Economic calendar for the week 16.11.2020 - 22.11.2020

2020-11-15

Economic calendar for the week 16.11.2020 – 22.11.2020Jana Kane

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

next trading week (16.11.2020 – 22.11.2020)**

Trading on key Forex news: next week we are expecting the publication of important macro statistics from China, the US, Great Britain, Canada, Australia, as well as statements by the heads of the central banks of Australia, Great Britain, and Canada.

Following an extremely turbulent and volatile week, the dollar index, which reflects the value of the dollar against a basket of 6 major currencies, went up. But the main US stock indexes ended the week in different directions. While the S&P 500 and DJIA rallied, the Nasdaq100 declined last week because the investor sentiment shifted as news emerged regarding a coronavirus vaccine and the likelihood of an unexpected US election outcome. Trump did not admit defeat and announced his intention to sue regarding the counting of votes, since, in his opinion, there were numerous violations by Democrats in the elections. At the same time, the Speaker of the House of Representatives of the US Congress Nancy Pelosi pointed to the lack of any progress in negotiations with the White House on a new stimulus package for the American economy affected by the novel coronavirus pandemic. The dollar, which is in demand as a defensive asset, strengthened again against the yen and the euro, while gold fell in price, having lost more than $60 per ounce over the week.

Next week, investors will pay attention to the publication of important macro statistics from China, the US, the UK, Canada, Australia, as well as to the speeches of the heads of the central banks of Australia, Great Britain and Canada.

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 16

02:00 CNY Retail Sales Index

This index is published monthly by the National Bureau of Statistics of China and measures total retail sales and cash receipts. The index is often considered an indicator of consumer confidence and economic well- being and reflects the health of the retail sector in the near term. A rise in the index is usually positive for the CNY; a decrease in the indicator will negatively affect the CNY. The previous value of the index (in annual terms) was +3.3% (after an increase of +8% in the last months of 2019 and a fall of -20.5% in February 2020). Forecast: In October, retail sales rose in China by +5.0% (on an annualized basis), which indicates an intensifying recovery after a strong fall in February-March this year. If the data turns out to be even better, the CNY will strengthen even more.

08:40 AUD Speech by 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 his 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.

During its regular meeting in early November, the RB of Australia lowered its interest rate and expanded its stimulus program for the Australian economy (the bank lowered its key rate and target yield on 3-year bonds to 0.10% from 0.25% and announced a quantitative easing program in the amount of 100 billion Australian dollars).

The RBA head Philip Lowe said the bank found it necessary to further bolster demand and accelerate recovery in the pandemic-hit labor market.

Lowe is likely to once again sum up the results of the last RBA meeting and announce the bank’s future plans.

If he does not touch on the topic of monetary policy, the market reaction to his speech will be weak.

Tuesday, November 17

**00:30 AUD Minutes of the November meeting of the Reserve Bank 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 meeting in early November, the central bank lowered its key rate and target for 3-year bonds to 0.10% from 0.25% and announced A$ 100 billion in quantitative easing to support the Australian economy amid a sharp slowdown.

“The economic recovery will be uneven and unstable,” and “unemployment may remain high for a long time,” said the leaders of the RBA after one of the last meetings of the bank, promising that “the rate will not rise until the Central Bank sees progress in moving towards full employment and stable inflation rates in the 2-3% range”.

According to RBA head Philip Lowe, “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.

13:30 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 (September), the indicator increased by +1.5% (against a decline of -17.2% in April, -4.5% in March, -0.4% in February). Forecast for October: +0.6%.

Retail sales is the leading 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 (+1.4% in September, -0.1% in August, +1.4% in July) may negatively affect the dollar in the short term.

Forecast for October: +0.5%.

14:00 **GBP Speech by head of the Bank of England Andrew

Bailey**

In his speech, Andrew Bailey will probably touch upon 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 deal.

Participants of financial markets will also expect him to clarify the situation regarding the further policy of the central bank of Great Britain. If Andrew Bailey gives any hints about tightening or easing of the Bank of England’s monetary policy in the near future, then 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.

19:00 CAD Speech by head of the Bank of Canada Tiff Macklem

Tiff Macklem succeeded Stephen Poloz as Governor of the Bank of Canada, becoming Chairman on June 3, 2020. Macklem faces essentially the same tasks as his predecessor on this post.

The Canadian economy, as well as the entire global economy, is showing signs of a slowdown in the first half of this year, driven by the downturn in business due to the coronavirus pandemic. Earlier this year, Stephen Poloz said that the Canadian economy is robust enough to keep rates unchanged despite the worsening global economy. However, the situation is changing rapidly, and not for the better. It will be interesting now to listen to Maclem’s opinion on the stability of the Canadian economy and the monetary policy of the central bank.

If Tiff Macklem touches on the topic of the monetary policy of the Bank of Canada, the volatility in the quotes of the Canadian dollar will rise sharply. His tough tone will help strengthen the Canadian dollar. The soft rhetoric of Macklem’s speech and the intention to pursue soft monetary policy will negatively affect the CAD quotes.

He may also provide some guidelines for investors on the eve of the next meeting of the Bank of Canada, which will be held on December 9.

22:00 AUD Speech by head of the RBA Philip Lowe

Lowe is likely to once again sum up the results of the last RBA meeting and announce the bank’s future plans.

If he does not touch on the topic of monetary policy, the market reaction to his speech will be weak.

Wednesday, November 18

07:00 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. The CPI is a key indicator of inflation. Its publication will cause active movement of the pound in the foreign exchange market, as well as the London Stock Exchange FTSE100 index.

In the previous reporting month (September), the growth in consumer inflation (in annual terms) amounted to +0.5%.

Outlook for October: +0.6% (annualized). This value is unlikely to provide significant support to the pound. Indicator 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 price change of 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 September, Core CPI (on an annualized basis) increased by +1.3%. 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 October: +1.3% (annualized). The indicator value below the forecast and previous values may provoke a weakening of the pound.

13:30 CAD Consumer Price Indices in Canada

Core Consumer Price Index (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 inflation target 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 September by +1.0% (in annual terms). If the October data 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 October: Core CPI will come out with a value of +0.9% (in annual terms).

Thursday, November 19

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 October, the number of employed Australian citizens fell by another -30,000 (after falling in April by 607,400, in May by 264,100 and by 29,500 in September).

Also at the same time, the Australian Bureau of Statistics will publish a report on the unemployment rate - an indicator that estimates the ratio of the unemployed population to the total number of able-bodied citizens. The growth of the indicator indicates 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 October was at 7.2% (against 6.9% in September, 6.8% in August, 7.5% in July, 7.4% in June, 5.2% in March , 5.1% in February). In general, the indicators cannot be described as positive yet. 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 expenditures, the growth of workers’ wages, as well as the state of the country’s labor market.

In November 2020, the RB of Australia cut its key interest rate by another 0.15%, to a new all-time low of 0.1%, due to the coronavirus. 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 on 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, then the Australian dollar may significantly decline in the short term. Better-than-expected data will strengthen AUD in the short term.

Friday, November 20

00:30 AUD Retail Sales Index

Retail Sales Index is published monthly by the Australian Bureau of Statistics and measures 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. Index growth is usually positive for the AUD; a decrease in the indicator will negatively affect the AUD. The previous value of the index (for September) was -1.1% after falling by -17.7% in April. If the data for October turns out to be weaker than the previous value, the AUD may sharply decline in the short term.

**01:30 CNY The People’s Bank of China’s decision 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 cut 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. This 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.

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.

Nevertheless, if the People’s Bank of China makes unexpected statements or decisions, then volatility may increase in the entire 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.

13:30 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 August) was +0.4% after falling in March by -9.9%, in April - by -25% and growth in May by +18.7%. If the data for September 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

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:

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

Posts