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Economic calendar for the week 25.05.2020 - 31.05.2020

May 24, 2020

May 24, 2020

Economic calendar for the week 25.05.2020 – 31.05.2020Jana Kane

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

next trading week 25.05.2020 to 31.05.2020**

Trading on key Forex news: we are expecting the publication of important macro statistics from Germany, Canada, the Eurozone, the US, and Japan.

Despite another increase in trade and political tensions in relations between the United States and China, major US stock indexes ended the past week in positive territory, which cannot be said about the dollar. The DXY dollar index fell over the week, although the dollar strengthened in the last two days of the week.

Investors remain cautious after the US President Donald Trump accused China of “pain and massacres around the world.” On Wednesday, the US Senate approved the bill, by which Chinese companies may be forced to refuse to register on the US stock exchanges. And on Thursday, after China signaled that it would introduce new national security laws in Hong Kong, the US State Department warned Beijing of the consequences of continuing to pursue a policy that could undermine Hong Kong’s autonomy and force the United States to act.

Demand for defensive assets such as gold and the yen remains at a high level. At the same time, the dynamics of the dollar in the near future is likely to be determined by the dynamics of the US stock indices.

Their growth has so far stalled due to reports casting doubt on the effectiveness of the anticipated coronavirus drug. Progress in vaccine development could be a critical factor in further economic and financial recovery.

Nevertheless, a confident breakthrough by the S&P500 index of the resistance level of 3000.0 will trigger the weakening of the dollar.

The next week will not have much important macro statistics releases. Nevertheless, investors will most pay attention to Thursday’s publication of data from the US labor market and US annual GDP for the 1st quarter, as well as a preliminary assessment of consumer inflation in the Eurozone in May. Eurozone CPI indices will be published on Friday.

_ 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

Monday, May 25

No important macro statistics planned to be released. It’s a bank holiday in the UK and Memorial Day in the US. Therefore trading volumes on Monday during European and American trading sessions will be low.

Nevertheless, traders should pay attention at 17:30 (GMT) to the speech by the head of the Bank of Canada Stephen Poloz. Annual inflation in Canada in April reached a negative level. The last time the annual fall in consumer prices occurred in September 2009. The Canadian economy, as well as the entire global economy, is showing signs of slowdown in the first half of this year due to a decline in business activity caused by the coronavirus pandemic. Earlier this year, Stephen Poloz said that the Canadian economy is quite stable, which allows you to keep rates unchanged, despite the worsening situation in the global economy. However, the situation is rapidly changing, and not for the better. It will now be interesting to hear Poloz’s opinion regarding the stability of the Canadian economy and the monetary policy of the central bank. If Stephen Poloz touches on the monetary policy of the Bank of Canada, the volatility in the Canadian dollar quotes will increase sharply. The harsh tone of his speech will strengthen the Canadian dollar. The soft rhetoric of Stephen Poloz’s speech and the intention to pursue a soft monetary policy will negatively affect the CAD quotes.

It may also provide some guidance for investors on the eve of the next meeting of the Bank of Canada, which will be held next week (June 3).

Tuesday, May 26

No important macro statistics planned to be released.

Wednesday, May 27

No important macro statistics planned to be released.

Thursday, May 28

**12:00 EUR Harmonized Index of Consumer Prices  (HICP) in Germany

(preliminary release)**

This index is published by the EU Statistical Office and is calculated on the basis of a statistical method agreed between all EU countries. It is an indicator for assessing inflation and is used by the Governing Council of the ECB to assess the level of price stability. A positive result strengthens the EUR, a negative result weakens it.

In January, the HICP index (in annual terms) grew by +1.6%, in February by +1.7%, and in April by +0.8%. Preliminary forecast for May: +0.6%. The euro is unlikely to react very positively to the publication of this indicator. If the data turn out to be better than the forecast, then the euro may strengthen in the short term. The growth is a positive factor for the euro. However, this is still not enough to break the negative trend of the euro. The data suggests there is still low inflationary pressure in Germany. Data worse than the forecast and the previous value will negatively affect the euro.

**12:30 USD Initial jobless claims in the United States over the

past week. Orders for capital goods (ex defense and aviation). US Annual GDP for the 1st quarter (second estimate)**

The situation on the country’s labor market is still deteriorating. Back in February, the initial jobless claims indicator 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 claims, shocking observers and market participants. A similar indicator was published last Thursday (for the week of May 10-15) with a value of 2.438 million claims.

The US Department of Labor data published earlier this month showed an increase in unemployment in the country in May to the level of 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 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.

Orders for capital goods (ex defense and aviation)

This indicator reflects the value of orders received by manufacturers of capital goods (capital goods are durable commodities used for the production of durable goods and services) involving large investments. Goods manufactured in the defense and aviation sectors of the US economy are not included in this indicator. A high result strengthens the USD. Previous indicator values: -0.8% (in March), -0.9% (in February), +1.0% (in January). In theory, the relative growth of the indicator has a positive effect on the dollar. However, the reaction of the market to its negative value may be negative for the dollar in the short term. Data worse than the previous value will also negatively affect dollar quotes.

US annual GDP for the 1st quarter (second estimate)

GDP data is one of the key (along with labor market data and inflation) for the Fed in terms of its monetary policy. A strong result strengthens the US dollar; a weak GDP report negatively affects the US dollar. In the previous 4th quarter, GDP growth was +2.1%. The preliminary forecast for the 1st quarter of 2020 was -4.1%, but actually turned out to be -4.8%. The data takes into account the impact of coronavirus on the US economy. However, experts predict an even stronger slowdown in the 2nd quarter. It is likely that the publication of the data will cause a short-term decline in the dollar. Data weaker than the forecast may even more negatively affect the dollar quotes.

23:30 JPY Tokyo Consumer Price Index (CPI) (ex fresh food)

This consumer price index published by the Bureau of Statistics of Japan reflects an estimate of the price dynamics obtained by comparing the retail prices of the corresponding basket of goods and services. The Tokyo CPI index ex fresh food, which is an important barometer of changes in consumer trends, came out with a value of +0.4% in March, and in April with a negative value of -0.1% (in annual terms). Forecast for May: +0.1%. Inflation in Japan is still low. Relative growth of the indicator can strengthen the yen in the short term. However, a decrease in the indicator will negatively affect the yen.

During the publication of CPI indices, an increase in volatility is expected in the yen quotes and in the Japanese stock market, especially if the actual values ​ significantly differ from the forecast.

23:50 JPY Industrial Production

This indicator published by the Ministry of Economy, Trade and Industry reflects the volume of production of factories, plants, and mining enterprises in Japan. It attracts attention, since it is the main indicator of the state of the country’s manufacturing sector. A high value is considered a positive (or bullish) factor for JPY, and a low value is considered negative. In March, industrial production in Japan decreased by -5.2% (in annual terms). The next drop in this indicator in April is expected to have a negative impact on the yen.

Friday, May 29

**09:00 EUR Consumer Price Index. Core Consumer Price Index

(preliminary release)**

Consumer Price Index (CPI) is published by Eurostat and determines the price change of a selected basket of goods and services for a given period. The index is a key indicator for measuring inflation and changing consumer preferences. A positive result strengthens the EUR, a negative result weakens it. In January, CPI increased by 1.4% (in annual terms), in February - by +1.2%, in March - by +0.7%, and in April - by +0.3%, which indicates low inflationary pressures and even slowing inflation. Forecast for May: +0.2% (in annual terms). The expected data are below the previous value, which is already negative for the euro. If they turn out to be worse than the forecast, the euro may shortly but sharply decline. The data better than the forecast and/or the previous value can strengthen the euro in the short term, despite the low value (the target level of consumer inflation of the ECB is slightly below 2.0%).

Core Consumer Price Index (Core CPI) determines the change in prices of a selected basket of goods and services for a given period and is a key indicator for assessing inflation and changing consumer preferences. Food and energy are excluded from this indicator for a more accurate estimate. A high result strengthens the EUR and a low result weakens it. In January, Core CPI increased by 1.1% (in annual terms), in February - by +1.2%, in March - by +1.0%, in April - by +0.9%. If the data for May is worse than the previous value or forecast, this could negatively affect the euro. If the data turn out to be better than the forecast or the previous value, then the euro will most likely react with the growth of quotations, but only in the short term. Eurozone inflation remains low, which is a negative factor for the euro. Forecast for May: +0.9%.

12:30 CAD Canada’s GDP annual data

Canada’s GDP report is published by Statistics Canada. The Canada’s GDP Quarterly Report reflects the total volume of all goods and services produced by Canada for the quarter (in annual terms) and is considered an indicator of the overall state of the Canadian economy.

A strong report will strengthen the CAD. A weak GDP report will negatively impact the CAD.

The report for the 4th quarter turned out to be weaker than previous reports (+0.3% against +1.1% in the 3rd quarter of 2019 and +3.5% in the 2nd quarter).

If the data for the 1st quarter of 2020 is stronger than the previous value (+0.3%), the CAD may strengthen. Data worse than the previous value is likely to have a strong negative effect on the CAD.

Price chart of EURUSD in real time mode

![Economic calendar for the week 25.05.2020 – 31.05.2020][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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