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Economic calendar for the week 17.08.2020 - 23.08.2020

August 16, 2020

August 16, 2020

Economic calendar for the week 17.08.2020 – 23.08.2020Jana Kane

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

next trading week (17.08.2020 – 23.08.2020)**

Trading on key Forex news: next week we expect the publication of important macro statistics from Japan, Great Britain, Canada, the US, Germany, the Eurozone, as well as the publication on Wednesday of the minutes of the July Fed meeting.

Gold prices fell, and US stock indexes ended the week in positive territory. At the same time, S&P500 came close to the record high of 3397.0 set in February this year.

There are still strong concerns among investors that the infection rate and deaths from coronavirus continue to rise in the United States, which is why some states are reintroducing quarantine restrictions in an attempt to contain the spread of the infection.

But investors are also guided by the Fed’s ultra-soft policy, which is “ready to adjust its instruments in order to help the economy if necessary,” and the continuing positive corporate reporting from US companies and positive macro statistics.

The data published last Thursday by the US Department of Labor showed that the recovery of the labor market in the country is gaining momentum. The number of initial jobless claims filed in the week of August 2-8 was 963,000. This is much less than the record in March, when about 7 million claims were filed, although higher than the previous record of 695,000 set before the pandemic began. The decrease in the number of claims suggests that the wave of layoffs has begun to decline, and the rate of hiring is growing, economists say.

The next week will not be full of important macro statistics. Nevertheless, investors will pay attention to the publication of important macro data from Japan, Great Britain, Canada, US, Germany, Eurozone, and their focus will be the publication on Wednesday of the minutes of the July Fed meeting.

_ 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, August 16

23:50 JPY Japan’s GDP for Q2 2020 (preliminary estimate)

GDP is considered an indicator of the general state of a country’s economy and estimates the rate of 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 over a certain period of time. An upward trend in GDP is considered a positive factor for the national currency (yen), while a low result is considered negative (or bearish).

In the previous 1st quarter of 2020, the country’s GDP contracted by -0.6% (-2.2% yoy) after falling by -1.8% (-7.1% yoy) in the 4th quarter 2019.

Japan’s GDP is expected to contract by -7.6% or -27.2% on an annualized basis in the second quarter of 2020.

The data point to a slowdown in the Japanese economy since the end of 2019, and quite a noticeable one, and this is a negative factor for the yen and the Japanese stock market.

If the data turns out to be even weaker, the yen may decline significantly in the short term. Better-than-forecast data may strengthen the yen (in the short term).

However, it should also be noted that in recent weeks, financial market participants pay little attention to news and weak macro statistics, abandoning defensive assets, including the yen, in favor of riskier and more profitable stock market assets.

Monday, August 17

No important macro statistics planned to be released.

Tuesday, August 18

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, GDP growth rates, and also shows a hawkish attitude towards the inflation 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 the August 4 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 yield level for 3-year government bonds was also left at the level of 0.25%. The decision to lower the rate and determine the current target level of government bond yields was made at the previous unscheduled RBA meeting on March 19 in order to support business 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,” the RBA head 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 in the target range 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 are increased.”

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

Wednesday, August 19

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 make up the British consumer basket. CPI is a key indicator of inflation. Its publication causes active movement of the pound in the foreign exchange market, as well as the London Stock Exchange FTSE100 index.

In the previous reporting month (June), the growth of consumer inflation (in annual terms) amounted to 0.6%.

Forecast for July: 0.7% (annualized). This value is unlikely to provide significant support to the pound. A value below the forecast could provoke a weakening of the pound, as low inflation will force the Bank of England to adhere to a soft monetary policy.

Core CPI is published by the Office for National Statistics and determines the change in prices for a selected basket of goods and services (excluding food and energy) for a given period. It is a key indicator for assessing inflation and changes in purchasing preferences. A positive result strengthens the GBP, a negative result weakens it.

In June, Core CPI (in annual terms) increased by +1.4%. The publication of the indicator is likely to have a positive effect on the pound if its value is higher than the forecast and the previous value. Forecast for July: +1.3% (YoY). The indicator reading below the forecast and previous values ​​may provoke a weakening of the pound.

12:30 CAD Consumer price indices in Canada

Core CPI from the Bank of Canada 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 Consumer Price Index rose in June by +1.1% (in annual terms), in May - by +0.7%, and in April - by +1.2%. If the data for July turns out to be worse than the previous values, it will negatively affect the CAD. Better-than-forecast data and above previous values ​​will strengthen the Canadian dollar.

Forecast for July: CPI will come out with a value of +0.3% (in annual terms).

**18:00 USD Minutes of the last meeting of the Federal Open Market

Committee (FOMC minutes)**

The publication of the minutes is extremely important for determining the course of the current Fed’s policy and the prospects for interest rate raises in the United States. The volatility of trading in financial markets during the publication of the minutes usually increases, since the text often contains either changes or clarifying details regarding the results of the last FOMC Fed meeting.

Recently, more and more statements from the Fed leaders can be heard indicating the Fed’s inclination to continue its policy of supporting the American economy, which has been badly hurt by the coronavirus.

Following a regular meeting held in late July, the Fed left interest rates unchanged and reaffirmed its intention to support the American economy amid the coronavirus pandemic. The US Federal Reserve Chairman Jerome Powell said the central bank will use all of its tools for “as long as necessary” to ensure the strongest possible economic recovery and limit long-term economic damage. Head of the Fed noted the extremely uncertain economic outlook for the United States, expressing concern that the increase in the number of cases of coronavirus infection is negatively affecting business activity in the country.

A soft tone of the minutes will have a positive effect on stock indices and negatively on the US dollar. Tough rhetoric of the Fed leaders regarding the prospects for monetary policy will push the dollar to further growth.

Thursday, August 20

No important macro statistics planned to be released.

Friday, August 21

**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, one below 50 as negative for the euro. Forecast for August (preliminary release): 52.5.

Previous values: 51.0 in July, 45.2 in June, 36.6 in May, 34.5 in April, 45.4 in March, 48 in February, 45.3 in January, indicating a prolonged slowdown in business activity in this sector of the German economy, since the average value of the indicator is below 50. The growth of the indicator above the previous value and the value of 50 possibly will support the euro (in the short term). The 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 the overall health of the German economy. A result above 50 is seen as positive and strengthens the EUR, one below 50 as negative for the euro. Forecast for August (preliminary release): 50.3 against 55.3 in July, 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 expected value is likely to support the euro in the short term. 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 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 August (preliminary release): 54.7 (against 54.9 in July, 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 turns out to be worse than the forecast and the value of 50, the euro may drop 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. The most important part of the service sector continues to be financial services. If the data turn out to be worse than the forecast and the previous value, then 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 considered positive and strengthens the GBP, one below 50 - as negative for the GBP.

Previous values ​​of the indicator: 56.5 in July, 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 August: 57.0.

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 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 May) was +24.5% after falling in March by -9.9% and rising in April by +19.1%. If the June data turns out to be weaker than the previous value, the CAD may decline in the short term.

Price chart of EURUSD in real time mode

![Economic calendar for the week 17.08.2020 – 23.08.2020][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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