Economic calendar for the week 08.03.2021 - 14.03.2021

2021-03-07

Economic calendar for the week 08.03.2021 – 14.03.2021Jana Kane

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

next trading week (08.03.2021 – 14.03.2021)**

Trading on key Forex news: next week we are expecting the publication of important macro statistics from Japan, the US, Germany, the Eurozone, Canada, China, as well as the results of the meetings of the central banks of Canada and the Eurozone.

The sales of US government bonds continue, which contributes to the growth of their yield, the decline in the US stock market and the strengthening of the dollar.

Nevertheless, the major US stock indexes finished the past week in different directions. While the industrial DJIA rose, the high-tech NASDAQ fell, and the S&P 500 ended last week with a minimal gain only thanks to a positive report on the US labor market, which exceeded expectations. As the US Department of Labor reported on Friday, non- farm jobs rose 379,000 in February, while unemployment fell to 6.2% from 6.3% in January, beating forecasts of 210,000 and 6.3%, respectively.

Based on historical data, it will take about two years before the Fed returns to the issue of tightening monetary policy. According to the Federal Reserve Bank of St. Louis, full employment is characterized by an unemployment rate of 4.4%.

And yet, the dollar rose last week (+1.3%) for the second week in a row, receiving support from the growing yields of American bonds.

Probably, the dollar will continue to strengthen next week if the situation on the US government bond market does not change. The Federal Reserve Chairman Jerome Powell, speaking on Thursday, said the Fed was monitoring the rise in the US Treasury yields, but he did not give any signals about any possible intervention from their side.

Next week, financial market participants will pay attention to the publication of important macro statistics from Japan, the US, Germany, Eurozone, Canada, and China. However, their focus will be on the meetings of the central banks of Canada and the Eurozone.

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 8

**10:00 GBP Speech by the head of the Bank of England Andrew

Bailey**

In his speech, Andrew Bailey will likely touch on the state and prospects of the British economy after Brexit, which has been badly hit by the coronavirus pandemic.

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 of tightening or easing of the Bank of England’s monetary policy in the near future, volatility during his speech will sharply increase in the pound and the London Stock Exchange FTSE index. If he still does not touch upon the issues of monetary policy, the reaction to his speech will be weak.

As you know, at last month’s meeting, the Bank of England decided to leave interest rates and the size of the asset acquisition program unchanged at 0.10% and 895 billion pounds, respectively, and presented an optimistic economic outlook. Bank executives were also skeptical about the imposition of negative interest rates, prompting a sharp appreciation of the pound.

23:50 JPY Japan GDP Q4 2020 (final estimate)

GDP is considered an indicator of the general state of a country’s economy and estimates the rate of its growth or decline. The report on gross domestic product published by the Cabinet of Ministers of Japan expresses in monetary terms the aggregate value of all final goods and services produced by Japan over a certain period of time. An upward trend in GDP is considered a positive factor for the national currency (yen), while a low result is considered negative (or bearish).

In the previous 3rd quarter of 2020, the country’s GDP grew by +3.0% (+12.7% on an annualized basis) after falling in the first half of 2020. The preliminary estimate expected GDP growth in the 4th quarter of 2020 by +3.0% or +12.7% in annual terms.

The data points to continued recovery in Japan’s economy after the decline caused by the coronavirus pandemic.

If the data turns out to be weaker, the yen may strengthen against the background of the fall in the Japanese stock market in the short term. Better-than-expected data is likely to help the Japanese stock market rally. However, it should also be noted that in recent weeks, financial market participants pay little attention to news and weak macro statistics, abandoning defensive assets, including the yen, in favor of more risky and profitable stock market assets.

Tuesday, March 9

10:00 EUR Eurozone GDP Q4 2020 (final estimate)

GDP is considered to be an indicator of the overall health of the economy. The upward trend in GDP is considered positive for the EUR; a poor 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 support to the economy (a package of of 1.8 trillion euros for the economic recovery of the bloc was approved) will help stabilize the economy of the Eurozone, which is on the cusp of the deepest economic downturn since World War II as a result of quarantine restrictions, restraint in spending by companies and consumers, as well as the collapse of exports.

The euro reacted positively to this decision.

However, according to economists’ forecast, Eurozone GDP is expected to fall by -0.6% in the 4th quarter of 2020 (down -5.0% 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 (-0.6% and a decline of -5.0% in annual terms), the euro may fall. Data better than the first estimate may strengthen the euro in the short term, although it is still far from the full recovery of the European economy even to pre-crisis levels (quarterly growth within 0.2% - 0.4%).

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

In his speech, Philip Lowe will assess the current situation in the Australian economy and probably lay out further plans for the monetary policy of the department. 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 and on the Australian stock market. If he does not touch on the topic of monetary policy, the market reaction to his speech will be weak.

Market participants would also like to hear Lowe’s views on central bank policy amid the ongoing coronavirus pandemic and Australia’s first recession in 30 years.

In early November, the RBA’s key interest rate was cut to a record level of 0.1%, and the target level of yield on 3-year government bonds was also lowered to 0.1%. The decision to lower the rate and set the current target for government bond yields was made to support businesses and Australian citizens amid the rapid spread of the coronavirus pandemic.

According to Lowe, “there are no serious arguments in favor of tightening monetary policy in the short term,” and “it will be some time before interest rates rise.”

Wednesday, March 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, according to various estimates, is already the largest in the world, pushing the US economy into second place. Therefore, the publication of important macroeconomic indicators of this country has a significant 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 a 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 CPI decreased to -0.8% (+2.4% in annual terms).

Deterioration of 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, Consumer Price Index is expected to grow by +0.4% in February, but decrease by -0.4% in annual terms against +1.0% (-0.3%), +0.7% (+0.2%), -0.6% (-0.5%), -0.3% (-2.1%) and +0.2% (+1.7% in annual terms) in previous months.

The growth of the consumer price index will positively affect the quotes of the yuan, as well as commodity currencies, primarily the Australian dollar. However, a relative decline in CPI may negatively affect them.

12:30 USD Consumer price index (ex food and energy)

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 score strengthens the US dollar, while a low score weakens it. In December 2020, the value of the indicator was +0.1% (+1.6% in annual terms, and in January 0% and +1.4%, respectively. Forecast for February: +0.2% and +1.4 % (on an annualized basis), which indicates some improvement in the situation after the index fell in March and April 2020 amid the coronavirus pandemic. If the data for February turns out to be weaker than forecast, the dollar is likely to respond with a short-term decline. The better-than-forecast data will strengthen the dollar .

**15:00 CAD Bank of Canada’s decision on interest rate. Bank of

Canada’s accompanying statement. Bank of Canada’s Monetary Policy Committee Report**

The Bank of Canada will decide on the interest rate. In March 2020, the bank lowered the rate 3 times, bringing it to the level of 0.25% to mitigate the economic damage from the novel coronavirus pandemic.

In an accompanying statement, the central bank of Canada said that the decision “aims to support the financial system, which plays a central role in lending to the economy, as well as to create a foundation that will allow the economy to return to normal.” The central bank’s press release also said the spread of the coronavirus and the plummeting global oil prices are collectively weighing heavily on Canadians and the Canadian economy.

In fact, quantitative easing and a significant cut in the interest rate should contribute to the weakening of the national currency.

The impact of the coronavirus on the Canadian economy and the country’s labor market (in March 2020, unemployment rose to 7.8% from 5.6% in February, and the number of employed, as reported by Statistics Canada, fell by 1.01 million), and weakness in the housing market is also putting pressure on the Bank of Canada to further ease monetary policy.

However, the Bank of Canada is expected to keep its interest rate at 0.25% at its meeting on Wednesday.

Tough tone of the accompanying statement by the Bank of Canada on rising inflation and the prospects for further tightening of monetary policy will cause the Canadian dollar to strengthen. If the Bank of Canada signals the need for soft monetary policy, the Canadian currency will decline.

Thursday, March 11

12:45 EUR ECB decision on rates

The ECB will publish its decision on the key rate and on the deposit rate. The ECB’s tough stance on inflation and key interest rates contributes to the strengthening of the euro, while the soft stance and rate cuts weaken the euro. In September 2019, the European Central Bank lowered its key interest rate on deposits by 0.1%, to -0.5% for the first time since March 2016 and began buying bonds worth 20 billion euros a month, renewing the so-called quantitative easing program. According to the ECB leaders, the balance of risks for the economic prospects of the Eurozone “is still shifted to the negative side”, and “until inflation is in line” with the target level, which is just below 2%, the rate will remain low. Now inflation in the Eurozone is stubbornly holding around 1%, and the new forecasts of the ECB on rates and the QE program can be seen as a signal of the inclination to further soften policy.

After Brexit, trade conflicts, factors of political instability in Europe, as well as the growing coronavirus pandemic, due to which European countries are forced to introduce new quarantine restrictions that negatively affect economic activity, are the main threats to the European economy. Back in March 2020, the ECB signaled the possibility of policy easing, and the bank’s representative admitted that the bank’s management could lower the already negative interest rates even more.

Probably, following the results of this ECB meeting, the key interest rate will remain at the same level of 0%. The ECB’s rate on deposits for commercial banks is also likely to remain at -0.5%. At the same time, there is a possibility that at this meeting the ECB will announce a new program to stimulate the economy, which will put pressure on the euro.

13:30 EUR Press conference of the ECB

During the press conference, a surge in volatility is possible not only in the euro quotes, but also in the entire financial market, if the ECB leaders make any unexpected statements. Similar previous decisions by the ECB on interest rates and subsequent press conferences have moved the euro rate by 3-5% in a short time. The ECB leaders will assess the current economic situation in the Eurozone and comment on the ECB’s rate decision.

The soft tone of the statements will have a negative impact on the euro. Conversely, a tough tone from ECB officials on central bank monetary policy will strengthen the euro.

Friday, March 12

**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 on the basis of a statistical method agreed between 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 January, the HICP index (on an annualized basis) increased by +1.4% (+1.6% on an annualized basis). The preliminary forecast for February was: +0.7% and +1.6%, respectively. If the data turn out to be better than the forecast and the first estimate, the euro may strengthen in the short term. The growth of the indicator is a positive factor for the euro. The data show that inflationary pressures are still low in Germany. The data worse than the forecast and the previous value will negatively affect the euro.

13:30 CAD Unemployment rate in Canada

Statistics Canada is to publish data on the country’s labor market for February.

Unemployment has risen in Canada in recent months, including amid massive business closures due to coronavirus and layoffs. Unemployment rose from the usual 5.6% - 5.7% to 7.8% in March and already up to 13.7% in May 2020. If unemployment continues to rise, the Canadian dollar will decline. If the data turn out to be better than the previous value, the Canadian dollar will strengthen. A decrease in the unemployment rate is a positive factor for the CAD, an increase in unemployment is a negative factor. Unemployment is expected to be 9% in February (after 9.4% in January, 8.6% in December, 8.5% in November, and 8.9%, 9.0%, 10.2%, 10 , 9%, 12.3%, 13.7%, 13.0%, respectively, in previous months).

**15:00 USD University of Michigan Consumer Confidence Index

(preliminary release)**

This indicator reflects the confidence of American consumers in the economic development of the country. A high level indicates economic growth, while a low level indicates stagnation. Previous values of the indicator: 76.8 in February, 79.0 in January 2021. An increase in the indicator will strengthen the USD, while a decrease in the value will weaken the dollar. This indicator is expected to come out in March with a value of 78.0. There is still a weak trend towards a gradual recovery in the growth of the indicator. The data worse than the forecast may negatively affect the dollar 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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