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Economic calendar for the week 20.07.2020 - 26.07.2020

July 19, 2020

July 19, 2020

Economic calendar for the week 20.07.2020 – 26.07.2020Jana Kane

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

next trading week 20.07.2020 to 26.07.2020**

Trading on key Forex news: we are expecting the publication of important macro statistics from Canada, Germany, Eurozone, UK, as well as the results of the meeting of the People’s Bank of China and its decision on the interest rate.

American and European stock indices closed last week in the positive territory. Despite the signals that the American economy will face new challenges, S&P500 rose 1.1% and almost completely won back the positions it lost in 2020.

On the one hand, investors are concerned about the exacerbation of the conflict between the United States and China, as well as the further spread of the coronavirus and the economic consequences of the pandemic, and on the other hand, they are encouraged by news of successes in the development of vaccines and data on the restoration of business activity in those regions where the authorities have relaxed the quarantine. In addition, investors are counting on central banks and governments to provide additional support to businesses and consumers.

“The Fed is working tirelessly to overcome the economic damage caused by the coronavirus and put the economy back on track to meet our goals of maximum employment and price stability,” the President of the Federal Reserve Bank of New York and chairman of the Fed’s Open Market Committee John Williams said on Thursday. “I don’t think now is the time to think about exit strategies. We are still in a very difficult situation,” Williams said.

The meetings of the three largest world central banks (the Bank of Japan, the Bank of Canada and the ECB) held last week did not lead to a radical change in the mood of financial market participants.

The heads of these central banks spoke of the high risks to the global economy as a result of the the coronavirus pandemic and pledged to continue to stimulate and support the economy.

The dollar continued to decline last week, and gold went on to trade near the previously reached highs around 1818.00 dollars per ounce.

Gold is increasing despite the growth of stock indices, which is facilitated by both the soft policy of world central banks and the uncertainty about the strength of the upward trend in stock indices in the context of the ongoing trade conflict between the United States and China, as well as the further spread of the coronavirus. Last week, the number of people infected with coronavirus in the United States exceeded 3.737 million people.

Next week will not be heavily loaded with important macro statistics. However, investors will nevertheless pay attention to the publication of important macro data from Canada, Germany, the Eurozone, UK, as well as to the results of the meeting of the People’s Bank of China and its decision on the interest rate.

_ 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, July 19

23:50 JPY Bank of Japan Monetary Policy Committee meeting

At this meeting, the Monetary Policy Committee of the Bank of Japan will once again summarize the results of the last week’s meeting of the Bank, analyze the economic situation in Japan and give indications on possible future prospects for the Bank of Japan’s financial policy.

If the tone of the minutes of the meeting indicates the firmness of intentions of the Bank of Japan regarding monetary policy in the country, it will negatively affect the Japanese stock market and strengthen the yen. Conversely, soft rhetoric about the bank’s monetary policy prospects will help weaken the yen and boost the Japanese stock market.

Monday, June 20

**01:30 CNY Decision of the People’s Bank of China on the interest

rate**

Since May 2012, the People’s Bank of China has been steadily cutting interest rates to support Chinese manufacturers. The last time, the bank lowered the rate in April 2020 (by 0.20% to 3.85% at the moment).

In recent months, amid international trade conflicts and a slowdown in the global economy, the world’s largest central banks have been moving towards softening 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 became especially relevant in the last 2 years, when the confrontation between the two most powerful economies in the world began. One of the measures to neutralize the negative consequences of the increased duties on the import of Chinese goods into the United States was the depreciation of the national currency of China. Such a measure was intended, among other things, to maintain the same volumes of imports of Chinese products to the United States, which would cost American buyers less due to the difference in the rates of the national currencies of the United States and China.

Now, another strong negative factor has been added to this - the coronavirus pandemic.

Probably, 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, volatility may increase throughout the financial market. Investors will also be interested in the bank’s assessment of the consequences of the coronavirus for the Chinese economy and its policy in the near future in this regard.

Tuesday, July 21

01:30 AUD Minutes of the July meeting of the RB 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 rate of GDP growth, and also shows a hawkish attitude towards the inflationary forecast in the economy, the markets regard this as a higher probability of a rate hike at the next meeting, which is a positive factor for the AUD. The bank’s soft rhetoric regarding, above all, inflation puts pressure on the AUD.

At its July 7 meeting, the central bank kept 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 the level of 0.25%. The decision to lower the rate and set the current target for government bond yields was taken at the unscheduled RBA meeting on March 19 to support businesses and Australian citizens amid the rapid spread of the coronavirus pandemic. The country’s government was also forced to introduce a social distancing regime, suspend businesses and close borders to international traffic.

“Substantial uncertainty remains about the short-term outlook for the Australian economy,” RBA Governor Philip Lowe said after the bank meeting, adding that “the board will not raise rates until there is progress towards full employment and confidence that inflation will stabilize within 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 “some time will pass before interest rates rise.”

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

02:30 AUD Speech by the head of the RBA Philip Lowe

In his speech, Philip Lowe will assess the current situation in the Australian economy and point out further plans for the monetary policy of the agency. Any signals from him regarding a change in the plans of the RBA’s monetary policy will cause a sharp increase in volatility in the AUD trading and on the Australian stock market. If he does not touch on the topic of monetary policy, then the market reaction to his speech will be weak.

Market participants would also like to hear Lowe’s views on central bank policy amid the ongoing coronavirus pandemic and the first recession in Australia in 30 years.

In July, the RBA’s key interest rate was kept at a record low 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 yields was made at an unscheduled RBA meeting on March 19 in order to support business and Australian citizens amid the rapid spread of the coronavirus pandemic.

12:30 CAD Retail Sales Index

The 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 health of the retail sector in the near term. A rise in the index is usually positive for the CAD; a decrease in the indicator will negatively affect the CAD. The previous value of the index (in April) was +19.1% after falling by -9.9% in March. If the data for May turns out to be weaker than the previous value, the CAD may sharply decline in the short term.

Wednesday, July 22

12:30 CAD Consumer price indices in Canada

The Bank of Canada’s Core Consumer Price Index (Core CPI) reflects the dynamics of the retail prices of the corresponding basket of goods and services (excluding fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation, and tobacco products). The target inflation rate for the Bank of Canada is in the range of 1-3%. The rise in CPI is a harbinger of a rate hike and a positive factor for the CAD. Core CPI rose in May by +0.7% (in annual terms), and in April - by +1.2%. If the data for June turns out to be worse than the previous values, it will negatively affect the CAD. Better-than-expected data and above previous values ​​will strengthen the Canadian dollar.

Forecast for June: Consumer Price Index will come out with a value of -0.3% (in annual terms), Core CPI - with a value of +0.9%.

Thursday, July 23

Japan celebrates the National Ocean Day. The banks in this country will be closed, due to which the trading volumes during the Asian session will be reduced.

There is also no publication of important macro statistics, which can significantly affect the dynamics of the markets, on this day.

However, traders should pay attention to the publication at 12:30 of data on the number of new (initial) jobless claims in the US over the past week. The situation on the country’s labor market continues to deteriorate. 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. During the week of March 22-28, 6.9 million claims were filed, followed by 6.606 million claims, shocking observers and market participants. The similar indicator published last Thursday (for the week of July 5 - 10) came out with a value of 1.3 million claims.

Published in early May, the US Department of Labor data showed an increase in unemployment in the country to the level of 14.7%. Economists attribute this to the coronavirus, which has damaged the US economy. Many US companies have announced layoffs, and the authorities have ordered non-vital companies to close their offices and stores due to the coronavirus epidemic. The current weekly filing growth rate is well above the previous record high of 695,000 reached in October 1982. Then the number of initial claims filed in four weeks was 2.7 million.

This indicator (initial jobless claims) reflects the state of the labor market. The rise in value has a negative impact on consumption levels and economic growth. Under normal circumstances, a high value weakens the US dollar and a low score 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 of the US Department of Labor can be completely unpredictable.

Friday, July 24

Japan celebrates national Health and Sports Day. The banks in this country will be closed, due to with which the trading volumes during the Asian session will be reduced.

**07:30 EUR Markit Economics Manufacturing PMI (preliminary

release). Markit Economics Composite PMI (preliminary release)**

Germany’s manufacturing PMI is an important indicator of the business environment and the overall health of the German economy. This sector of the economy forms a significant part of Germany’s GDP. A result above 50 is seen as positive and strengthens the EUR, below 50 as negative for the euro. Forecast for July (preliminary release): 41.5.

Previous values: 45.2 in June, 36.6 in May, 34.5 in April, 45.4 in March, 48 in February, 45.3 in January, which indicates a prolonged slowdown in business activity in this sector of the German economy, as the value of the indicator is below 50. The growth of the indicator above the previous value may support the euro (in the short term), although its value is still below the value of 50. The data worse than the forecast will have a negative impact on the euro.

Composite PMI for the German economy is an important indicator of the business environment and the overall health 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 July (preliminary release): 44.2 vs. 47.0 in June, 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 specified 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 Markit Economics Composite Manufacturing PMI

(preliminary release)**

Eurozone’s Composite Manufacturing PMI is an important indicator of the health of the entire European economy. A result above 50 is seen as positive and strengthens the EUR, one below 50 as negative for the euro. Forecast for July (preliminary release): 59.0 (versus 48.5 in June, 31.9 in May, 13.6 in April, 29.7 in March, 51.6 in February, 51.3 in January) which is likely to have a positive effect on the euro. If the data turn out to be worse than the forecast, the euro may fall sharply in the short term.

08:30 GBP Markit Economics Services PMI (preliminary release)

UK’s Services PMI is an important indicator of the health of the UK economy. The services sector employs most of the UK’s working-age population and accounts for approximately 78% of GDP. Financial services remain the most important part of the service sector. If the data turns out to be worse than the forecast and the previous value, the pound is likely to drop sharply in the short term. The data better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is seen as positive and strengthens the GBP, one below 50 as negative for the GBP.

Previous values ​​of the indicator: 47.1 in June, 29.0 in May, 13.4 in April, 34.5 in March, 53.2 in February, 53.9 in January. Preliminary forecast for July: 47.0.

Price chart of EURUSD in real time mode

![Economic calendar for the week 20.07.2020 – 26.07.2020][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.

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