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Economic calendar for the week 22.06.2020 - 28.06.2020

June 21, 2020

June 21, 2020

Economic calendar for the week 22.06.2020 – 28.06.2020Jana 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 Germany, the Eurozone, the US, Great Britain, Japan, the minutes of the ECB June meeting, as well as the results of the meetings of the central banks of China and New Zealand.

Neither the Bank of England, nor the National Bank of Switzerland, nor the Bank of Japan began making changes to their monetary policy last week. The Bank of England decided to increase the quantitative easing program by £100 billion, which was good news for investors but signaled a high uncertainty about the prospects for the British economy suffering one blow after another before December 31, the completion date of the Brexit transition. According to media reports, the United Kingdom will not extend this period, and the EU ambassador to the United Kingdom Joao Vale de Almeida said last Thursday that the EU will introduce full customs control and inspection for goods from the UK in 2021.

The US dollar rose last week, while global and US stock indices also ended the past week in a positive territory.

The Fed Chairman Jerome Powell, who spoke last week in Congress, reiterated that the Central Bank will support the economy until its recovery, advising Congress not to scale back support measures too quickly. Soft rhetoric of Powell’s statements, as well as billions of dollars sent by the Fed to the financial system, are a positive factor for the stock market. However, Powell also stated (after the Fed’s meeting) that “the pandemic is causing great damage and creates great uncertainty about the future,” the scale of the recession is “veiled by extreme uncertainty,” and it will depend on whether the virus can be contained. Powell believes that “the labor market may have bottomed out, but we (the Fed) do not know for sure,” repeating that the pandemic “creates great uncertainty about the future.”

So, judging by the mood prevailing among the leaders of the largest world central banks, the situation in the world economy is far from stable, and high volatility and multidirectional movements will continue to be observed in world financial markets, providing traders with earning opportunities.

Next week, two more major world central banks (RB of New Zealand and People’s Bank of China) will hold their meetings and make decisions on monetary policy. They are also unlikely to change their monetary policy.

Investors will also pay attention to the publication of important macro statistics from Germany, the Eurozone, the US, Great Britain, Japan, and the minutes of the ECB meeting in June.

_ 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 21

23:00 AUD Speech by head of the RBA Philip Lowe

In his speech, Philip Lowe will give an assessment of the current situation in the Australian economy and indicate further plans for the monetary policy of the agency. Any signals regarding changes in RBA monetary policy plans 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, as economists believe, the beginning of a recession in Australia’s economy, the first in 30 years.

“There is significant uncertainty about the short-term prospects of the Australian economy,” said Philip Lowe after one of the RBA meetings.

The key interest rate of the RBA remains at a record low of 0.25%, while the target rate of return on 3-year government bonds is also at 0.25%. The decision to lower the rate and determine the current target level of government bond yields was made at an unscheduled meeting of the RBA on March 19 in order to support Australian businesses and citizens amid the rapid spread of the coronavirus pandemic.

Monday, June 22

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 producers. The last time the bank lowered its interest rate was 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. This measure was supposed 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, another strong negative factor has been added to this - 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 rate cut 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.

15:00 CAD Speech by Head of the Bank of Canada  Tiff Macklem

Tiff Macklem replaced Stephen Poloz as head of the Bank of Canada on June 3, 2020. Macklem, in fact, has the same objectives as his predecessor on this position.

Annual inflation in Canada reached a negative level in April. The last time the annual drop in consumer prices occurred was 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 downturn in business activity due to the coronavirus pandemic. Earlier this year, Stephen Poloz said that the Canadian economy is stable enough 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 listen to McMlem’s opinion on the stability of the Canadian economy and the monetary policy of the central bank. If Tiff Macklem 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 help strengthen the Canadian dollar. The soft rhetoric and the intention to pursue a soft monetary policy will negatively affect the CAD quotes.

Probably, it can also provide some guidance for investors before the next meeting of the Bank of Canada, which will be held in the middle of next month (July 15).

Tuesday, June 23

**07:30 EUR PMI in the manufacturing sector of the German economy

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

PMI 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 June (preliminary release): 39.2.

Previous values: 36.6 in May, 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 50. Data worse than the forecast will have a negative impact on the euro.

Composite PMI of the German economy is an important indicator of the business environment and 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 June (preliminary release): 34.1 against 32.3 in May, 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 strongly 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 PMI in the manufacturing sector 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 June (preliminary release): 25.0 (against 31.9 in May, 13.6 in April, 29.7 in March, 51.6 in February, 51.3 in January), which is probably unlikely to have any positive impact on the euro. If the data turn out to be worse than the forecast, then the euro may fall sharply in the short term.

**08:30 GBP UK’s PMI in the services sector according to Markit

Economics (preliminary release)**

PMI in the UK’s services sector is an important indicator of the state of the British economy, although the service 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, the pound will most likely fall sharply 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 considered positive and strengthens the GBP, below 50 - as negative for the GBP.

Previous indicator values: 29.0 in May, 13.4 in April, 34.5 in March, 53.2 in February, 53.9 in January.

Wednesday, June 24

**02:00 NZD The decision of the Reserve Bank of New Zealand on the

interest rate. RBNZ’s accompanying statement**

After the bank management made a decision to lower the rate by 0.75% during an unscheduled meeting on March 15, the current interest rate of the Republic of New Zealand is at 0.25%. The management of the bank explained its decision by the loss of momentum in the New Zealand economy and the sharp slowdown in the global economy amid the coronavirus pandemic.

“World economic activity continues to weaken, which reduces the demand for goods and services from New Zealand. Increased uncertainty and a decline in international trade contribute to a decrease in economic growth in the trading partner countries,” the RBNZ said in a recent statement.

The RBNZ believes that wage growth remains weak. At the same time, inflationary expectations are reduced, and low levels of business confidence indicate a slowdown in hiring and wages growth.

Restrained economic growth (New Zealand’s GDP growth has slowed since the second half of 2018) and a weakening labor market, as well as an escalation of international trade wars and a worsening global economic outlook, are pushing the Reserve Bank of New Zealand to keep interest rates low. An additional and unforeseen risk for the world and New Zealand economies was the epidemic of coronavirus in the world.

It is expected that at this meeting the RBNZ will not begin to lower or raise the rate, but may argue in favor of lowering it in the coming months in the event of a worsening economic situation in the country and in the world.

In the accompanying statement, the RBNZ management will explain the decision on the interest rate and comment on the economic conditions that contributed to the adoption of this decision.

At this time, the volatility in trading on the New Zealand dollar could rise sharply.

Earlier, the RBNZ stated that against the backdrop of a “set of uncertainties,” the monetary policy “will remain soft in the foreseeable future,” but “may be adjusted accordingly.” According to the bank’s management, for a stable recovery of the New Zealand economy and rising inflation “a lower New Zealand dollar rate is needed”.

Probably, the head of the RBNZ Adrian Orr will reaffirm the bank’s intention to pursue a soft monetary policy, which will preserve the pressure on the New Zealand currency.

Thursday, June 25

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 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 on the European stock market.

Investors will carefully study the text of the minutes of the recent ECB meeting to catch additional signals regarding the QE program and the prospects for monetary policy. Recently, weak macro data from the Eurozone has 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 a meeting on June 4, the ECB refrained from making changes to the current policy of the bank. However, the ECB increased the volume of the emergency purchase program for PEPP bonds by another 600 billion euros. In March, the regulator announced the allocation of 750 billion euros for this purpose. Now, the total volume of the PEPP program will be 1.35 trillion euro.

As the ECB head Christine Lagarde said at a subsequent press conference, the fall of the European economy has no precedent, and current macro data indicate a serious deterioration in the labor market and a serious drop in economic activity.

Volatility in trading on the euro may increase sharply if the minutes from the ECB meeting in June contain unexpected statements or new information regarding the prospects of monetary policy.

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

annual GDP for the 1st quarter (final estimate). Orders for capital goods (ex defense and aviation)**

The situation on the country’s labor market is still deteriorating. 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 claims, shocking observers and market participants. A similar indicator published last Thursday (for the week of June 7 - June 13) came out with a value of 1.508 million new 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, 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.

US annual GDP for the 1st quarter (final estimate). GDP data is one of the key indicators (along with labor market data and inflation) for the Fed in terms of its monetary policy. A strong result strengthens the US dollar; weak GDP report negatively affects the US dollar. In the previous 4th quarter, GDP growth amounted to +2.1%. The preliminary forecast for the 1st quarter of 2020 was -4.1%, but actually turned out to be -5.0%. The data already 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.

Orders for capital goods (ex defense and aviation). This indicator reflects the value of orders received by producers 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: -6.1% in April, -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. Forecast for May: -10%.

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 price dynamics obtained by comparing the retail prices of the corresponding basket of goods and services. The CPI Tokyo index, excluding fresh food prices, which is an important barometer of changes in consumer trends, came out in March with a value of +0.4%, and in April with a negative value of -0.1% (in annual terms). Forecast for June: -0.2%. Japan’s inflation 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, volatility is expected to increase in yen quotes and in the Japanese stock market, especially if actual values ​​will differ significantly from the forecasts.

Friday, June 26

No important macro statistics planned to be released.

Price chart of EURUSD in real time mode

![Economic calendar for the week 22.06.2020 – 28.06.2020][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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