Logo

Posts

Economic calendar for the week 06.07.2020 - 12.07.2020

July 4, 2020

July 5, 2020

Economic calendar for the week 06.07.2020 – 12.07.2020Jana Kane

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

next trading week 06.07.2020 to 12.07.2020**

Trading on key Forex news: we are expecting the publication of important macro statistics from the US, China, Canada, as well as the results of the RBA meeting.

US labor market data released last Thursday exceeded economists’ expectations. The US Department of Labor reported that the number of jobs in June increased by 4.8 million, while unemployment in the country fell to 11.1%, which exceeded the forecasts of economists (+3.0 million new jobs and 12.3% unemployment, respectively ) At the same time, even taking into account the improvement, the unemployment rate is still high by historical standards, and there are 15 million less jobs in the US labor market than in February.

Now, with the release of labor market data, investors will see if employment growth leads to higher consumer spending, which accounts for about two-thirds of US GDP.

All three major US stock indexes ended the week with an increase of 3.2% or more (on Friday the stock market was closed due to Independence Day).

In the coming weeks, investors will monitor the actions of the Federal Reserve and American politicians in connection with smoldering international trade conflicts and the need for additional measures to stimulate the economy against the backdrop of new outbreaks of coronavirus.

One way or another, the dollar remains a safe haven, and interest rates in the United States remain (albeit at a fraction of a percent) still higher than in most other developed economies.

The next week will not be full of important macro statistics. Of the most significant events for the coming week is the meeting of the Reserve Bank of Australia and its decision on the interest rate. Investors will also pay attention to the publication of important macro data from the US, China, and Canada.

_ 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, July 6

**14:00 USD Employment Index (from ISM) in the services sector. PMI

(from ISM) in the services sector of the US economy**

This is an important indicator of economic conditions in the United States published by the Institute for Supply Management (ISM) that reflects business conditions in the US services sector, taking into account the expectations of new orders, stocks, employment, and supplies. The ISM Employment Index in the services sector is considered an important leading indicator when the US Department of Labor compiles an employment report. A high value of the index strengthens the USD, and a low value weakens it. In April, this indicator came out with a value of 30.0, and in June - with a value for May 31.8. Despite relative growth, a result below 50 is seen as a negative factor for the USD. A relative decline in the index may also negatively affect the dollar in the short term. Forecast for June: 30.7.

PMI in the services sector assesses the state of the services sector in the US economy. The services sector data (unlike the manufacturing sector) have practically no effect on the country’s GDP. The growth of the indicator and the result above 50 are considered as a positive factor for USD. At the same time, a relative decrease in the indicator or data worse than the forecast may have a short-term negative impact on the dollar.

Forecast for June: 48.9 (against 45.4 in May, 41.8 in April). Despite relative growth, a result below 50 is seen as a negative factor for the USD. A relative decline in the index may also negatively affect the dollar in the short term.

Tuesday, July 7

04:30 AUD Interest rate decision. RBA’s accompanying statement

In March, the RBA made 2 rate cuts, bringing it to its current level of 0.25%, and launched a quantitative easing program. 3-year Australian government bonds have a target yield of 0.25%. The RBA has begun a program of lending to the banking system in the amount of at least 90 billion Australian dollars and intends to buy bonds worth 5 billion Australian dollars.

Negative forecasts of economists suggest that the Australian economy will decline by 6% in 2020, which will be the sharpest annual decline in GDP since the great depression of the 1920s. The unemployment rate is likely to rise to about 8.5%.

Some economists have started talking about Australia entering its first recession in nearly 30 years, which could turn into depression.

“We live in extraordinary and difficult times,” said the head of the central bank Philip Lowe. In his opinion, “further stimulation is needed.” He said this at the press conference on March 19, when the RBA lowered the interest rate during its unscheduled meeting.

Philip Lowe has repeatedly stated that the central bank is ready to lower the rate again if necessary, although the likelihood of introducing negative rates, in his opinion, is “extremely small.”

The main negative factors for the Australian economy are weak wages growth, a weak labor market and a slowdown in growth. Annual inflation has remained below the target range of 2-3% set by the RBA for almost four years.

Unemployment in the country has remained above 5% for many years, reluctant to decline. Now the coronavirus pandemic was added to the above-mentioned negative factors, which already hit the tourism and transport sector painfully. The RBA also expresses concern that unemployment could rise to the level of 8%, or even 10%.

In this regard, we cannot eliminate the possibility that on Tuesday July 7 the RBA may again reduce the rate, although most economists believe that the bank will leave the key rate unchanged at this level at 0.25%, while expressing concern over global economic outlook with the ongoing epidemic of coronavirus.

In an accompanying statement, the RBA leaders will explain the reasons for the decision on the rate. If the RBA signals a possibility of further easing of monetary policy, then a further fall in the Australian dollar will become inevitable.

Wednesday, July 8

No important macro statistics planned to be released.

Thursday, July 9

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. A rise in consumer prices could trigger an acceleration in inflation, which could force the People’s Bank of China to take measures to tighten 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 on 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 was +1.4% (+5.4% in annual terms), and in May CPI index decreased to -0.8% (+2.4% 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 more true for the Australian dollar, since China is Australia’s largest trade and economic partner.

According to the forecast, a decrease in the consumer price index is expected in June, but on a smaller scale: by -0.5%. At the same time, the growth of the index in annual terms, as expected, amounted to +2.7% in June. 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.

Friday, July 10

12:30 CAD Unemployment rate in Canada

Statistics Canada will release data on the country’s labor market for June.

Unemployment has grown in Canada in recent months amid massive closure of enterprises due to coronavirus and layoffs. Unemployment rose from the usual 5.6 - 5.7% to 7.8% in March and 13.7% in May. If unemployment continues to rise, the Canadian dollar will decline. If the data turn out to be better than the previous value, the Canadian dollar will strengthen. A decrease in unemployment is a positive factor for the CAD, an increase in unemployment is a negative factor.

Price chart of AUDUSD in real time mode

![Economic calendar for the week 06.07.2020 – 12.07.2020][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.

Rate this article:

{{value}}

( {{count}} {{title}} )

  1. cdn.liteforex.com/cache/uploads/blog_post/blog_posts/liteforex-blog-preview-trading-calendar1.png?q=75&w=1000&s=5f58bc1c1a4fe91f8438690ebcf2271f