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Economic calendar for the week 08.06.2020 - 14.06.2020

June 7, 2020

June 7, 2020

Economic calendar for the week 08.06.2020 – 14.06.2020Jana Kane

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

next trading week 08.06.2020 to 14.06.2020**

Trading on key Forex news: we are expecting the publication of important macro statistics from Japan, Germany, the Eurozone, China, the US, Great Britain, as well as the results of the Fed meeting.

Last week, the dollar fell significantly, while global stock indices continued to grow. The yen also declined. Investors are actively withdrawing funds from defensive assets and shifting to risky but profitable assets in the stock market, which is confidently recovering after the start of lifting of restrictive measures introduced in connection with the coronavirus pandemic.

At the end of the trading day last Friday, futures for the DXY dollar index were trading around 97.00, 134 points below the price a week earlier.

The ECB surprised participants in financial markets by announcing last Thursday an increase in its bond purchase program to 1.35 trillion euros (1.52 trillion US dollars) in an effort to ease the pressure experienced by governments due to the coronavirus pandemic.

The ECB’s decision was made amid growing fears that the economic downturn in Europe would be deeper than it was supposed to be, much worse than in the US and would not spare even the most powerful countries such as Germany.

As a result of quarantine restrictions, restraint in spending by companies and consumers, as well as a collapse in exports, the European economy was on the verge of the deepest economic downturn since World War II.

The euro strengthened significantly last week after the ECB decided to expand the program to stimulate the economy. However, the seriousness of the problems facing Italy and other southern European countries makes many economists doubt the adequacy of the stimulus measures adopted by the ECB. They believe that in order to avoid destabilization of the financial markets, the bank will have to keep the bonds it buys for many years.

The Fed will also hold its regular meeting next week. Starting in March, the Fed lowered its interest rate to 0.25% and pumped liquidity in the amount of about $3 trillion into the US financial system.

Investors will be closely scrutinizing the Fed’s accompanying statements to understand its future plans for monetary policy.

Next week, investors will also pay attention to the publication of important macro statistics for Japan, Germany, the Eurozone, China, the USA, and Great Britain.

_ 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, June 7

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

estimate)**

GDP is considered an indicator of the general state of the country’s economy and 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 -1.9% (-7.1% in annual terms) after growing by +0.4% (+1.8% in annual terms) in the 3rd quarter. Japan’s GDP is expected to decline by -0.9% in the 1st quarter of 2020 (previous estimate was -1.2%) or -3.4% in annual terms.

The data indicate a very tangible 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, the yen may drop significantly in the short term. Data better than forecast can strengthen the yen (in the short term).

However, it is also worth noting that in recent weeks, participants in financial markets have paid little attention to news and weak macro statistics, abandoning protective assets, including the yen, in favor of more risky and profitable stock market assets.

Monday, June 8

06:00 EUR Industrial production in Germany

This important indicator reflects the volume of production of factories, plants and mining enterprises in Germany. 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 the EUR, and a low value is considered negative. Forecast for April: -15.5% (against -9.2% in March). Data better than expected may also provide short-term support for the euro.

Tuesday, June 9

09:00 EUR Eurozone’s GDP for the 1st quarter (final estimate)

GDP is considered an indicator of the general state of the Eurozone economy. The growing trend of GDP is considered positive for the EUR; a low result weakens the EUR.

Recently, macro data from the Eurozone have been indicating a slowdown in the growth of the European economy. However, a decision by the ECB last week to increase its bond purchase program to 1.35 trillion euros (1.52 trillion US dollars) by the end of June 2021 could ease the pressure experienced by governments due to the coronavirus pandemic, and also stabilize the economy of the Eurozone. As a result of quarantine restrictions, restraint in expenses of companies and consumers, as well as a collapse in exports, the economy was on the verge of the deepest economic recession since the Second World War.

The euro reacted positively to the ECB’s decision to expand the stimulus program for the European economy. Nevertheless, according to the forecast of economists, the Eurozone’s GDP is expected to decline in the 1st quarter by -3.8% (-3.2% in annual terms) after growth by +0.1% (+1.0% in annual terms) in the previous 4th quarter of 2019.

If the data are weaker than expected, then the euro may decline. Data better than forecast will strengthen the euro in the short term.

Wednesday, June 10

01:30 CNY Consumer Price Index (CPI)

The National Bureau of Statistics of China will present data reflecting the dynamics of consumer prices in China in May. Rising consumer prices could trigger inflation acceleration, which could force the People’s Bank of China to take measures aimed at tightening fiscal policy. The increase in consumer inflation may cause the yuan to rise in price, a low result will put pressure on the yuan.

China’s economy is the second largest in the world after the American one. Therefore, the publication of important macroeconomic indicators of this country has a significant impact on world financial markets, primarily on the position of the yuan, other Asian currencies, the dollar, commodity currencies, as well as Chinese and Asian stock indices. China is the largest buyer of commodities and a supplier to the global commodity market of finished products of a wide range.

In January 2020, the growth of the consumer inflation index amounted to +1.4% (+5.4% in annual terms), in February +0.8% (+5.2% in annual terms), in March the CPI index decreased by -1.2%, although it grew in annual terms by +4.3%, and in April - by -0.9% (+3.3% in annual terms).

Deterioration of macroeconomic indicators, including a decline in consumer inflation, could negatively affect the yuan and commodity currencies such as Canadian, Australian, and New Zealand dollars. This is most true for the Australian dollar, since China is Australia’s largest trade and economic partner.

According to the forecast, it is expected that the consumer price index will continue to decline in May, but on a smaller scale: by -0.5%. At the same time, the growth of the index in annual terms, as expected, amounted to +3.7% in May. The growth of the consumer inflation index will positively affect the yuan, as well as commodity currencies, primarily the Australian dollar. However, a relative decrease in CPI may negatively impact them.

12:30 USD Core Consumer Price Index (ex food and energy)

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 US dollar, while a low result weakens it. In January, the value of the indicator amounted to +0.2% (+2.3% in annual terms), in February +0.2% and +2.4% (in annual terms), in March -0.1% (+2.1% in annual terms), in April -0.4% (+1.4% in annual terms). Forecast for May: 0% and +1.3% (in annual terms), which indicates some improvement in the situation after the index fell in March and April. If the data for May will be weaker than the forecast, then the dollar will most likely respond with a short-term but strong decline. Data better than forecast will strengthen the dollar.

18:00 USD The Fed’s decision on interest rate

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 $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. Usually, with the easing of monetary policy, the national currency becomes cheaper and its quotes decline.

In the past few weeks, the dollar has gone down, as investors have been withdrawing funds from defensive assets to buy more risky and profitable stock market assets. The role of the dollar as a defensive asset is also declining.

It is widely expected that at this meeting the rate will remain at 0.25%. At the end of May, the US Federal Reserve Chairman Jerome Powell said he was “comfortable with the current situation and the way we (the Fed) are moving now.” “We have not come close to any of our limits,” Powell said, making it clear that the Fed intends to continue to support the economy.

However, during the publication of the decision on the rate, volatility can increase sharply throughout the financial market, primarily in the US stock market and in dollar quotes, if the decision on the rate differs from the forecast.

**18:30 USD Press Conference of the FOMC (US Federal Open Market

Committee)**

The press conference of the US Federal Open Market Committee lasts about an hour. In the first part, the decree is read, followed by a series of questions and answers that can increase market volatility.

Powell’s comments can affect both short-term and long-term USD trading. 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. Any hints about the possibility of changing the current monetary policy will cause an increase in volatility in dollar quotes and in the US stock market.

Thursday, June 11

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

The situation on the country’s labor market is still deteriorating. Back in February, the number of initial jobless claims was within its average values ​​of 193-252 thousand. However, then the situation began to deteriorate sharply. During 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 published last Thursday (for the week of May 24-29) came out with a value of 1.877 million claims.

The US Department of Labor data published in early May showed an increase in unemployment in the country to the level of 14.7%. In May, the US unemployment rate was 13.3%. 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 new 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.

Friday, June 12

06:00 GBP Industrial production

This is a leading indicator of the manufacturing sector in the UK economy. And since industrial production, together with consumer spending, is the basis of UK GDP, the publication of this indicator may cause a surge in volatility in the pound and the London Stock Exchange. A high value is a positive factor for the GBP, and a low value is negative. Forecast: industrial production increased in April by 15% (after a decrease of -4.2% in March). If the data is worse than forecast, the pound will weaken in the foreign exchange market.

08:30 GBP UK’s GDP

GDP is considered an indicator of the general state of the British economy. A growing trend in GDP is considered positive for the GBP. UK’s GDP was one of the highest in the world until 2016, when a Brexit referendum was held. Then its growth slowed down, and with the onset of the global coronavirus pandemic, the rate of growth of British GDP completely switched to negative territory.

The main factors that can force the Bank of England to keep rates low are weak growth in GDP, the labor market, and low consumer spending. If GDP data are weaker than expected, this will put even more downward pressure on the pound. A strong GDP report will strengthen the pound.

According to the forecast, the UK GDP is expected to fall by -18.7% in April (after falling by -5.8% in March). This is a negative factor for the GBP.

**14:00 USD University of Michigan Consumer Confidence Index

(Preliminary release)**

This indicator reflects the confidence of American consumers in the economic development of the country. A high level indicates economic growth, while a low indicates stagnation. Previous indicator values: 99.8 in January, 101.1 in February, 89.1 in March, 71.8 in April, 72.3 in May. An increase in the indicator will strengthen the USD, and a decrease in the value will weaken the dollar. It is expected that this indicator will be released in June with a value of 75.0. There is a trend for the recovery of the growth rate, which is a positive factor for the USD. Data worse than forecast may adversely affect the dollar in the short term.

Price chart of EURUSD in real time mode

![Economic calendar for the week 08.06.2020 – 14.06.2020][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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