Economic calendar for the week 15.03.2021 - 21.03.2021

2021-03-14

Economic calendar for the week 15.03.2021 – 21.03.2021Jana Kane

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

next trading week (15.03.2021 – 21.03.2021)**

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

The sale of US government bonds continues, which contributes to the growth of their yield and the strengthening of the dollar. The yield of 10-year US bonds last week renewed a 13-month high at 1.635%.

American stock indices also mainly rose last week, especially the industrial DJIA, which added +3% rising to a new all-time high of 32676.0.

Investors reacted positively to the news that the US President Joe Biden had signed a $1.9 trillion stimulus package previously approved by Congress. The project provides for the allocation of about $400 billion to combat the pandemic, about $1 trillion to help the population, and $500 billion to stimulate the economy.

Probably, the dollar will continue to strengthen next week if the situation on the US government bond market does not change.

Next week, financial market participants will pay attention to the publication of important macro statistics from China, Australia, the US, and Canada. However, their focus will be on the meetings of the central banks of the United States, Great Britain, and Japan. It is also worth considering that on Sunday March 14, 2021, the US will switch to daylight saving time. Countries of Europe will switch to daylight saving time on March 28.

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 15

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 wellbeing 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 +4.6% (after an increase of +8% in the last months of 2019 and a fall of -20.5% in February 2020). Outlook: Retail sales in China rose +32% (YoY) in January, suggesting a deepening recovery from a strong fall in February-March 2020. If the data turns out to be even better, the CNY will strengthen even more.

Tuesday, March 16

00:30 AUD Minutes of the March meeting of the RB 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 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 inflation puts pressure on the AUD.

Market participants believe that the RBA will not raise interest rates until 2022. Wages continue to rise slowly and household debt has risen to an all-time high, which also puts higher interest rates in the longer term.

“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 the head of the RBA Philip Lowe, “there are no serious arguments in favor of tightening monetary policy in the short term.” In his opinion, “some time will pass before interest rates rise.”

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

12:30 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 (January), the indicator increased by +5.3%, which indicates a gradual improvement in this sector of the American economy after the partial lifting of strict quarantine restrictive measures in a number of states. Forecast for February: -0.5%, which is likely to negatively affect the USD if the forecast is confirmed.

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 (+6.0% in January, -1.9% in December, -0.5% in November, +0.1% in October, +0.9% in September, -0.3 % in August) may negatively affect the dollar in the short term. Forecast for February: -1.2%.

Wednesday, March 17

12:30 CAD Consumer price indices in Canada

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 by +1.6% in January 2021, +0.7% in December 2020, +1.5% in November, +1.0% in October and September (in annual terms). If the data for February turns out to be worse than the previous values, it will negatively affect the CAD. The data will strengthen the Canadian dollar better than the previous values. Outlook: Core CPI rose +1.4% in February (YoY), which is likely to have a positive impact on the CAD, despite the relative decline in the indicator.

**18:00 USD The Fed’s decision on the interest rate. Monetary

policy account. Summary of Economic Projections from the Federal Open Market Committee**

Following two meetings in March 2020, the Fed sharply lowered the interest rate (to 0.25% from 1.75% in February), and also announced the allocation of $700 billion for the purchase of US government bonds and mortgage-backed securities. Subsequently, the Fed has repeatedly announced additional measures to support the American economy and inject cheap liquidity into the financial system. Usually, with the easing of the monetary policy, the national currency becomes cheaper and its quotations go down.

In 2020, the dollar declined as investors withdrew funds from defensive assets buying more risky and profitable assets of the stock market, which continued to grow despite the threat of a second wave of the coronavirus epidemic and the associated economic slowdown. The role of the dollar as a defensive asset was also declining. However, in 2021, the dollar is strengthening, which is associated with an increase in the yield of US government bonds, and the Fed has not yet responded to this in any way.

The rate is widely expected to remain at 0.25% at this meeting. Nevertheless, during the publication of the decision on the rate, volatility may sharply increase throughout the financial market, primarily in the American stock market and in the dollar quotes, especially if the decision on the rate differs from the forecast or unexpected statements are received from the Fed leadership.

Powell’s comments may affect both short-term and long-term USD trading. 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. Investors are eager to hear Powell’s views on the Fed’s future plans for this year.

The FOMC Economic Projections include the Fed’s report on inflation and economic growth over the next 2 years and, just as important, shows the individual views of FOMC members on interest rates.

18:30 USD FOMC Press Conference

The press conference of the US Federal Open Market Committee lasts about an hour. In the first part, the ruling is read, followed by a series of questions and answers that can increase market volatility. Any hints by Powell about the possibility of a change in the current monetary policy will cause an increase in volatility in the dollar quotes and in the American stock market.

21:45 NZD New Zealand GDP for the 4th quarter

The release of the data will cause increased volatility in the NZD. Considering the recent rise in prices for commodities and agricultural products (especially for dairy products, which is the most important component of New Zealand exports), as well as the fact that New Zealand is the least affected by the coronavirus pandemic compared to other major economies, it is likely that New Zealand’s Q4 GDP report will come out with positive numbers.

GDP is expected to grow by +14.4% in the 4th quarter of 2020 (previous values of +14%, -11%, -1.2%, +0.1), but decreased by -0.1% in in annual terms (previous values +0.4,% -11.3%, 0%, +1.7%). The data so far remain inconsistent, although they indicate that the gradual recovery of the New Zealand economy continues after its fall in the first half of 2020. The data worse than the forecast will negatively affect the NZD quotes.

Thursday, March 18

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 value is positive for the AUD, while a low value is negative. Forecast: In February, the number of employed Australian citizens increased (after falling in April by 607,400, in May 2020 by 264,100 and an increase by 29,100 in January 2021).

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 February was at 6.5% (against 6.4% in January, 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 cannot be called 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 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 record 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 decreasing, 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, the Australian dollar may significantly decline in the short term. Better-than-forecast data will strengthen AUD in short-term.

**12:00 GBP Bank of England’s interest rate decision. Minutes of

the meeting of the Bank of England. Planned volume of asset purchases by the Bank of England. Monetary Policy Report**

In March (11 March and 19 March) 2020, during extraordinary meetings, the Bank of England cut its interest rate twice bringing it to the level of 0.1%, and announced its intention to purchase UK government bonds in the amount of 200 billion British pounds in an attempt to counteract economic damage from the coronavirus pandemic. The central bank announced an increase in its bond portfolio to £645bn, then to £745bn and to £895bn from £445bn at the time. “The current situation is completely unprecedented,” said Governor of the Bank of England Andrew Bailey during a press conference after an emergency meeting on March 19. Bailey said he expects a sharp economic contraction due to the coronavirus, and the Bank of England is ready to take further stimulus measures if necessary. “No, we are not done yet,” he said. Based on these statements by Andrew Bailey, it is fair to expect further actions from the Bank of England towards easing its monetary policy. It is possible that at this meeting on March 18, the Bank of England will again undertake them, increasing the volume of purchases of bonds or lowering the interest rate. Although, most economists believe that the Bank of England will refrain from these actions for now.

Also at this time, the minutes of the Monetary Policy Committee (MPC) of the Bank of England are published with the distribution of votes “for” and “against” raising / lowering the interest rate. 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.

The intrigue about the further actions of the Bank of England remains. And in the trading of the pound and the FTSE100 index, a lot of trading opportunities will be there during the publication of the bank’s decision on rates.

Also at the same time, the Bank of England’s monetary policy report will be published, containing an assessment of the economic outlook. Volatility in the pound quotes may rise sharply. Apart from GDP, one of the main benchmarks for the Bank of England regarding the prospects for monetary policy in the UK is the inflation rate. If the tone of the report is soft, the British stock market will receive support and the pound will decline. Conversely, the report’s tough rhetoric on curbing inflation, implying an increase in interest rates in the UK, will strengthen the pound.

Friday, March 19

00:30 AUD Retail Sales Index

The 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. Previous index value (for January) +0.5%. If the data turns out to be weaker than the previous value, the AUD may sharply decline in the short term, but if it is above the previous values, the AUD is likely to strengthen. Forecast: +0.4% in February.

**03:00 JPY Bank of Japan’s decision on interest rate. Bank of

Japan Press Conference and Monetary Policy Report**

The Bank of Japan will decide on the interest rate. At the moment, the main rate in Japan is in negative territory at -0.1%. Most likely, the rate will remain the same. If it is cut and deepens into negative territory, such a decision will cause a sharp decline in the yen in the foreign exchange market and an increase in the Japanese stock market. In any case, during this period of time, a jump in volatility is expected in trading in the yen and in the Asian financial market.

Since February 2016, the Bank of Japan has kept the deposit rate at -0.1%. The target yield for 10-year bonds is currently around 0%. In 2020, the Bank of Japan set an annual target for ETF purchases of 12 trillion yen and expanded its virus-affected business aid program to 110 trillion yen from 75 trillion yen. Under this program, companies can obtain unsecured loans at zero interest rates. The goal of the program is to support commercial companies whose bankruptcy rates have skyrocketed in Japan in recent months, including due to the coronavirus pandemic. In a recent accompanying statement from the Bank of Japan, it said that the bank’s management will continue to “increase the monetary base until inflation stays above 2%.” “We will not hesitate to take additional mitigation measures if necessary,” the bank also traditionally said in a statement.

During the press conference, the head of the Bank of Japan Haruhiko Kuroda will comment on the bank’s monetary policy. The Bank of Japan continues to adhere to its super-soft monetary policy. As Kuroda has stated on numerous occasions, “it is appropriate for Japan to patiently continue with its current loose monetary policy.” Markets usually react noticeably to Kuroda’s speeches. Surely, he will again touch upon the topic of monetary policy during his speech, which will cause an increase in volatility not only in the yen trade, but also throughout the Asian and world financial markets.

If the bank’s executives decide that Japan’s economy is stable and the momentum of inflation towards the 2% target is not diminishing, they will refrain from changing policy.

06:00 JPY Press Conference of the Bank of Japan

During the press conference, head of the Bank of Japan Haruhiko Kuroda will comment on the bank’s monetary policy. Despite the measures taken earlier by the bank to stimulate the Japanese economy, inflation remains low, production and consumption are falling, which negatively affects export-oriented Japanese manufacturers. Markets usually react noticeably to Kuroda’s speeches. If he touches on the topic of monetary policy during his speech, volatility will increase not only in the yen trade, but throughout the Asian and global financial markets.

12:30 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 December) was -3.4% after falling in March 2020 by -9.9%, in April - by -25% and growth in May by +18.7%. If the data for January turns out to be weaker than the forecast of -2.5% and especially below the previous value, the CAD may sharply 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.

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