Economic calendar for the week 15.06.2020 - 21.06.2020

June 14, 2020

Economic calendar for the week 15.06.2020 – 21.06.2020Jana Kane

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

next trading week 15.06.2020 to 21.06.2020

Trading on key Forex news: we are expecting the publication of important macro statistics from Canada, Germany, the US, Britain, Australia, as well as the results of the meeting of the central banks of Great Britain, Japan, and Switzerland.

The US dollar rose last week, while global and US stock indices fell and completely negated the growth of the previous week.

At the end of the trading day last Friday, the DXY dollar index futures were trading around 97.35, 160 pips above the low reached on Wednesday.

Donald Trump criticized the Fed for gloomy forecasts made after the last meeting of the central bank, and said that he expects a successful second half. His statements were a response to the comments by Jerome Powell, who last Wednesday made a forecast about the possibility of a long-term economic recovery and problems in the labor market. Meanwhile, the Fed’s position proved to be an important support for the markets, and the Fed indicated its readiness to provide additional support to the economy and credit markets.

Still, evidence suggests that economic recovery after a pandemic will be slow and uneven. There is a threat of a second wave of pandemic, which may further cloud economic prospects.

Next week, the other three largest world central banks (the National Bank of Switzerland, the Bank of Japan and the Bank of England) will hold their meetings and make decisions on monetary policy.

Investors will also pay attention to the publication of important macro statistics from Canada, Germany, the US, Britain, and Australia.

_ 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, June 15

No important macro statistics planned to be released.

Tuesday, June 16

**01:30 AUD Minutes of the June meeting of the Reserve Bank 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 inflation above all puts pressure on the AUD.

At a meeting earlier this month, 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 businesses and Australian 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.

Despite the relaxation of quarantine measures, some restrictions are still in effect and adversely affecting the economy, especially the services sector. In the 1st quarter, the Australian economy contracted, and Treasury Secretary Josh Frydenberg officially announced the recession that occurred in the country for the first time in 30 years.

After one of the bank’s last meetings, its head Philip Lowe promised that “the board will not raise rates until there is progress in ensuring full employment and there is confidence in stabilizing inflation in the target range of 2-3%.” In his opinion, “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 increased.”

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

**03:00 JPY Bank of Japan interest rate decision. Bank of Japan’s

press conference and monetary policy comments**

The Bank of Japan will decide on the interest rate. Currently, the main rate in Japan is in negative territory, amounting to -0.1%. Most likely, the rate will remain the same. If it is cut and goes deeper into negative territory, such a decision will cause a sharp decline in the yen in the foreign exchange market and growth in the Japanese stock market. In any case, during this period of time, a jump in volatility is expected in the yen trading and on the Asian financial market.

At the end of May, during its extraordinary meeting, the Bank of Japan left the deposit rate at -0.1%, and the target level of yield on 10-year bonds at 0%, while maintaining the annual target level of ETF purchases at 12 trillion yen. The bank also introduced a new lending program worth 30 trillion yen, which will allow commercial banks to provide financing to companies affected by the coronavirus pandemic.

Under this program, companies can receive loans without collateral and at a zero interest rate. The goal of the program is to support commercial companies whose bankruptcy rates have accelerated rapidly in Japan over the past month, due to the coronavirus pandemic among other things.

During the press conference, head of the Bank of Japan Haruhiko Kuroda will give comments on the monetary policy of the bank. The Bank of Japan continues to adhere to its super-soft monetary policy. As Kuroda has repeatedly stated before, “it is appropriate for Japan to patiently continue the current soft monetary policy.” Markets usually react to Kuroda’s speeches. Surely, he will again touch upon the topic of monetary policy during his speech, which will cause increased volatility not only in yen trading, but also throughout the Asian and world financial markets.

If the bank’s leaders decide that the Japanese economy is stable, and the momentum of inflation to the target level of 2% does not decrease, then they will refrain from changing the policy.

06:00 JPY Bank of Japan’s press conference

During the press conference, head of the Bank of Japan Haruhiko Kuroda will give comments on the monetary policy of the bank. Despite earlier measures taken by the bank to stimulate the Japanese economy, inflation remains low, production and consumption are falling, which negatively affects export-oriented Japanese producers. Markets usually react to Kuroda’s speeches. If he touches on the topic of monetary policy during his speech, volatility will increase not only in yen trading, but also throughout the Asian and world financial markets.

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

over the past 3 months. Unemployment rate**

On a monthly basis, the UK Office of National Statistics (ONS) publishes an average wages report that includes the 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 June report suggests that the average wages with bonuses have grown over the last 3 months (February-April) by 1.3% (against +2.4%, +2.8%, +3.1% , +2.9%, +3.2%, +3.2% in previous periods); without bonuses - by 1.8% (against +2.7%, +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 time, the office publishes data on unemployment in the UK. Over the 3 months from February to April, unemployment is expected to be at 4.5% (against 3.9%, 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, however, unemployment growth over the last reporting period is a negative factor.

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

**06:00 EUR Harmonized Index of Consumer Prices (HICP) in Germany

(final 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 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 March, the HICP index (in annual terms) grew by +1.3%, and in April - by +0.8%. The preliminary estimate for May was +0.5%. Final value for May is +0.8%. 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. Data suggests low inflationary pressures in Germany.

09:00 EUR ZEW Institute Business Sentiment Index 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 indicate an optimistic attitude of investors, which is a bullish factor for the EUR. Vice versa, 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 - already -49.5 (with a forecast of -23.4), although in April and May it unexpectedly improved to 28.2 and 51.0, respectively. Forecast: the value for June will be 60.0, 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.

12:30 USD Retail Sales (Ex Autos). Retail Control Group

This report (Core Retail Sales Ex Autos) reflects the total sales of retailers of all sizes and types, with the exception of car dealerships. Changes in retail sales are a major indicator of consumer spending. The report is leading, and in the future the data can be strongly revised. A high result strengthens the US dollar, a low one weakens it. A relative decrease in the indicator may have a short-term negative impact on the dollar, and an increase in the indicator will positively affect the USD. Forecast for May: +5.1% (against -17.2% in April, -4.5% in March, -0.4% in February).

Retail sales are a major consumer spending indicator in the United States, showing changes in retail sales. The Retail Control Group measure measures the volume of the entire retail industry and is used to calculate price indices for most products. A strong result strengthens the US dollar, and vice versa, a weak report weakens the dollar. A slight increase in performance is unlikely to accelerate the growth of the dollar. Data worse than the previous period (-15.3% in April, +1.7% in March, 0.0% in January and February) will negatively affect the dollar in the short term. Forecast for May: +4.0%.

14:00 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 on the Fed’s monetary policy 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 about the need to maintain a soft central bank policy will cause a fall in the dollar and the growth of the US stock markets.

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

Wednesday, June 17

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. CPI is a key indicator of inflation. Its publication will cause significant movement of the pound in the foreign exchange market, as well as the London Stock Exchange Index FTSE100.

In the previous reporting month (in April), consumer inflation (in annual terms) grew by 0.8%.

Forecast for May: +0.5% (in annual terms). This value is unlikely to provide significant support to 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 Consumer Price Index (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 April, Core CPI (in annual terms) grew by +1.4%. 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 May: +1.2% (in annual terms). An indicator below the forecast and/or previous values can trigger the 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. Core Consumer Price Index rose in March by +1.6% (in annual terms), and in April - by +1.2%. If the data for May is worse than the previous values, then this will negatively affect the CAD. Data better than expected and above the previous values will strengthen the Canadian dollar.

Forecast for May: Consumer Price Index will come out with a value of -0.1% (in annual terms), Core CPI with a value of +1.4%.

21:45 NZD New Zealand GDP for the 1st quarter

The release of this data will cause increased volatility in the NZD. Despite the recent fall in commodity and agricultural prices (especially for dairy products, which are the most important component of New Zealand exports), and the coronavirus pandemic, which damaged the global economy, it is likely that New Zealand’s 1st quarter GDP report it will come out with positive indicators so far, since it will reflect the situation in the economy before the coronavirus. It is expected that GDP growth in the 1st quarter of 2020 amounted to +0.5% (previous values +0.5% and +0.7%) and +1.8% in annual terms (previous value, for the 4th quarter of 2019, is also +1.8%), which is likely to positively affect the positions of the New Zealand currency. If the data are better than expected, the NZD will strengthen. Data worse than forecast and previous values may adversely affect the NZD.

Thursday, June 18

01:30 AUD Employment rate. Unemployment rate

Employment rate reflects a monthly change in the number of Australian citizens employed. The growth of the indicator has a positive effect on consumer spending, which stimulates economic growth. A high value is a positive factor for the AUD, and a low value is negative. Forecast: in May, the number of employed Australian citizens fell by 125,000 (after rising in March by 5,900 and falling in April by 594,300).

Also at the same time, the Australian Bureau of Statistics will publish a report on unemployment - an indicator that estimates the proportion of unemployed to the total number of able-bodied citizens. The growth rate indicates a weak labor market, which leads to a weakening of the national economy. The decline is a positive factor for the AUD. Forecast: unemployment in Australia in May was at the level of 7.0% (against 6.2% in April, 5.2% in March, 5.1% in February). In general, the indicators can be described as negative. However, in other large economies, the labor market has deteriorated on an even larger scale due to coronavirus.

The RBA leaders have repeatedly stated that in addition to the international trade situation, the Australian economy and central bank monetary policy plans are influenced by the level of debts and household expenses, the growth of workers’ salaries, as well as the state of the country’s labor market.

In March 2020, the RB of Australia lowered its key interest rate by 0.50% to a new record low of 0.25% due to coronavirus, which was the 5th rate cut in the last year. According to the RBA management, for the growth of salaries and acceleration of inflation to the target range, an unemployment rate of 4.5% or lower is required. Unemployment in the country is not declining, and the return of inflation to the middle of the target range of 2-3% is not even on a distant horizon.

The AUD is unlikely to respond positively to the publication of data from the country’s labor market. If the values of the indicators turn out to be worse than the forecast, then the Australian dollar may decrease significantly in the short term. Data better than forecast will strengthen AUD short-term.

**07:30 CHF The decision of the SNB on the interest rate. Monetary

Policy Statement**

The current deposit rate is in negative territory and amounts to -0.75%. At the previous meeting in March, rates remained unchanged. The Swiss National Bank has consistently advocated soft monetary policy in the country, and the national currency has traditionally been considered “overvalued.” Recently, the franc has largely lost the status of a safe haven currency, and the threat of intervention certainly restrains the franc from excessive growth. According to the leaders of the SNB, the franc is “still very overvalued,” and intervention in the foreign exchange market remains “an important means of maintaining the low attractiveness of investments in francs and easing upward pressure on the currency.”

Traders will also carefully study the statement of the SNB to catch signals regarding further plans concerning their monetary policy. Tough rhetoric of the statement will strengthen the franc. The soft tone and the intention to continue the extra soft monetary policy of the SNB will negatively affect the franc. High volatility is expected in the foreign exchange market and, above all, in franc trading, if the management of the SNB makes unexpected statements.

08:00 CHF Press conference of the SNB

After the publication of the decision on the rate, the press conference of the Swiss National Bank will begin. During the press conference and the speech by the Chairman of the SNB Thomas Jordan, the volatility of the CHF trade is increasing, and traders are waiting for signals regarding further plans for the monetary policy of the SNB. Jordan’s tough rhetoric will strengthen the franc. The soft tone of the speech and the intention to continue the extra soft monetary policy of the SNB will negatively affect the franc.

High volatility is expected in the foreign exchange market and, above all, in franc trading if Thomas Jordan makes unexpected statements.

**11:00 GBP Bank of England’s interest rate decision. Minutes of

the meeting of the Bank of England. Planned volume of asset purchases by the Bank of England. Monetary Policy Report.**

In March (March 11 and March 19), during its extraordinary meetings, the Bank of England cut its interest rate twice, bringing it to 0.1%, and announced its intention to acquire British government bonds in the amount of 200 billion British pounds, trying to counter economic damage from a coronavirus pandemic. Management of the central bank announced the expansion of its bond portfolio to 645 billion pounds from the current volume of 445 billion pounds. “The current situation is completely unprecedented,” said Andrew Bailey, the new Bank of England manager, at a press conference after the extraordinary meeting on March 19. Bailey said he expects a sharp contraction in the economy due to the coronavirus, and the Bank of England is ready to take further stimulus measures if necessary. “No, we are not done acting,” he said. Based on these statements by Andrew Bailey, it is fair to expect further action from the Bank of England towards easing its monetary policy. It is expected that at this meeting on June 18, the Bank of England will again increase the volume of bond purchases to 745 billion pounds.

Also at this time, the minutes of the Monetary Policy Committee (MPC) of the Bank of England are published with the votes cast for and against the increase/decrease in the interest rate. The main risks for the UK after Brexit are associated with expectations of a slowdown in the country’s economic growth, as well as with a large current account deficit in the UK balance of payments.

The Bank of England Asset Purchase Program, also called Quantitative Easing, has remained unchanged since August 2016 at £435 billion per month. In March, the Bank of England’s bond purchase volume on the open market was increased to a new level of 645 billion pounds.

Intrigue over further the actions of the Bank of England continues. Both in the pound trade and the FTSE100 index, a lot of trading opportunities will be there during the publication of the bank’s decision on rates.

Also at the same time, the Bank of England’s monetary policy report will be published containing an assessment of economic prospects. At this time, the volatility in pound quotes can rise sharply. One of the main guidelines for the Bank of England regarding the prospects of monetary policy in the UK, in addition to GDP, is the level of inflation. If the tone of the report is soft, then the British stock market will receive support, and the pound will decline. Conversely, tough rhetoric of the report in relation to containing inflation, implying an increase in the interest rate in the UK, will lead to the strengthening of the pound.

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 initial claims for unemployment benefits were 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 published last Thursday (for the week May 31 - June 06) came out with a value of 1.542 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 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, under current conditions (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.

23:50 JPY Bank of Japan Monetary Policy Committee Meeting

At this meeting, the Bank of Japan Monetary Policy Committee will once again summarize the results of the bank’s next meeting at the beginning of the week, analyze the economic situation in Japan and provide guidance on possible future prospects for the Bank of Japan’s financial policy.

If the tone of the minutes of the meeting indicates the firm intentions of the Bank of Japan regarding monetary policy in the country, this will negatively affect the Japanese stock market and strengthen the yen. Conversely, soft rhetoric regarding the prospects of the bank’s monetary policy will contribute to the weakening of the yen and the growth of the Japanese stock market.

Friday, June 19

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 March): -10%. If the data for April is weaker than the previous value, the CAD may drop sharply in the short term.

17:00 USD Speech by the Fed Chairman Jerome Powell