Economic calendar for the week 09.11.2020 - 15.11.2020

2020-11-08

Economic calendar for the week 09.11.2020 – 15.11.2020Jana Kane

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

next trading week (09.11.2020 – 15.11.2020)**

Trading on key Forex news: next week we are expecting the publication of important macro statistics from China, Great Britain, Germany, the US, as well as the results of the meeting of the central bank of New Zealand.

An extremely eventful week has ended. The US stock indices rose again, and despite the decline on Friday, the last week was the most successful period for them since April. In the United States, counting of votes continues, and Trump has promised to sue right up to the Supreme Court. Uncertainty around the US presidential election is likely to hold back the further growth of stock indexes for some time, which will give the dollar a respite after its strongest decline in the previous days.

At the same time, the number of cases of Covid-19 in the United States continues to grow, and difficulties may arise in the matter of approving additional stimulus measures.

These two factors, even if Biden wins, could slow the growth of stock indices and force investors to pay attention to the defensive dollar again.

Next week, investors will pay attention to the publication of important macro statistics from China, Great Britain, Germany, the United States, as well as the results of the meeting of the central bank of New Zealand.

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, November 9

10:35 GBP Speech by the Bank of England Governor Andrew Bailey

In his speech, Andrew Bailey, who took over as Governor of the Bank of England on March 16, 2020, replacing Mark Carney, will likely clarify the bank’s monetary policy decision last week. 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 without a trade deal.

Financial market participants will also expect him to clarify the situation regarding the further policy of the UK central bank. If Andrew Bailey gives any hints about tightening or easing of the Bank of England’s monetary policy in the near future, volatility will sharply increase in the quotes of the pound and the London Stock Exchange FTSE index during his speech. If he does not touch upon the issues of monetary policy, the reaction to his speech will be weak.

Tuesday, November 10

01:30 CNY Consumer Price Index (CPI)

The National Bureau of Statistics of China will release another monthly report reflecting the dynamics of consumer prices in China. Rising 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 positions 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 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 in 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 October: +0.3% (+1.8% in annual terms) against +0.2% (+1.7% in annual terms) in the previous month.

The rise in 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, the relative decline in CPI may negatively affect them.

**07:00 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 bonuses 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. Wages growth is positive for the GBP, while a low reading is negative. Forecast: November report suggests that average wages with bonuses increased over the last calculated 3 months (July-September) by +0.6% (against 0%, -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 +1.2% (against +0.8%, +0.2%, -0.2%, +0.7%, +1.7%, +2.7%, +2.9%, +3.1%, +3.2%, +3.4%, +3.5% in previous periods). Thus, the expected data is still below the average. 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. The data worse than the forecast will negatively affect the pound.

Also at this time, data on unemployment in the UK are published. It is expected that in the 3 months from July to September, unemployment was at 4.3% (against 4.5%, 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 steadily declined (from 8.0% in September 2012). This is a positive factor for the pound, while unemployment growth 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 in the pound quotes and on the London Stock Exchange is expected.

Wednesday, November 11

**01:00 NZD The Reserve Bank of New Zealand’s interest rate

decision. Accompanying statement**

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

“Global economic activity continues to weaken, reducing demand for goods and services from New Zealand. Increased uncertainty and contraction in international trade are contributing to a decline in economic growth in trading partner countries,” a recent statement from the RBNZ said.

The RBNZ believes that wage growth remains weak. At the same time, inflationary expectations are falling, 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 escalating international trade wars and a worsening global economic outlook, are forcing the Reserve Bank of New Zealand to keep interest rates low. An additional and unforeseen risk for the global and New Zealand economies is the global coronavirus epidemic.

It is expected that at this meeting, the RBNZ will not begin to reduce or raise the rate yet, but may speak in favor of lowering it in the coming months if the economic situation in the country and in the world worsens.

In an accompanying statement, the RBNZ management will provide an explanation of the decision on the interest rate and comments on the economic conditions that facilitated this decision.

At this time, the volatility in the quotations of the New Zealand dollar may rise sharply.

Earlier, the RBNZ stated that against the background of “many factors of uncertainty” monetary policy “will remain soft for the foreseeable future,” but “may be adjusted accordingly.” According to the bank’s management, for the stable recovery of the New Zealand economy and the growth of inflation, “a lower rate of the New Zealand dollar is necessary.”

Head of the RBNZ Adrian Orr is likely reaffirm the bank’s intention to pursue a soft monetary policy, which will lead to continued pressure on the New Zealand currency.

02:00 NZD Press conference of the RBNZ

During the press conference, head of the RBNZ Adrian Orr will give an explanation of the bank’s decision. His speeches often serve as an unofficial source of information on the future direction of the RBNZ’s monetary policy. In his opinion, the country’s monetary policy should correlate with the dynamics of employment and financial stability of the state.

Earlier, the RBNZ stated that against the background of “many factors of uncertainty” monetary policy “will remain soft for the foreseeable future,” but “may be adjusted accordingly.” For a stable recovery of the New Zealand economy and rising inflation, “a weaker NZ dollar is needed.”

It is likely that the head of the RBNZ Adrian Orr will reaffirm the bank’s intention to pursue a soft monetary policy, which will lead to continued pressure on the New Zealand currency.

In any case, volatility is expected to increase in the New Zealand dollar trade during the RBNZ press conference.

Thursday, November 12

07:00 GBP UK GDP in the 3rd quarter (preliminary release)

GDP is considered an indicator of the overall health of the British economy. The growing trend in GDP is considered positive for the GBP. The UK’s GDP was one of the highest in the world until 2016, when the Brexit referendum was held. Then its growth slowed down, and with the onset of the global coronavirus pandemic, the growth rate of British GDP completely moved into negative territory.

The UK’s annual GDP is forecast to decline by -20.5% in Q3 2020 (after zero in Q4 2019 and a decline of -19.8% in Q2 2020). Falling GDP is a negative factor for the GBP, and the situation seems to be getting worse.

The main factors that can force the Bank of England to keep rates low are weak GDP and labor market growth, as well as low consumer spending. If the GDP data coincide with the preliminary negative estimate of -20.5%, it will put downward pressure on the pound. Strong GDP report will strengthen the pound. But it can hardly be expected in the current situation.

**07:00 EUR Harmonized Index of Consumer Prices (HICP) in Germany

(final release)**

This index is published by the EU Statistical Office and is calculated based on a statistical method agreed upon among 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 September it decreased by -0.5%. Forecast for October: -0.4%. Since this is the second, final estimate, which is not much better than the first estimate, 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 worse than the forecast and the previous value will negatively affect the euro.

08:00 GBP Speech by the Bank of England Governor Andrew Bailey

In his speech, Andrew Bailey is likely to 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 without a trade deal.

Financial market participants will also expect him to clarify the situation regarding the further policy of the UK central bank. If Andrew Bailey gives any hints about tightening or easing of the Bank of England’s monetary policy in the near future, volatility during his speech will sharply increase in the quotes of the pound and the London Stock Exchange FTSE index. If he does not touch upon the issues of monetary policy, the reaction to his speech will be weak.

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

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 October: +0.2% and +1.8% (in annual terms), which indicates some improvement in the situation after the fall of the index in March and April. If October data turns out to be weaker than forecast, the dollar is likely to react with a short-term strong decline. Better-than- forecast data will strengthen the dollar.

Friday, November 13

09:00 EUR Eurozone GDP for the 3rd quarter (second estimate)

GDP is considered to be an indicator of the overall health of the Eurozone economy. A growing trend in GDP is considered positive for the EUR; a low result weakens the EUR.

Recently, macro data from the Eurozone have been showing a gradual recovery in the European economy after a sharp drop earlier this year. The decision made by the EU leaders in July on additional economic support (a package of expenditures for the recovery of the bloc’s economy in the amount of 1.8 trillion euros was approved) will help stabilize the economy of the Eurozone, which, as a result of quarantine restrictions, restraint in spending by companies and consumers, as well as the collapse of exports on the cusp of its deepest economic downturn since World War II.

The euro reacted positively to this decision. According to economists’ forecast, Eurozone GDP is expected to grow by +12.7% in the 3rd quarter (and a decrease by -4.3% in annual terms) after falling by -11.8% (-14.7% in annual terms) in Q2 and a decline of -3.6% (-3.1% YoY) in Q1 2020. This is significantly better than the preliminary forecast, which assumed that the Eurozone’s GDP in the 3rd quarter would fall by -14.1% (-16.9% in annual terms).

If the data turn out to be weaker than the preliminary estimate (+12.7% and a decrease of -4.3% in annual terms), the euro may fall. Data better than the first estimate may strengthen the euro in the short term, although there is still a long way to a full recovery of the European economy even to pre-crisis levels (quarterly growth within 0.2% - 0.4%).

**15:00 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, 81.8 in October. 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 November with a value of 82.0. 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.

16:00 GBP Speech by the Bank of England Governor Andrew Bailey