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Economic calendar for the week 22.03.2021 - 28.03.2021

2021-03-21

2021-03-21

Economic calendar for the week 22.03.2021 – 28.03.2021Jana Kane

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

next trading week (22.03.2021 – 28.03.2021)**

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

The yield on 10-year US government bonds this week reached a new 14-month high of 1.751%. Following the meeting that ended last Wednesday, the Fed leaders did not change the parameters of monetary policy, signaling that the interest rate will remain at minimum levels until the end of 2023, and that they are not very concerned about the growth of government bond yields. At the subsequent press conference, the Fed Chairman Jerome Powell made it clear that no adjustments are planned in the near future either.

The rise in government bond yields is supported by the dollar, which also rose in demand as a defensive asset after some European countries suspended vaccinations with AstraZeneca due to side effects. The DXY dollar index rose 0.5% for the week.

The dollar remains stable and shows no signs of sustained weakening after the last Fed meeting. Mild funding conditions together with accelerating vaccinations in the United States, the adoption of the next package of fiscal assistance and the prospect of lifting quarantine restrictions and opening the economy, are increasing investor interest in US assets and, ultimately, in the dollar. It is likely to 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 the UK, Germany, the Eurozone, the United States, as well as the results of the meetings of the central banks of China and Switzerland.

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 22

01:30 CNY The People’s Bank of China interest rate decision

Since May 2012, the People’s Bank of China has been steadily cutting interest rates in support of Chinese manufacturers. The last time the bank lowered the rate in April 2020 (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 has become 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 mitigate the negative consequences of 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.

The coronavirus has become an additional strong negative factor.

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.

Nevertheless, if the People’s Bank of China makes unexpected statements or decisions, volatility may increase in the entire 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.

13:00 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.

Following the results of the March 2021 meeting, the Fed kept the key rate at 0.25% and confirmed its intention to achieve an average inflation level of 2% with long-term inflation expectations also at an average of 2%, signaling that the interest rate will remain at minimum levels up to the end of 2023. At the subsequent press conference, the Fed Chairman Jerome Powell made it clear that no adjustments are planned in the near future either.

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

Tuesday, March 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 wages 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: March report suggests that average wages with bonuses increased over the last reporting 3 months (November-January) by +4.0% (against +4.7%, +3.7%, +2.8% , +1.3%, +0.1% in previous periods); without bonuses - increased by +4.3% (against +4.1%, +3.6%, +2.8%, +1.9%, +0.9%, +0.2% in previous periods ). Thus, the expected data is close to the average values ​​of the indicators. They also point to the growing dynamics of the level of wages, which is a positive factor for the pound as it contributes to the growth of inflationary pressures. If the data turns out to be better than forecast, the pound is likely to strengthen in the foreign exchange market. Data worse than forecast will negatively affect the pound in the short term.

Also at this time, data on unemployment in the UK are published. In the 3 months from November to January, unemployment is expected to be at 5.2% (against 5.1%, 5.0%, 4.9%, 4.8%, 4.5%, 4.3%, 3.9%, 3.9% 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, the rise in unemployment 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, then 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.

**11:50 GBP Speech by the head of the Bank of England Andrew

Bailey**

Participants in financial markets are expecting Andrew Bailey, who became the head of the Bank of England on March 16, 2020, replacing Mark Carney in this post, to clarify the situation regarding the future policy of the central bank of Great Britain. Volatility during the speech of the head of the Bank of England usually rises sharply in the quotes of the pound and the London Stock Exchange FTSE index, if he gives any hints of tightening or easing of the Bank of England’s monetary policy. Andrew Bailey will probably also touch on the state and prospects of the British economy after Brexit and tough quarantine restrictions due to the coronavirus. If Bailey does not touch upon the issues of monetary policy, the reaction to his speech will be weak.

16:00 USD The Fed Chairman Jerome Powell’s speech in Congress

The Fed Chairman Jerome Powell will speak to Congress on economy and monetary policy. His comments could affect both short-term and long-term USD trading if he again touches on the Fed 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. Any hint by Powell about the need for an even softer central bank policy will cause the dollar to fall and American stock markets to rise.

Financial market participants will carefully study his speech in order to catch signals regarding the further actions of the Fed.

23:50 JPY Bank of Japan Monetary Policy Committee Meeting

At this meeting, the Monetary Policy Committee of the Bank of Japan will once again sum up the results of the bank’s regular meeting last week, analyze the economic situation in Japan and give indications on possible future prospects for the Bank of Japan’s financial policy.

If the tone of the minutes of the meeting indicates the firmness of the intentions of the Bank of Japan regarding monetary policy in the country, it will negatively affect the Japanese stock market and strengthen the yen. Conversely, a soft rhetoric about the bank’s monetary policy prospects will contribute to the weakening of the yen and the growth of the Japanese stock market.

Wednesday, March 24

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 the London Stock Exchange FTSE100 index.

In the previous reporting month (January), the growth in consumer inflation (in annual terms) amounted to +0.7%.

Forecast for February: +0.8% (annualized). This value indicates weak inflationary pressures and 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 change in prices for 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 and January - by +1.4%. Probably, the publication of the indicator will have a positive effect on the pound in the short term, if its value is higher than the forecast and the previous value. Forecast for February: +1.4% (annualized). The indicator value below the forecast and previous values ​​may provoke a weakening of the pound.

**08:30 EUR Germany 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, below 50 as negative for the euro. Forecast for March (preliminary release): 60.9.

Previous monthly values: 60.7, 57.1, 58.3, 57.8, indicating that business activity in this sector of the German economy is accelerating after a slowdown in 2020 due to the coronavirus pandemic. The growth of the indicator above the previous value will support the euro (in the short term). The data worse than the forecast 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 seen as positive and strengthens the EUR, one below 50 as negative for the euro. Forecast for March (preliminary release): 51.8 against 51.1, 50.8, 52.0, 51.7 in previous months. The publication of this indicator with the specified expected value is likely to support the euro in the short term, despite the relative decline. The data worse than the forecast and below the value of 50.0 will have a negative impact on the euro.

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

Economics (preliminary release)**

Eurozone’s Manufacturing PMI is an important indicator of the health of the entire European economy. A result above 50 is seen as positive and strengthens the EUR, below 50 as negative for the euro. Forecast for March (preliminary release): 49.1 against 48.8, 47.8, 49.1, 45.3 in previous months, which is unlikely to have a positive impact on the euro, also given the relative decline in the indicator. If the data turns out to be worse than the forecast, the euro may drop sharply in the short term.

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

release)**

The UK’s 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 continue to be the most important part of the services industry. If the data turns out to be worse than the forecast and the previous value, the pound is likely to drop sharply in the short term. The data is better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is seen as positive and strengthens the GBP, below 50 - as negative for the GBP.

Previous values ​​of the indicator: 49.5 in February, 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 March: 51.0

**12:30 USD Durable goods orders. Capital goods orders (ex defense

and aviation)**

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 “durable goods orders”: +3.4% in January, +1.2% in December, +1.3% 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 “capital goods orders ex defense and aviation”: +0.5% in January, +1.5% in December, +1.2% 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 February: +1.0% (durable goods orders), + 0.7% (capital goods orders ex defense and aviation).

It seems that the growth of indicators continues after their recovery in previous months from a strong drop 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.

14:00 USD The Fed Chairman Jerome Powell’s speech in Congress

The Fed Chairman Jerome Powell will speak to Congress on economy and monetary policy. His comments could affect both short-term and long-term USD trading if he again touches on the Fed 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. Any hint by Powell about the need for an even softer central bank policy will cause the dollar to fall and American stock markets to rise.

Financial market participants will carefully study his speech in order to catch signals regarding the further actions of the Fed.

Thursday, March 25

00:00 EUR European Council meeting (all day)

This meeting is attended by the heads of state and government of the countries of the European Council. The purpose of this meeting is, among other things, to discuss the current situation in the world and European economy. The meeting will last all day. After its completion, an official statement on the results of the meeting is published, which may have an impact on the European and world financial markets.

**08:30 CHF SNB’s decision on the interest rate. SNB’s statement on

monetary policy**

The current rate on deposits is in negative territory and amounts to -0.75%. At the previous meeting in December, the rate remained unchanged. The central bank of Switzerland has consistently advocated a soft monetary policy in the country, and traditionally considers the rate of the national currency “overvalued”. Recently, the franc has largely lost its status as a safe-haven currency, and the threat of intervention, of course, is holding back the franc from excessive growth. According to the SNB leaders, the franc is “still very overvalued” and intervention in the foreign exchange market remains “an important means of maintaining the low attractiveness of investments in francs and easing upward pressure on the currency”.

Traders will also scrutinize the SNB’s statement in order to pick up signals regarding further monetary policy plans. Tough rhetoric of the statement will strengthen the franc. A soft tone and the intention to continue the extra soft monetary policy of the SNB will negatively affect the franc. High volatility is expected in the foreign exchange market and, above all, in the franc if the SNB management makes unexpected statements.

**09:30 GBP Speech by the head of the Bank of England Andrew

Bailey**

Participants in financial markets are expecting Andrew Bailey, who became the head of the Bank of England on March 16, 2020, replacing Mark Carney in this post, to clarify the situation regarding the future policy of the central bank of Great Britain. Volatility during the speech of the head of the Bank of England usually rises sharply in the quotes of the pound and the London Stock Exchange FTSE index, if he gives any hints of tightening or easing of the Bank of England’s monetary policy. Andrew Bailey will probably also touch on the state and prospects of the British economy after Brexit and tough quarantine restrictions due to the coronavirus. If Bailey does not touch upon the issues of monetary policy, the reaction to his speech will be weak.

12:30 USD US Annual GDP for 4th Quarter (final estimate)

GDP data is one of the key indicators (along with labor market and inflation data) for the Fed in terms of its monetary policy. A strong result strengthens the US dollar; a 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 indicate 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 priced in. The preliminary forecast for the 4th quarter of 2020 was +4.0% (+4.1% second estimate).

Friday, March 26

00:00 EUR European Council meeting (all day)

This meeting is attended by the heads of state and government of the countries of the European Council. The purpose of this meeting is, among other things, to discuss the current situation in the world and European economy. The meeting will last all day. After its completion, an official statement on the results of the meeting is published, which may have an impact on the European and world financial markets.

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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