Economic calendar for the week 15.02.2021 - 21.02.2021

2021-02-14

Economic calendar for the week 15.02.2021 – 21.02.2021Jana Kane

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

next trading week (15.02.2021 – 21.02.2021)**

Trading on key Forex news: next week we are expecting the publication of important macro statistics from Australia, Eurozone, US, Germany, Great Britain, and Canada.

After an impressive growth in the first week of the month, last week the American stock indices managed to increase their growth, if only slightly. But the US dollar fell last week. The DXY dollar index lost 1% and all the gains of the previous week.

Last Wednesday, the Federal Reserve Chairman Jerome Powell signaled that monetary stimulus would continue for a long time and hinted that monetary policy could be even softer than investors expect. According to him, the Fed in the near future is unlikely to “even think about curtailing support” by raising rates or reducing bond purchases.

Stock indices continue to receive support from aggressive stimulus policies from the Fed and the US government. At the same time, Powell’s comments confirm the opinion of the majority of financial market participants that it is too early for a sustainable dollar recovery on expectations of monetary policy tightening, despite the growth in the US government bond yields. Concerns about the US debt burden and the size of the current account deficit of the balance of payments will also have a negative impact on the dollar in the medium term, economists say.

Next week, China will continue to celebrate the Chinese New Year, and therefore trading volumes during the Asian session in the first half of next week will be reduced. The activity of traders on Monday will also be affected by the celebration of the Presidents’ Day in the United States. American banks and stock exchanges will be closed on this day.

Nevertheless, next week financial market participants will pay attention to the publication of important macro statistics from Australia, Eurozone, US, Germany, 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, February 15

Presidents’ Day in the United States. American banks and exchanges are closed, and the volume of trades on the financial market during the American trading session will be insignificant. No important macro statistics are scheduled to be released.

Tuesday, February 16

**00:30 AUD Minutes of the February 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, 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 mild rhetoric regarding, above all, inflation puts pressure on the AUD.

At a meeting in early February, the central bank kept its key rate and target yield on 3-year government bonds at 0.10%, but unexpectedly announced an extension of its government bond purchase program, which was due to end in April, signaling its intention to support the economy emerging from recession. This decision put strong pressure on the Australian dollar, although it subsequently recovered and re-entered the levels of 3 years ago and approached the highs of March 2020.

The RBA Governor Philip Lowe said the economic recovery “is going well and stronger than expected.” Lowe previously said that “the economic recovery will be uneven and unstable,” and “unemployment may remain high for a long time,” promising that “the rate will not be raised until the Central Bank sees progress in moving towards full employment and stable inflation in the range of 2% -3% ”. According to RBA Governor Philip Lowe, there are still “no serious arguments in favor of tightening monetary policy in the short term,” and “some time will pass before interest rates are raised.”

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

10:00 EUR Eurozone GDP for the 4th quarter (second estimate)

GDP is considered to be an indicator of the overall health of the 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 indicating a gradual recovery in the growth rate of the European economy after a sharp drop in early 2020. However, the decision made by the EU leaders in July to provide additional economic support (a package of expenditures for the economic recovery of the bloc of 1.8 trillion euros was approved) will help stabilize the economy of the Eurozone. As a result of quarantine restrictions, restraint in spending by companies and consumers, as well as the collapse of exports the Eurozone is on the cusp of the deepest economic downturn since World War II.

The euro reacted positively to this decision.

However, economists forecast that Eurozone GDP is expected to drop 0.7% in Q4 2020 (down 5.1% on an annualized basis) after rising 12.5% (down 4.3% in annual terms) in the 3rd quarter, falling by -11.8% (-14.7% in annual terms) in the second quarter and falling by -3.6% (-3.1% in annual terms) in the 1st quarter of 2020.

If the data turn out to be weaker than the preliminary estimate (-0.7% and a decline of -5.1% 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%).

Wednesday, February 17

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. CPI is a key indicator of inflation. Its publication causes active movement of the pound in the foreign exchange market, as well as of the FTSE100 index of the London stock exchange.

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

Forecast for January: +0.5% (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 one weakens it.

In September, Core CPI (in annual terms) increased by +1.3%, in October - by +1.5%, in December - 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 January: +1.3% (annualized). The indicator reading below the forecast and previous values may provoke a weakening of the pound.

13:30 USD Retail sales. Retail control group

This report (Retail Sales) reflects the total sales of retailers of all sizes and types. 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 (December), the indicator decreased by -0.7%, which is understandable against the background of the introduction of strict quarantine restrictive measures in a number of states. Forecast for January: +0.7%.

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 is worse than the values of the previous period (-1.9% in December, -0.5% in November, +0.1% in October, +0.9% in September, -0.3% in August) may negatively affect dollar in the short run. Forecast for January: +1.0%.

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 increased in December 2020 by +0.7%, in November by +1.5%, in October and September by +1.0% (in annual terms). If the data for January turns out to be worse than the previous values, it will negatively affect the CAD. The data better than the previous values will strengthen the Canadian dollar.

**19:00 USD Minutes of the January meeting of the Federal Open

Market Committee (“FOMC minutes”)**

The Fed usually releases the FOMC minutes two or three weeks after the day the interest rate decision is made.

The publication of the minutes is extremely important for determining the course of the current Fed policy and the prospects for raising interest rates 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 often one can hear statements from the Fed leaders indicating the Fed’s inclination to continue the extra-soft stimulating policy.

“Economic activity continued to recover, but the pace of improvement has slowed,” head of the Fed Jerome Powell said at a press conference after a recent Fed meeting, urging the government to tighten its fiscal stimulus.

The soft tone of the minutes will have a positive effect on stock indices and negatively on the US dollar. The tough rhetoric of the Fed leaders regarding the prospects for monetary policy will push the dollar up.

It is possible that the minutes might contain some information regarding the plans of action of the Fed leader at the meeting on March 16-17.

Thursday, February 18 Февраля

00:30 AUD Employment rate. Unemployment rate

The 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 value is positive for the AUD, while a low one is negative. Forecast: in January, the number of employed Australian citizens increased by another 50,000 (after falling by 607,400 in April, by 264,100 in May and an increase by 90,000 in November, 50,000 in December 2020).

Also at the same time, the Australian Bureau of Statistics will publish a report on the unemployment rate - the indicator that assesses 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 January was at 6.5% (against 6.6% in December, 6.8% in November, 7.0% in October, 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 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 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 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, then the Australian dollar may significantly decline in the short term. Better-than-expected data will strengthen AUD in the short term.

12:30 EUR Account of the ECB monetary policy meeting

This document provides an overview of the current ECB policy with planned changes in the financial and monetary areas. The publication of this document may cause a surge in volatility in trading in the euro and in the European stock market.

Investors will carefully study the text of the minutes of the January ECB meeting to pick up additional signals regarding the QE program and the prospects for monetary policy. Recently, weak macro data from the Eurozone have been indicating a slowdown in the European economy, which, against the background of international trade conflicts, puts pressure on the ECB towards further easing of monetary policy.

Volatility in euro trading could rise sharply if the minutes contain unexpected statements or new information regarding the outlook for monetary policy.

Friday, February 19

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 December) was -4.1% after falling by -17.7% in April. If the data for January turns out to be weaker than the previous value, the AUD may sharply decline in the short term. If the data turns out to be better than the previous values, the AUD is likely to strengthen. Forecast: +2.0%.

**08:30 EUR Germany’s Manufacturing PMI by Markit Economics

(preliminary release). Composite PMI by Markit Economics (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 February (preliminary release): 56.5.

Previous values of 57.1 in January, 58.3 in December 2020, 57.8 in November, 58.2 in October against 34.5 in April, 45.4 in March, 48 in February, 45.3 in January indicate the acceleration of business activity in this sector of the German economy after its slowdown in early 2020. The growth of the indicator above 50 and the previous value is likely to support the euro (in the short term). The data worse than forecast and especially below 50 will have a negative impact on the euro.

Composite PMI is an important indicator of the business environment and the overall health of the German economy. A result above 50 is considered positive and strengthens the EUR, one below 50 - as negative for the euro. Forecast for February (preliminary release): 50.3 against 50.8 in January, 52.0 in December 2020, 51.2 in November, 55 in October against 17.4 in April, 35 in March, 50.7 in February, indicating that the German economy is continuing to recover from its fall in early 2020, albeit at a slower pace. The publication of this indicator with the specified expected value is likely to 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.

09:00 EUR **Composite Manufacturing PMI by Markit Economics

(preliminary release)**

The Eurozone Manufacturing PMI is an important indicator of the health of the entire European economy. A result above 50 is considered positive and strengthens the EUR, one below 50 - as negative for the euro. Forecast for February (preliminary release): 48.1 against 47.8 in January, 49.1 in December 2020, 45.3 in November, 50.0 in October against 13.6 in April, 29.7 in March , 51.6 in February, 51.3 in January, which is unlikely to have a positive effect on the euro even despite the relative growth of the indicator. If the data turns out to be worse than forecast, the euro may fall sharply in the short term.

**09:30 GBP UK Services PMI by Markit Economics (preliminary

release)**

The UK Services PMI is an important indicator of the health of the UK economy. The service sector employs most of the UK’s working-age population and accounts for approximately 78% of GDP. Financial services are still the most important part of the service industry. If the data turns 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, the result above 50 is considered positive and strengthens the GBP, below 50 - as negative for the GBP.

Previous values of the indicator: 39.5 in January, 49.4 in December 2020, 47.6 in November, 51.4 in October, after falling to 29.0 in May, 13.4 in April, 34.5 in March. Preliminary forecast for February: 40.5.

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 (for November) +1.3% after falling in March by -9.9%, in April - by -25% and growth in May by +18.7% in 2020. If the data for December turns out to be weaker than the forecast, the CAD may decline in the short term. Forecast: +0.1%.

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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