Economic calendar for the week 01.03.2021 - 07.03.2021

2021-02-28

Economic calendar for the week 01.03.2021 – 07.03.2021Jana Kane

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

next trading week (01.03.2021 – 07.03.2021)**

Trading on key Forex news: next week we are expecting the publication of important macro statistics from the US, Germany, Eurozone, Australia, the results of the meeting of the Central Bank of Australia, as well as the publication of monthly data from the American labor market.

American stock indices closed last week with a decline. Despite the continued optimism and persuasion from the Fed leaders, investors and stock indices seem to have decided to take a break before storming new record levels.

Supported by growing yields on US government bonds, the dollar rose last week despite extreme volatility caused by Jerome Powell’s statements (the DXY dollar index rose 0.5% over the past week).

The Fed Chairman Jerome Powell said in his speech in Congress that the central bank would continue to pursue soft policies until significant progress is made towards meeting its inflation and employment targets. In his opinion, it may take more than three years to achieve the target inflation rate of 2%, and during this time the Fed intends to maintain the parameters of the current monetary policy.

Powell’s statements indicate that he is not worried about rising government bond yields and heightened inflation expectations, and the central bank will allow inflation to even exceed the 2% target for a while before discussing policy tightening (annual inflation at the end of 2020 was 1.3%, staying below the Fed’s target for the eighth consecutive year).

Next week, financial market participants will pay attention to the publication of important macro statistics from the US, Germany, Eurozone, and Australia. However, their focus will be on the Australian central bank meeting, as well as the release on Friday of the monthly US labor market data, which is crucial (along with inflation and GDP data) for the Fed in making monetary policy decisions.

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, March 1

**13:00 EUR Harmonized Index of Consumer Prices (HICP) in Germany

(preliminary 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 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. Preliminary forecast for February: +1.6% (against +1.6% in January, -0.7% in December and negative values in the second half of 2020) in annual terms. 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.

15:00 USD Manufacturing PMI from ISM

ISM Manufacturing PMI is an important indicator of the health of the American economy as a whole. A result above 50 is seen as positive and strengthens the USD, one below 50 as negative for the US dollar. Forecast: 58.9 in February (against 58.7 in January, 60.7 in December). The index value is above the 50 level, which may support the dollar in the short term. The data above 50 indicates an acceleration of activity, which has a positive effect on the quotes of the national currency. If the indicator falls below the forecast and especially below the value of 50, the dollar may fall sharply.

16:10 EUR Speech by head of the ECB Christine Lagarde

During the speech of the head of the ECB Christine Lagarde, the volatility can increase 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. The soft tone of Christine Lagarde’s speech and the propensity 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.

Tuesday, March 2

**03:30 AUD RBA’s decision on interest rate. RBA’s accompanying

statement**

In March 2020, the RBA made 2 rate cuts, bringing it to the level of 0.25%, and launched a quantitative easing program. At the same time, the target level of yield for 3-year government bonds of Australia is set at 0.25%. The RBA has launched a program of lending to the banking system in the amount of at least A$ 90 billion and intends to buy bonds for A$ 5 billion.

In early November 2020, the RB of Australia lowered its key rate again, bringing it and the target level of 3-year bonds to 0.10% from 0.25% and announced a quantitative easing program in the amount of A$ 100 billion to support the economic recovery of the country.

“We live in extraordinary and difficult times,” said central bank governor Philip Lowe. In his opinion, “further stimulation is needed.” He stated this during a press conference on March 19, 2020, when the RBA lowered the interest rate during its unscheduled meeting.

The main negative factors for the Australian economy are weak wages growth, a weak labor market and a slowdown in growth. Annual inflation has remained below the RBA’s target range of 2-3% for four years.

Unemployment in the country remains above the 5% level for many years, unwilling to decline. Now the Australian economy is experiencing difficulties due to the coronavirus pandemic, which has hit the tourism and transport sectors.

It is expected that at this meeting the Central Bank of Australia will leave the rate at the current level of 0.1%, although unexpected decisions are possible.

In an accompanying statement, the RBA leaders will explain the reasons for the rate decision. If the RBA signals the possibility of further easing of monetary policy in the near future, the risks of a further fall in the Australian dollar will increase.

07:00 EUR Retail sales in Germany

Retail sales are the main consumer spending indicator in Germany showing changes in retail sales. A high result strengthens the euro, and vice versa, a low result weakens it. Forecast: -0.5% in January (+5% in annual terms) against -9.6% (+1.5% in annual terms) in December, +1.9% (+5.6% in annual terms ) in November.

The data indicate a new decline in the indicator due to new lockdowns due to the coronavirus. The data release is unlikely to have a positive impact on the euro. Better-than-expected data is likely to have a positive effect on the euro, but only in the short term.

**10:00 EUR Consumer Price Index. Core Consumer Price Index

(preliminary release)**

Consumer Price Index (CPI) is published by Eurostat and measures the price change of a selected basket of goods and services over a given period. The index is a key indicator for assessing inflation and changing purchasing habits. A positive result strengthens the EUR, a negative one weakens it. In October, November and December 2020, CPI fell by -0.3%, indicating low inflationary pressures and even slowing inflation. Forecast for February: +1.0% (annualized) against +0.9% in January. If the data turn out to be worse than forecast, the euro may fall sharply in the short term. The data better than the forecast and / or the previous value may strengthen the euro in the short-term, despite the low value (the target level of the ECB’s consumer inflation is just below 2.0%).

Core Consumer Price Index (Core 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 result strengthens the EUR, while a low result weakens it. In January 2021, Core CPI rose by +1.4% (YoY) after more modest values of +0.2% between September and December 2020. If the data for February turn out to be worse than the previous value or forecast, this may negatively affect the euro. If the data turn out to be better than the forecast or the previous value, the euro is likely to respond with an increase in quotations, but only in the short term. Inflation in the Eurozone remains low, which is a negative factor for the euro. Forecast for February: +1.1%.

13:30 CAD Canada GDP. Annual data

Canada’s GDP report is published by Statistics Canada. A strong report will strengthen the CAD. A weak GDP report will negatively affect the CAD. The previous report pointed to the growth of GDP in Canada by 0.7% in November.

Canada’s Quarterly GDP report reflects the total volume of all goods and services produced by Canada for the quarter (in annual terms) and is considered an indicator of the general health of the Canadian economy. In the previous (third) quarter, GDP grew by 40.5%. If the data for Q4 2020 turns out to be stronger, the CAD will strengthen.

Forecast: +0.4% in December and +47.6% in the 4th quarter. This is positive data for the CAD.

Wednesday, March 3

00:30 AUD Australia GDP (Q4)

Australian Bureau of Statistics report on the country’s GDP, which is the main indicator of the state of the Australian economy. Strong report will strengthen the AUD. A weak GDP report will negatively affect the AUD. Forecast: +2.5% (against + 3.3% in Q3, -7.0% in Q2, -0.3% in Q1 2020). The growth of the indicator is a positive factor for the AUD. If the data turns out to be worse than the forecast, the AUD will decline.

13:15 USD ADP National Employment Report

Typically, the ADP’s private sector employment report has a strong impact on the market and dollar quotes. An increase in the value of this indicator has a positive effect on the dollar. The growth in the number of workers in the private sector in the US is expected to be 168,000 in February (against an increase by 174,000 in January, a fall by -123,000 in December). The relative growth of the indicator may have a positive effect on the dollar quotes, while the relative decline in the indicator will have a negative effect. Therefore, the market reaction may be negative, and the dollar may decline if the data turns out to be worse than forecast.

Millions of Americans have previously been laid off due to the coronavirus pandemic and related quarantine measures. The bulk of layoffs were concentrated in tourism and retail. Other important sectors of the economy were also affected. ADP previously reported that the most significant drop in employment was in the construction and financial services sectors recently.

While the ADP report does not directly correlate with the official US Department of Labor data on the labor market, which will be released on Friday. However, the ADP report is often a harbinger of it, having a noticeable impact on the market.

15:00 USD Services PMI from ISM

This indicator assesses the state of the services sector in the US economy. These services sectors (as opposed to the manufacturing sector) have practically no impact on the country’s GDP.

In December this indicator came out with a value of 57.2, and in January 58.7. A result above 50 is seen as positive for the USD. However, a relative decline in the index could negatively affect the dollar in the short term. Forecast for February: 58.7, which is likely to positively affect the USD overall despite the relative decline.

Thursday, March 4

00:30 AUD Balance of trade. Retail Sales Index

This indicator (balance of trade) measures the ratio of the volume of exports and imports of Australia. Growth in exports from Australia leads to an increase in the trade surplus, which has a positive impact on the AUD. Previous value (December) A$ 6.785 Billion. A decrease in the trade surplus may negatively affect the Australian dollar. Conversely, a growing trade surplus is a positive factor for the AUD. Forecast: A$ 6.500 billion.

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. A rise in the index 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 +0.6%. If the data turns out to be weaker than the previous value, the AUD may sharply decline in the short term. If it’s above the previous values, the AUD is likely to strengthen. Forecast: +0.6% in January.

10:00 EUR Retail sales in the Eurozone

Retail sales is a major consumer spending indicator that shows the change in retail sales. A high result strengthens the euro, and vice versa, a low result weakens it. Forecast for January: -1.1% and -1.3% (YoY) vs. +2.0% (+0.6% YoY) in December, -6.1% (-2.9% in annual terms) in November, +1.5% (+4.3% in annual terms) in October. The data suggests that retail sales have yet to reach pre-coronavirus levels after a sharp drop in March-April 2020, when tough quarantine measures were in place in Europe.

17:05 USD Speech by the Fed Chairman Jerome Powell

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 strengthens the US dollar, while a more cautious stance is seen as negative for the USD.

If he makes unexpected statements, the volatility in trading in the financial markets may increase. Financial market participants will carefully study his speech in order to catch signals regarding the further actions of the Fed.

Friday, March 5

**13:30 USD Average hourly wages. Non-Farm Payrolls. Unemployment

rate**

The most important indicators of the state of the labor market in the United States in February. Forecast: +0.2% (against +0.2% in January, +0.8% in December, +0.3% in November) / +0.148 million (against +0.049 million in January, -0.140 million in December , +0.245 million in November, +0.638 million in October, +1.763 million in July and -20.687 million in April) / 6.4% (against 6.3% in January, 6.7% in December and November, 6.9% in October, 13.3% in May and 14.7% in April), respectively.

In general, the figures are not yet encouraging, but they are understandable due to mass layoffs in American companies and the closure of offices and stores due to the coronavirus. At the same time, the data show a gradual improvement in the American labor market after its collapse in previous months at the beginning of the year. Prior to the coronavirus, the US labor market remained strong, signaling the stability of the American economy and supporting the dollar.

It is often difficult to predict the market reaction to the publication of indicators. Many indicators for previous periods may be revised. Now it will be even more difficult to do this, because the economic situation in many other large economies is no better. In any case, when data from the US labor market is published, a surge in volatility is expected in trading not only in USD, but throughout the entire financial market. The most cautious investors might want to stay out of the market during this time.

Price chart of AUDUSD 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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