Economic calendar for the week 22.02.2021 - 28.02.2021

2021-02-21

Economic calendar for the week 22.02.2021 – 28.02.2021Jana Kane

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

next trading week (22.02.2021 – 28.02.2021)**

Trading on key Forex news: next week we expect the publication of important macro statistics from China, New Zealand, Australia, US, Germany, Great Britain, Switzerland, speeches of the heads of the central banks of Canada, the Eurozone, and the US, as well as the results of the meetings of the National Bank of China and the Reserve Bank of New Zealand.

Despite the growth on Friday, the American stock indexes ended the last week mostly with a decline. Despite the lingering optimism, investors and stock indices seem to have decided to take a break before storming new record levels. The dollar also declined last week, significantly yielding its positions primarily to major commodity currencies such as the Canadian, New Zealand and Australian dollars. The DXY dollar index improved over the past week by 0.2% after falling 0.6% in the previous week.

Positive macro data from the US released last week contribute to the strengthening of positive investor sentiment regarding the recovery of the US economy. The data indicate that US business activity continued to show strong growth in February amid a rebound in services and continued industrial output, while consumer retail spending rose in January and peaked in seven months thanks to stimulus payments. Some economists have improved their estimates of US Q1 GDP growth given projected fiscal stimulus and a resumption of normal economic activity amid the retreat of the pandemic.

Next week, financial market participants will pay attention to the publication of important macro statistics from China, New Zealand, Australia, US, Germany, Great Britain, Switzerland, speeches of the heads of the central banks of Canada, the Eurozone, and the US, as well as to the results of the meetings of the National Bank of China and the Reserve 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, February 22

**01:30 CNY Decision of the People’s Bank of China on the interest

rate**

Since May 2012, the People’s Bank of China has been steadily cutting interest rates in support of Chinese manufacturers. The last time in 2020 the bank cut the rate was in April (by 0.20% to 3.85% at the moment).

In 2020, amid international trade conflicts and a slowdown in the global economy, the world’s largest central banks took the path of easing 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 pandemic.

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.

However, if the People’s Bank of China makes unexpected statements or decisions, volatility may increase throughout the 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.

**After 09:00 (exact time unknown) GBP Speech by British Prime

Minister Boris Johnson**

Johnson is expected to announce new prospects for the country and its economy after Brexit in his speech on government plans. The main risks for the UK after Brexit are associated with expectations of a slowdown in the country’s economic growth, as well as with a large current account deficit in the UK balance of payments. Volatility in the pound quotes and in the British stock market may sharply increase if Johnson makes unexpected statements during his speech regarding the domestic and foreign policy of the UK, as well as the prospects for its economy.

13:45 EUR Speech by the ECB President Christine Lagarde

During the speech by the head of the ECB Christine Lagarde, the volatility increases not only in the euro and European stock indices, but 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. The 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 of the head of the ECB after the meetings of the bank 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 exchange rate by more than 3%. If Christine Lagarde does not touch upon the ECB’s monetary policy, the reaction to her speech will be weak.

21:45 NZD Retail Sales (Q4)

The Retail Sales Report is published by Statistics New Zealand. Changes in retail sales are generally considered an indicator of consumer spending. In general, a high value is a positive factor for the NZD, while a low reading is a negative factor. Q3 2020 retail sales grew +28% after falling -14.8% in Q2 and -1.2% in Q1 due to Covid quarantine restrictions -19. The NZD will strengthen if the data is better than previous values. A weak report will negatively affect the NZD. Forecast: +26.7%.

Tuesday, February 23

**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 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 value is negative. Forecast: The February report suggests that the average wages with bonuses increased over the last calculated 3 months (October-December) by +2.9% (against +3.6%, +2.7%, +1.3% , +0.1%, -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 +3.2% (against +3.6%, +2.8%, +1.9%, +0.9%, +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 close to the average values of the 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. 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 October to December, unemployment was at 5.1% (against 5.0%, 4.9%, 4.8%, 4.5%, 4.3%, 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, 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.

17:30 CAD Speech by the head of the Bank of Canada Tiff Macklem

The Canadian economy, as well as the entire global economy, slowed down in 2020 due to the coronavirus pandemic. Earlier, Tiff Macklem said that the Canadian economy is quite stable. However, the situation has changed rapidly, and not for the better. It will be interesting now to listen to Macklem’s opinion on the sustainability 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.

Probably, he can also provide some guidelines for investors on the eve of the next meeting of the Bank of Canada, which will be held on March 10.

Wednesday, February 24

**01:00 NZD RB of New Zealand’s decision on the interest rate.

Accompanying statement of the RBNZ. Monetary Policy Account**

After the bank’s management decided to cut the rate by 0.75% during an unscheduled meeting on March 15, the current interest rate of the Reserve Bank of New Zealand is at 0.25%. The bank’s management explained its decision by the 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 wages growth remains weak. At the same time, inflationary expectations are falling, and low levels of business confidence indicate a slowdown in hiring and wage growth.

Slower 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 deteriorating global economic outlook, are forcing the Reserve Bank of New Zealand to keep interest rates low. An additional and unforeseen risk to the global and New Zealand economies is the coronavirus epidemic.

It is expected that at this meeting, the RBNZ will not cut 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 the accompanying statement and comments, the RBNZ management will provide an explanation of the decision on the interest rate and comments on the economic conditions that facilitated the adoption of 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 a stable recovery of the New Zealand economy and inflation growth, “a lower rate of the New Zealand dollar is necessary.”

Probably, 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.

02:00 NZD Press conference of the RBNZ

During the press conference, the head of the RBNZ Adrian Orr will explain 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.

15:00 USD The Fed Chairman Jerome Powell’s speech in Congress

Powell’s comments could have an impact on both short-term and long-term USD trading if he revisits the Fed’s monetary policy. A more “hawkish” stance on the Fed’s monetary policy is seen as positive and strengthening the US dollar, while a more cautious position is seen as negative for the USD.

Recently, more and more statements have been made by the Fed leaders about the need to continue stimulating the economy badly affected by the coronavirus.

This time, the head of the Fed Jerome Powell will speak in Congress on economics and monetary policy.

If he makes unexpected statements, the volatility in trading in the financial markets may increase. Any hints by Powell about the need for soft policy will cause the dollar to fall and the American stock markets to grow.

Thus, participants in the financial market will carefully study his speech in order to catch signals from him regarding the further actions of the Fed.

Thursday, February 25

**13:30 USD Durable goods orders. Capital goods orders (ex defense

and aviation). US Annual GDP for 4th Quarter (second estimate)**

This indicator reflects the value of orders received by manufacturers of durable goods and capital goods (capital goods are durable commodities used to produce durable goods and services) involving large investments. Commodities produced in the defense and aviation sectors of the US economy are not included in this indicator. A strong result strengthens the USD. Previous values of the indicator “orders for durable goods”: +0.5% in December, +1.2% in November, +1.8% in October, -18.3% in April, -16.7% in March , +2.0% in February, -0.2% in January 2020.

Previous values of the indicator “orders for capital goods ex defense and aviation”: +0.7% in December, +1.0% in November, +1.9% in September, +2.1% in August, -6.6% in April, -1.3% in March, -0.6% in February, +0.9% in January 2020.

In theory, the relative growth of the indicator has a positive effect on the dollar; the market reaction to its negative value may be negative for the dollar in the short term. Data worse than the previous value will also negatively affect the dollar quotes.

Forecast for January: +1.1% (orders for durable goods), +0.4% (orders for capital goods ex defense and aviation).

It seems that the growth of indicators continues after their recovery in previous months from a strong fall in March and April 2020, which should have a positive effect on the dollar quotes. Better-than-expected data will also have a positive impact on the dollar.

GDP data is one of the key indicators (along with labor market and inflation data) for the Fed in terms of its monetary policy. Strong result strengthens US dollar; weak GDP report negatively affects the US dollar. In the previous 3rd quarter, GDP grew by +33.4% after falling by -31.4% in the 2nd quarter and by -5.0% in the 1st quarter of 2020.

If the data point to another decline in GDP in the 4th quarter, the dollar will be under pressure. The positive data on GDP will support the dollar and the American stock indices, although they are already mostly included in prices. The preliminary forecast for the 4th quarter of 2020 was +4.0%.

Friday, February 26

08:00 CHF Switzerland GDP for the 4th quarter

GDP is considered to be an indicator of the general state of a country’s economy and assesses the rate of its growth or decline. The Gross Domestic Product Statement expresses in monetary terms the aggregate value of all final goods and services produced by Switzerland over a given period of time. An upward trend in GDP is considered a positive factor for the national currency (franc), while a low result is considered negative (or bearish).

In the previous 3rd quarter of 2020, GDP grew by +7.2%, following a decrease of -7.0% in the 2nd quarter and a decrease of -2.5% in the 1st quarter of 2020. Switzerland’s gross domestic product and economy seem to be recovering after their fall in the first half of 2020, although this decline is no match for the decline in GDP in Germany, the Eurozone and the United States. Switzerland’s GDP is forecast to grow +0.1% in the 4th quarter of 2020 (but declined -2% on an annualized basis). The data indicate a slowdown in the recovery of the Swiss economy, which is a negative factor for the franc.

If the data turn out to be weaker than the forecast, the franc may decline in the short term. However, one should not expect a strong fall in the franc, as it is in active demand as a defensive asset. Better- than-forecast data may strengthen the franc 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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