investors’ concern is expressed in the fall of US and world stock indices, which resumed last week, and in the growth of gold quotes, which came close to $1,750.00 an ounce and exceeded the 7-year maximum reached in April last Friday. Investor concerns intensified last Wednesday, following the statements by Fed Chairman Jerome Powell that the economy may require additional fiscal support. “The current economic downturn has been the worst since World War II,” Powell said. “Additional fiscal support can be expensive, but worth it if such measures help avoid long-term economic damage and recover faster.” He also spoke out against negative interest rates.

Current evidence suggests that recovery from the crisis caused by the coronavirus pandemic will take longer than anticipated.

The dollar is also in demand as a defensive asset. By the end of last week, the dollar strengthened again, and the DXY dollar index rose another 0.6% over the week (about 60 points), to around 100.40 at the end of the trading day last Friday.

Particularly noticeable was the strengthening of the dollar against major commodity currencies, such as Canadian, New Zealand and Australian dollars against the backdrop of rising oil prices. Those, in turn, received support after the OPEC monthly report, which demonstrates the firm intention of the oil cartel to continue to control the supply. The International Energy Agency (IEA) in its monthly report also softened some of its most pessimistic forecasts. The oil market seems to be set for further growth.

Next week, investors will pay attention to the publication of important macro statistics from Japan, Australia, Great Britain, Germany, Canada, the Eurozone, the US, as well as the speech by the Fed Chairman Jerome Powell in Congress.

_ Traders should pay attention to the following significant macroeconomic data expected next week:_

* during the coming week new events may be added to the calendar and scheduled events may be canceled

****** GMT time

Sunday, May 17

**23:50 JPY Japan’s GDP for the 1st quarter of 2020 (preliminary

release)**

GDP is considered an indicator of the general state of the country’s economy that estimates its growth or decline. The report on gross domestic product published by the Cabinet of Ministers of Japan expresses in monetary terms the total value of all final goods and services produced by Japan for a certain period of time. The growing trend of the GDP indicator is considered a positive factor for the national currency (yen), and a low result is considered negative (or bearish).

In the previous 4th quarter of 2019, the country’s GDP fell by -1.8% (-7.1% in annual terms) after growing by +0.4% (+1.8% in annual terms) in the 3rd quarter . It is expected that Japan’s GDP in the 1st quarter of 2020 decreased by -1.2% (-4.6% in annual terms).

The data indicate a significant slowdown in the Japanese economy since the end of 2019, and this is a negative factor for the yen and the Japanese stock market.

If the data turn out to be even weaker, then the yen may drop significantly in the short term. Data better than forecast can strengthen the yen (in the short term).

Monday, May 18

No important macro statistics planned to be released.

Tuesday, May 19

**01:30 AUD Minutes of the May meeting of the Republic of

Australia**

This document is published two weeks after the meeting and the decision on the interest rate. If the RBA positively assesses the state of the labor market in the country, the GDP growth rate, and also shows a hawkish attitude towards the inflation forecast in the economy, the markets regard this as a higher probability of a rate increase at the next meeting, which is a positive factor for the AUD. The bank’s soft rhetoric regarding, above all, inflation puts pressure on the AUD.

At the meeting on May 5, the central bank maintained its current monetary policy unchanged. The key interest rate of the RBA was kept at a record low level of 0.25%, and the target level of yield on 3-year government bonds was also left at 0.25%. The decision to lower the rate and determine the current target level of government bond yield was made at an unscheduled meeting of the RBA on March 19 in order to support Australian business and citizens amid the rapid spread of the coronavirus pandemic. The government was also forced to introduce a social distancing regime, suspend enterprises and close borders for international traffic.

According to many economists, Australia is on the verge of the first recession in the economy in 30 years.

“Substantial uncertainty remains regarding the short-term prospects of the Australian economy. In April-June, a very strong decline in GDP is expected, as well as unemployment growth to a multi-year high,” said the RBA Governor Philip Lowe after one of the bank’s last meetings. Lowe also promised that “the board will not raise rates until there is progress in ensuring full employment and confidence in stabilizing inflation in the target range of 2-3%.” According to him, “there are no serious arguments in favor of tightening monetary policy in the short term,” and “it will be some time before interest rates are raised.”

Nevertheless, if the published minutes contain unexpected information regarding issues of the RBA monetary policy, then the volatility in the AUD quotes will increase.

**06:00 GBP Report on the average wages of the British citizens

over the past 3 months. Unemployment rate**

Every month, the UK National Office of Statistics (ONS) publishes a report on average wages, including a period for the last 3 months, with and without bonuses.

This report is a key short-term indicator of the dynamics of changes in the level of wages of employees in the UK. Wages growth is a positive factor for the GBP, and a low value of the indicator is negative. Forecast: the May report suggests that the average wages with bonuses have grown over the last 3 months (January-March) by 2.7% (against +2.8%, +3.1%, +2.9% , +3.2%, +3.2% in previous periods); without bonuses - by 2.7% (against +2.9%, +3.1%, +3.2%, +3.4%, +3.5% in previous periods). This is still positive data despite the fact that they are below the average values. If the data are better than expected, the pound is likely to strengthen in the foreign exchange market.

Also at this timethe office publishes data on unemployment in the UK. Over the 3 months from January to March, unemployment is expected to be at 4.4% (against 4.0%, 3.9%, and 3.8% in previous periods). Since 2012, the unemployment rate in the UK has been steadily declining (from 8.0% in September 2012). This is a positive factor for the pound.

If the data from the UK labor market turn out to be worse than the forecast and/or the previous value, then the pound will be under pressure.

In any case, at the time of publication of data from the British labor market, volatility is expected to increase in pound quotes and on the London Stock Exchange.

09:00 EUR ZEW Indicator of **Economic Sentiment in

Germany**

This index reflects the difference between the share of optimistic and pessimistic investors, thus assessing the mood of investors and businesses. The growth of the indicator and its positive value indicates an optimistic attitude of investors, which is a bullish factor for the EUR. Conversely, a decrease in the indicator and its negative value is a negative factor for the EUR. In February, the indicator value was 8.7 (against 26.7 in January, 10.7 in December), and in March it was already -49.5 (with a forecast of -23.4), although in April it unexpectedly improved to 28.2. Forecast: the indicator in May will be at 33.5, which is likely to support the euro in the short term. If the data turn out to be worse than the forecast and the previous value, then the euro will decrease even more significantly.

14:00 USD Speech by the Fed Chairman Jerome Powell in Congress

The Fed Chairman Jerome Powell will speak in Congress on economics and monetary policy. His comments may affect both short-term and long-term USD trading if he again touches on the monetary policy of the Fed. A more hawkish position regarding the monetary policy of the Fed is seen as positive and strengthens the US dollar, while a more cautious position is assessed as negative for the USD.

If he makes unexpected statements, the volatility in trading in financial markets may increase. Any hints to the need for an even softer central bank policy will cause the dollar to fall and the US stock markets to rise.

Participants in the financial market will carefully study his speech in order to catch signals regarding the Fed’s further actions.

Wednesday, May 20 Мая

01:30 CNY Bank of China’s interest rate decision

Since May 2012, the People’s Bank of China has been steadily lowering the interest rate to support Chinese manufacturers. The last time in 2020 the bank lowered its interest rate in April (by 0.20% to 3.85% at the moment).

In recent months, in the context of international trade conflicts and a slowdown in the global economy, the world’s largest central banks are moving towards easing their monetary policies in order to support national economies and increase the competitiveness of goods exported from these countries.

The People’s Bank of China is also in line with this process. The depreciation of the yuan has become particularly relevant in the last 2 years, when the confrontation between the two most powerful economies in the world began. One of the measures to mitigate the negative consequences of increased duties on the import of Chinese goods into the United States was the depreciation of the national currency of China. Such a measure was called, inter alia, to maintain the previous volumes of imports of Chinese products to the United States, which would cost American buyers less due to the difference in the exchange rates of national currencies of the United States and China.

Now there is another strong negative factor - the coronavirus pandemic.

It is likely that at this meeting, the People’s Bank of China will keep the interest rate at the same level of 3.85%, although a reduction in the rate is also possible.

However, if the People’s Bank of China makes unexpected statements or decisions, then volatility may increase in the entire financial market. Investors will also be interested in the bank’s assessment of the consequences of coronavirus for the Chinese economy and its policy in the near future in this regard.

06:00 GBP Consumer Price Index. Core Consumer Price Index

Consumer Price Index (CPI) reflects the dynamics of retail prices for a group of goods and services that are part of the British consumer basket. The CPI is a key indicator of inflation. Its publication causes major movement of the pound in the foreign exchange market, as well as the London Stock Exchange Index FTSE100.

In the previous reporting month (in March), consumer inflation (in annual terms) grew by 1.5% (against 1.7% in February).

Forecast for April: +0.9% (in annual terms). This value is unlikely to support the pound. An indicator below the forecast may trigger the weakening of the pound, as low inflation will force the Bank of England to maintain a soft monetary policy.

Core CPI is published by the Office of National Statistics and determines the change in prices of a selected basket of goods and services (except food and energy) for a given period. It is a key indicator for assessing inflation and changing consumer preferences. A positive result strengthens the GBP, a negative result weakens it.

In January, Core CPI (in annual terms) grew by +1.6%, in February - by +1.7%, and in March - by +1.6%. It is likely that the publication of the indicator will positively affect the pound if its value is higher than the forecast and the previous value. Forecast for April: +1.4% (in annual terms). An indicator below the forecast and / or previous values can trigger a weakening of the pound.

12:30 CAD Consumer Price Indices in Canada

The Bank of Canada’s Core Consumer Price Index (Core CPI) reflects the dynamics of retail prices for a basket of goods and services (excluding fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, long-distance transport, and tobacco products). The target inflation rate for the Bank of Canada is in the range of 1-3%. The increase in CPI is a harbinger of a rate increase and a positive factor for the CAD. Consumer prices in January rose by +0.3% (+2.4% in annual terms), in February - by +0.4% (+2.2% in annual terms), and in March the index fell by -0.6%. Core Consumer Price Index rose in March by 0% (+1.6% on an annualized basis). If the data for April is worse than the previous values, this will negatively affect the CAD. Data better than expected and above the previous values will strengthen the Canadian dollar.

Forecast for April: Consumer Price Index will come out with a value of +1.2% (in annual terms).

**18:00 USD Minutes from the last meeting of the Federal Open

Market Committee (FOMC minutes)**

The publication of the minutes is extremely important for determining the course of the current Fed policy and the prospects for raising interest rates in the United States. The volatility of trading in financial markets during the publication of the minutes usually increases, since the text often contains either changes or clarifying details regarding the outcome of the FOMC meeting.

Following two meetings in March, the Fed sharply cut its interest rate (to 0.25% from 1.75% in February), and also announced the allocation of US $700 billion for the purchase of US government bonds and mortgage- backed securities. Subsequently, the Fed has repeatedly announced additional measures to support the US economy and inject cheap liquidity into the financial system.

During an online session organized by the Peterson Institute for the World Economy, the Fed Chairman Jerome Powell said that “in terms of scale and speed, this decline has no precedent in modern history and is much worse than any recession since World War II,” adding that the Fed has not considered negative interest rates.

The soft tone of the minutes will have a positive effect on stock indices and negatively on the US dollar. The harsh rhetoric of Fed leaders regarding monetary policy prospects will push the dollar towards further growth.

Thursday, May 21

Europe celebrates the Catholic Ascension Day. Banks in European countries will be closed, and therefore trading volumes during the European session will be low.

02:30 AUD Speech by RBA Head Philip Lowe

In his speech, Philip Lowe will give an assessment of the current situation in the Australian economy and point out further plans for the monetary policy of the agency. Any signals from him regarding the change in the plans of the RBA monetary policy will cause a sharp increase in volatility in the AUD trading and in the Australian stock market. If he does not touch on the topic of monetary policy, then the reaction of the market to his speech will be weak.

Market participants would also like to hear Lowe’s opinion on the policies of the central bank in the context of the ongoing pandemic of the coronavirus and the threat of recession in Australia’s economy for the first in 30 years.

“Substantial uncertainty remains regarding the short-term prospects of the Australian economy. In April-June, a very strong reduction in GDP is expected, as well as an increase in unemployment to a multi-year high,” said Philip Lowe after the central bank kept its current monetary policy unchanged in early May. The key interest rate of the RBA was kept at a record low level of 0.25%, and the target level of yield on 3-year government bonds was also left at 0.25%. The decision to lower the rate and determine the current target level of government bond yield was made at an unscheduled meeting of the RBA on March 19 in order to support Australian business and citizens amid the rapid spread of the coronavirus pandemic.

**07:30 EUR Manufacturing PMI of the German economy according to

Markit Economics (preliminary release). Composite PMI of the German economy according to Markit Economics (preliminary release)**

PMI business activity index in the manufacturing sector of the German economy is an important indicator of business conditions and the general state of the German economy. This sector of the economy forms a significant part of German GDP. A result above 50 is seen as positive and strengthens the EUR, below 50 - as negative for the euro. Forecast for May (preliminary release): 40.0.

Previous values: 34.5 in April, 45.4 in March, 48 in February, 45.3 in January, which indicates a slowdown in business activity in this sector of the German economy. The growth of the indicator above the previous value may support the euro (in the short term), although its value is still below the value of 50. Data worse than the forecast will have a negative impact on the euro.

Composite PMI in the German economy is an important indicator of the business environment and the general state of the German economy. A result above 50 is seen as positive and strengthens the EUR, below 50 - as negative for the euro. Forecast for May (preliminary release): 36.0 against 17.4 in April, 35 in March, 50.7 in February, 51.2 in January. The publication of this indicator with the indicated expected value is unlikely to support the euro. The data worse than the forecast and below the value of 50.0, as a rule, have a negative impact on the euro.

**08:00 EUR Composite manufacturing PMI of the Eurozone economy

according to Markit Economics (preliminary release)**

Eurozone’s PMI is an important indicator of the state of the entire European economy. A result above 50 is seen as positive and strengthens the EUR, below 50 - as negative for the euro. Forecast for May (preliminary release): 24.0 versus 13.6 in April, 29.7 in March, 51.6 in February, 51.3 in January, which is unlikely to have a positive impact on the euro, even despite relative growth. If the data turn out to be worse than the forecast, then the euro may fall sharply in the short term.

**08:00 GBP UK Services PMI by Markit Economics (preliminary

release)**

PMI in the UK services sector is an important indicator of the state of the British economy, although the services sector does not have such a strong impact on the country’s GDP as PMI in the manufacturing sector.

If the data turn out to be worse than the forecast and the previous value, then the pound will most likely sharply decrease in the short term. Data better than forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is seen as positive and strengthens the GBP, below 50 - as negative for the GBP.

Previous indicator values: 13.4 in April, 34.5 in March, 53.2 in February, 53.9 in January. Forecast for May: 22.1.

12:30 USD Initial jobless claims in the US over the past week

The situation on the country’s labor market continues to deteriorate rapidly. Back in February, the indicator of initial claims for unemployment benefits was within its average values of 193-252 thousand. However, then the situation began to deteriorate sharply. Over the week of March 22-28, 6.9 million claims were submitted, then 6.606 million applications, shocking observers and market participants. A similar indicator published last Thursday (for the week of May 03-08) came out with a value of 2.981 million claims.

The US Department of Labor data published earlier this month showed an increase in unemployment in the country in April to 14.7%. Economists attribute this to the coronavirus, which has damaged the US economy. Many US companies announced layoffs, and authorities ordered non-vital companies to close their offices and stores in the wake of the coronavirus epidemic. Current weekly growth rates of claims far exceed the previous record level of 695,000, reached in October 1982. Then the number of initial claims filed in four weeks was 2.7 million.

This indicator (the number of initial claims for unemployment benefits) reflects the state of the labor market. An increase in value negatively affects consumption and economic growth. Under normal conditions, a high result weakens the US dollar, while a low one strengthens it. However, in the current environment (the coronavirus pandemic and a sharp economic slowdown), the reaction of market participants to the publication of this report by the US Department of Labor can be completely unpredictable.

18:30 USD Speech by the Fed Chairman Jerome Powell

Powell’s comments may affect both short-term and long-term USD trading if he again touches on the Fed’s monetary policy. A more hawkish position regarding the monetary policy of the Fed is seen as positive and strengthens the US dollar, while a more cautious position is assessed as negative for the USD.

Participants in the financial market will carefully study his speech in order to catch signals regarding the Fed’s further actions. If he does not touch upon questions of the monetary policy of the Fed, the reaction to his speech will be weak.

22:45 NZD Retail Sales (Q1)

The retail sales report is published by the New Zealand Bureau of Statistics. Changes in retail sales are generally considered an indicator of consumer spending. In general, a high value of the indicator is a positive factor for the NZD, and a low value is a negative factor. In the 3rd quarter, retail sales grew by +1.7%, and in the 4th quarter - by +0.7%. The NZD will strengthen if the data is better than the previous value. A weak report will negatively impact the NZD.

23:30 JPY National Consumer Price Index (CPI)

National Consumer Price Index (CPI) is published by the Japan Bureau of Statistics and determines the price change of a selected basket of goods and services for a given period. It is a key indicator for assessing inflation and changing consumer preferences. A positive result strengthens the JPY, a negative result weakens it.

In March, National CPI grew (in annual terms) by +0.4%. Core National CPI (ex food and energy) grew by +0.6%. It is likely that the publication of the indicator will positively affect the yen if its value is higher than the forecast and the previous value. Forecast for April: National CPI (excluding food and energy) fell by -0.1% (in annual terms). This value is likely to provoke weakening of the yen.

Friday, May 22

11:30 EUR Account of the monetary policy meeting of the ECB

This document provides an overview of the current policy of the ECB with the planned changes in the financial and monetary spheres. The publication of this document may cause a surge in volatility in trading of the euro and the European stock market.

Investors will carefully study the text of the minutes of the recent meeting of the ECB in order to catch additional signals regarding the QE program and the prospects for monetary policy. Recently, weak macro data from the Eurozone have been indicating a slowdown in the European economy, which, against the backdrop of international trade conflicts and the coronavirus pandemic, is putting pressure on the ECB towards further easing of monetary policy.

At the meeting on April 30, the ECB refrained from making changes to the current policy of the bank. Nevertheless, the volatility in trading on the euro could rise sharply if the minutes from the April meeting of the ECB contain unexpected statements or new information regarding the prospects of monetary policy.

12:30 CAD Retail Sales Index

Retail Sales Index is published monthly by Statistics Canada and estimates total retail sales. The index is often considered an indicator of consumer confidence and reflects the state of the retail sector in the near future. Index growth is usually a positive factor for the CAD; a decrease in the indicator will negatively affect the CAD. Previous index value (for February): 0.3%. If the March data turns out to be weaker than the forecast (according to the forecast, zero growth in retail sales is expected), the CAD may drop sharply in the short term.

Price chart of EURUSD in real time mode

![Economic calendar for the week 18.05.2020 – 24.05.2020][1]

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.

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