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Economic calendar for the week 12.10.2020 - 18.10.2020

2020-10-11

2020-10-11

Economic calendar for the week 12.10.2020 – 18.10.2020Jana Kane

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

next trading week (12.10.2020 – 18.10.2020)**

Trading on key Forex news: next week we are expecting the publication of important macro statistics data from the UK, Germany, US, Australia, China, speeches of heads and key representatives of the central banks of the Eurozone, Great Britain, as well as the results of the debates of the US presidential candidates.

American stock indices are growing while the DXY dollar index, which reflects the value of the dollar against a basket of 6 major currencies, fell 0.8% (to 93.10) last week. This is the second consecutive week of the dollar index declining after its corrective rise from the 28-month low of 91.74 it reached in September. Investors reacted positively to news that negotiations on a package of fiscal support for the economy are still in progress. White House chief economic adviser Larry Kudlow also confirmed that President Trump has approved a revised fiscal aid package. Meanwhile, the final agreement between Democrats and Republicans on this issue has not yet been reached. Republicans are still in favor of $1.8 trillion in aid, while Democrats are pushing for $2.2 trillion. Stock indices are growing again, despite alarming news regarding the acceleration of the spread of coronavirus in the world. As of Friday, October 9, 36,945,712 cases of Covid-19 were recorded in the world, and over the previous day (October 8), the number of infected people increased by 284,888 people. This is an absolute record, and so far the infection curve is growing.

One way or another, the dollar ended last week in negative territory, while US stock indexes rose, which nevertheless speaks of positive investor sentiment.

Investors’ attention next week will be on the publication of important macro data from the UK, Germany, US, Australia, China, speeches by heads and key representatives of the central banks of the Eurozone, Great Britain, as well as the debates of the US presidential candidates.

Traders should pay attention to the publication of the following macro indicators:

*during the coming week, new events may be added to the calendar and / or some scheduled events may be canceled

****** GMT time

Monday, October 12

No publication of important macro statistics is planned, and it’s holidays in Canada and the US, so the trading volumes will be lower. However, traders should pay attention to the speech (at 11:00 GMT) by the head of the ECB Christine Lagarde and to the speech (at 16:00 GMT) by the head of the Bank of England Andrew Bailey. The market usually reacts strongly to the speeches of the head of the ECB, which follow immediately after the meeting of the ECB on monetary policy. At least this was the case under Mario Draghi. Other appearances by Mario Draghi elicited less market reaction. If Christine Lagarde makes unexpected statements regarding the latest ECB meeting and the bank’s monetary policy, it will again trigger a surge in volatility in the euro and European stock indices.

Participants in the financial markets are expecting the head of the Bank of England Andrew Bailey to clarify the situation regarding the further policy of the central bank of Great Britain. Volatility during his speech usually rises sharply in the quotes of the pound and the London stock exchange FTSE index if Andrew Bailey gives any hints of tightening or easing of the Bank of England’s monetary policy. It is likely that he will also touch on the state and prospects of the British economy, which has been badly affected by the coronavirus pandemic and is on the verge of Brexit, which can still happen according to the hard scenario.

If he does not touch upon the issues of monetary policy, the reaction to his speech will be weak.

The heads of the ECB and the Bank of England are likely to touch upon the Brexit issue. Brussels insists that the deal be concluded before the end of this month, so that there is time for its ratification by the end of this year. London, meanwhile, appears poised to secede from the European bloc without a trade deal, as British Prime Minister Boris Johnson has repeatedly stated.

Tusday, October 13

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

the last 3 months. Unemployment rate**

On a monthly basis, the UK Office for National Statistics (ONS) publishes a report on average earnings covering 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. Earnings growth is positive for the GBP, while a low result is negative. Forecast: the October report suggests that the average wages with bonuses decreased over the last calculated 3 months (June-August) by -0.4% (against -1.0%, -1.2%, -0.3 %, +1.0%, +2.4%, +2.8%, +3.1%, +2.9%, +3.2%, +3.2% in previous periods); without bonuses - increased by +0.6% (against +0.2%, -0.2%, +0.7%, +1.7%, +2.7%, +2.9%, +3.1%, +3.2%, +3.4%, +3.5% in previous periods). Thus, data is expected to be below the average values ​​of indicators. If the data turns out to be better than forecast, the pound is likely to strengthen in the foreign exchange market in the short term. Data worse than expected will negatively affect the pound.

Also at this time, the office publishes data on unemployment in the UK. In the 3 months from June to August, unemployment is expected to be at 4.1% (against 4.1%, 3.9%, 3.9%, 3.9%, 3.9%, 4.0%, 3.9% and 3.8% in previous periods). Since 2012, the UK unemployment rate has declined steadily (from 8.0% in September 2012). This is a positive factor for the pound, the rise in unemployment 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 the publication of data from the British labor market, an increase in volatility is expected in the 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 Statistics Office and is calculated on the basis of a statistical method agreed between all EU countries. It is an indicator for assessing inflation and is used by the Governing Council of the ECB to assess the level of price stability. A positive result strengthens the EUR, a negative one weakens it.

In May, the HICP index (in annual terms) increased by +0.5%, in June by +0.8%, in July - by 0%, and in August it decreased by -0.1%. Forecast for September: -0.4%. Since this is the second, final assessment, which coincides with the first assessment, the euro is unlikely to react strongly to the publication of this indicator. If the data turn out to be better than the forecast, the euro may strengthen in the short term. The growth of the indicator is a positive factor for the euro. The data suggests that inflationary pressures are still low in Germany. The data is worse than the forecast and the previous value will negatively affect the euro.

12:30 USD Consumer Price Index (ex food and energy)

Consumer Price Index (CPI) determines the change in prices of a selected basket of goods and services for a given period and is a key indicator for assessing inflation and changes in consumer preferences. Food and energy have been excluded from this indicator to provide a more accurate estimate. A high value strengthens the US dollar, while a low score weakens it. In January the value of the indicator was +0.2% (+2.3% in annual terms), in February +0.2% and +2.4% (in annual terms), in March -0.1% (+2.1% in annual terms), in April -0.4% (+1.4% in annual terms). Forecast for September: +0.2% and +1.6% (in annual terms), which indicates some improvement in the situation after the fall of the index in March and April. If September data turns out to be weaker than forecast, then the dollar is likely to respond with a short-term but strong decline. Better-than-forecast data will strengthen the dollar.

Wednesday, October 14

08:00 EUR Speech by the ECB President Christine Lagarde

During the speech of the head of the ECB Christine Lagarde, the volatility rises not only in the euro and European stock indices, but also throughout the financial market, especially if she touches on the topic of the ECB’s monetary policy. Any hints at curtailing the QE program in the Eurozone will cause the euro to rise. A soft tone of Christine Lagarde’s speech and the intention to continue the extra soft monetary policy of the ECB will negatively affect the euro.

Speeches by the head of the ECB after the bank’s meetings have a particularly strong influence on the market. In previous periods, the speech of the head of the ECB in similar situations could cause a change in the euro rate by more than 3%. If Christine Lagarde does not touch upon the topic of the ECB’s monetary policy, the reaction to her speech will be weak.

21:45 AUD Speech by the head of the RBA Philip Lowe

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

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

Earlier this month, the RBA’s key interest rate was kept at a record low of 0.25%, and the target level of 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 businesses and Australian citizens amid the rapid spread of the coronavirus pandemic.

In his opinion, “there are no serious arguments in favor of tightening monetary policy in the short term,” and “it will take some time before interest rates rise.”

Thursday, October 15

00:00 EUR European Council meeting (all day)

This meeting is attended by the heads of state and government of the countries of the European Council. The purpose of this meeting is, among other things, to discuss the current situation in the world and European economy. The meeting will last all day. After its completion, an official statement on the results of the meeting is published, which may have an impact on the European and world financial markets.

00:30 AUD Employment rate. Unemployment rate

Employment rate reflects the monthly change in the number of Australian citizens employed. The growth of the indicator has a positive impact on consumer spending, which stimulates economic growth. A high reading is positive for the AUD, while a low reading is negative. Forecast: in September, the number of employed Australian citizens fell by another -50,000 (after falling by 607,400 in April, by 264,100 in May and an increase by 111,000 in August).

Also at the same time, the Australian Bureau of Statistics will publish a report on the unemployment rate - an indicator that assesses the proportion of the unemployed population to the total number of able- bodied citizens. The growth of the indicator shows the weakness of the labor market, which leads to a weakening of the national economy. The decline in the indicator is a positive factor for the AUD. Forecast: unemployment in Australia in September was at 6.4% (against 6.8% in August, 7.5% in July, 7.4% in June, 5.2% in March, 5.1% in February). In general, the indicators are still not positive. However, in other large economies, the labor market has deteriorated on an even larger scale due to the coronavirus.

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

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

The AUD is unlikely to react positively to the publication of data from the country’s labor market. If the values ​​of the indicators turn out to be worse than forecast, the Australian dollar may significantly decline in the short term. Better-than-expected data will strengthen AUD in the short term.

01:30 CNY Consumer Price Index (CPI)

The National Bureau of Statistics of China will release the next monthly data reflecting the dynamics of consumer prices in China. The rise in consumer prices could trigger an acceleration in inflation, which could force the People’s Bank of China to take measures aimed at tightening fiscal policy. Increased growth in consumer inflation may cause appreciation of the yuan, a weak result will put pressure on the yuan.

China’s economy is the second largest in the world after America’s. Therefore, the publication of important macroeconomic indicators of this country has a noticeable 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 raw materials and a supplier of a wide range of finished products to the world commodity market.

In January 2020, the growth of the consumer inflation index amounted to +1.4% (+5.4% in annual terms), and in May - the value of the CPI index decreased to -0.8% (+2.4% in annual terms).

Deterioration of macroeconomic indicators, including a decrease in consumer inflation, may negatively affect the positions of the yuan, as well as commodity currencies such as the Canadian, Australian, and New Zealand dollars. To a greater extent, this applies to the Australian dollar, since China is Australia’s largest trade and economic partner.

According to the forecast, another acceleration in the growth rate of the consumer price index is expected in September: +0.4% (+2.4% in annual terms) against +0.4% (+2.4% in annual terms) in August after its sharp fall in the previous months.

The growth of the consumer inflation index will have a positive effect on the quotes of the yuan, as well as commodity currencies, primarily the Australian dollar. However, a relative decline in CPI may negatively affect them.

Friday, October 16

00:00 EUR European Council meeting (all day)

This meeting is attended by the heads of state and government of the countries of the European Council. The purpose of this meeting is, among other things, to discuss the current situation in the world and European economy. The meeting will last all day. After its completion, an official statement on the results of the meeting is published, which may have an impact on the European and world financial markets.

01:00 USD Presidential debates in the US

Financial market participants will follow this debate. Economists believe that under Biden, stronger fiscal stimulus measures can be expected, which will be highly relevant to economic recovery in the near term, while under Trump, the prospect of a long period of extremely low interest rates is more likely to support business activity over a longer period of time, and this is extremely important for buyers of high-yield and risky stock assets betting on the further growth of the American stock market.

At the same time, many economists agree that any outcome of the presidential election will be positive for the American stock market. The growth of stock indices, at the same time, will most likely be accompanied by a fall in the dollar.

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, excluding car dealerships. Changes in retail sales are the main indicator of consumer spending. The report is a leading indicator, and in the future, the data may be greatly 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, while an increase in the indicator will have a positive effect on the USD. In the previous month (August), the indicator increased by +0.6% (against a decline of -17.2% in April, -4.5% in March, -0.4% in February).

Retail sales is the main indicator of consumer spending in the United States, showing changes in retail sales. The Retail Control Group metric measures volume across 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 indicators is unlikely to accelerate the growth of the dollar. The data worse than the values ​​of the previous period (-0.1% in August, +1.4% in July, +5.6% in June, +11% in May, -15.3% in April, +1.7% in March, 0.0% in January and February) will negatively affect the dollar in the short term.

**14:00 USD University of Michigan Consumer Confidence Index

(Preliminary release)**

This indicator reflects the confidence of American consumers in the country’s economic development. A high level indicates economic growth, while a low level indicates stagnation. Previous indicator values: 99.8 in January, 101.1 in February, 89.1 in March, 71.8 in April, 72.3 in May, 78.1 in June, 72.5 in July, 74.1 in August, 80.4 in September. An increase in the indicator will strengthen the USD, while a decrease in the value will weaken the dollar. This indicator is expected to be released in October with a value of 81.0. There is still a weak trend towards a gradual recovery in the growth of the indicator. Data worse than the forecast may negatively affect the dollar in the short term.

Price chart of EURUSD in real time mode

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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