Economic calendar for the week 29.03.2021 - 04.04.2021

2021-03-28

Economic calendar for the week 29.03.2021 – 04.04.2021Jana Kane

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

next trading week (29.03.2021 – 04.04.2021)**

Trading on key Forex news: next week we are expecting the publication of important macro statistics from China, the UK Germany, Eurozone, the US, Australia, Japan, and the speech by the US President Joe Biden.

Despite the fact that the yield on 10-year US government bonds declined, the DXY dollar index ended last week with another increase setting a new 4-month record at around 92.94, the highest level since the beginning of this year.

The dollar remains stable after the Fed meeting in mid-March. Loose 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 remains favorable for its strengthening.

Next week, financial market participants will pay attention to the publication of important macro statistics from China, the UK, Germany, Eurozone, the US, Australia, and Japan, which include the publication on Friday of monthly data from the American labor market. The data are of decisive importance (along with inflation indicators and GDP data) for the Fed when making decisions on monetary policy. We also expect the speech by the US President Joe Biden.

On Thursday and Friday, banks and exchanges in Europe and the United States will be closed due to Good Friday. Forex trading volumes will be low.

It is also noteworthy that on Sunday 28 March 2021, Europe will switch to daylight saving time.

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 29

No important macro statistics planned to be released.

Tuesday, March 30

**12:00 EUR Harmonized Index of Consumer Prices (HICP) in Germany

(preliminary release)**

This index is published by the EU Statistical Office and is calculated on the basis of a statistical method agreed between all the 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.

Preliminary forecast for March: +1.6% (against +1.6% in January and February, -0.7% in December and negative values in the second half of 2020) on an annualized basis. 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 show that inflationary pressures are still low in Germany. The data worse than the forecast and the previous value will negatively affect the euro.

Wednesday, March 31

**01:00 CNY China Manufacturing PMI from China Federation of

Logistics & Purchasing (CFLP)**

This is an important indicator of the state of the Chinese economy as a whole. A result above 50 is seen as positive and strengthens the CNY, one below 50 as negative for the yuan. Previous values of the indicator: 50.6 in February, 51.3 in January.

The relative growth of the index and the value above 50 should have a positive effect on the CNY. The data above the value of 50 indicates an increase in activity, which has a positive effect on the quotes of the national currency. In the opposite case, and if the indicator is below 50, the yuan will be under pressure and probably will decrease.

**01:00 CNY China Services PMI from China Federation of Logistics &

Purchasing (CFLP)**

This indicator assesses the state of the services sector in the Chinese economy. A result above 50 is considered positive and strengthens the yuan. Previous values of the indicator: 51.4 in February, 52.4 in January. The indicator is above 50, which is likely to have a positive effect on the yuan quotes, even with a slight relative decline. If the indicator is below 50, the yuan will be under pressure and likely to decline.

06:00 GBP UK Q4 GDP (final estimate)

GDP is considered to be an indicator of the overall health of the British economy. The upward trend in GDP is considered positive for the GBP. The UK’s GDP was one of the highest in the world until 2016, when the Brexit referendum was held. In the future, its growth slowed down, and with the onset of the global coronavirus pandemic the growth rate of British GDP went into negative territory altogether.

UK GDP is forecast to grow 15.5% in Q4 2020 (after falling -19.8% in Q2 and growing +16% in Q3 2020). The main factors that can force the Bank of England to keep rates low are weak GDP and labor market growth, as well as low consumer spending. If the GDP data turns out to be worse than the forecast, it will put downward pressure on the pound. Strong GDP report will strengthen the pound.

**09:00 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 changes in purchasing habits. A positive result strengthens the EUR, a negative one weakens it. At the end of 2020, the CPI index fell by -0.3%, which indicates low inflationary pressures and even a slowdown in inflation. Forecast for March: +0.9% (in annual terms) against +0.9% in January and February. If the data turns out to be worse than the forecast, the euro may drop 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 +1.4%, +1.1% in February (on an annualized basis) after more modest values of +0.2% between September and December 2020. If the data for March 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 react 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 March: +1.1%.

USD Speech by US President Joseph Biden after 11:00 (GMT)

Speeches by American presidents tend to attract investor interest and can cause a surge in volatility in financial markets. Recently, information has appeared in the media that the White House is preparing a new financial aid project in the amount of $ 3 trillion, moreover, by increasing the tax for large companies and for wealthy Americans. This new aid package is likely to strengthen the positive dynamics of US stock indices and put additional pressure on inflation towards its acceleration, which, in turn, will force the Fed to winding down its stimulating extra soft policy earlier than in 2023, and this will be a signal to close short positions in the dollar.

If Biden confirms this information in his speech, the volatility in the market will rise sharply. But in any case, market participants will closely monitor Biden’s speech in order to catch any signals regarding the prospects for the economy and the actions of the White House.

12:15 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. It is expected that the growth in the number of workers in the US private sector in March was +403,000 (against an increase of 117,000 in February, 174,000 in January, a fall of -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 is a negative factor. 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 recently observed in the construction and financial services sectors.

Although 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.

23:50 JPY Tankan Large Manufacturing Index

This index reflects general business conditions for large manufacturing companies in Japan and is an indicator of the current state of Japan’s export-oriented economy, which is highly dependent on the industrial sector.

An indicator value above 0 (zero is the middle line) is a positive factor for the JPY, while an indicator value below 0 is negative.

According to the forecast, the index value is expected to be 0 (for the 1st quarter of 2021) after falling to -10 in the 4th quarter and to -27 and -34 in the 3rd and 2nd quarters of 2020, respectively. Despite the growth, this is still a low indicator, which is unlikely to support the yen’s position.

Thursday, April 1

00:30 AUD Trade balance. Retail Sales Index

The trade balance indicator evaluates 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 (January) - AU$ 10.142 billion. A decrease in the trade surplus may negatively affect the Australian dollar. Conversely, the growing trade surplus is a positive factor for the AUD.

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 index value (for January) was -1.1%. If the data turns out to be weaker than the previous value, the AUD may sharply decline in the short term, but if it’s above the previous values, the AUD is likely to strengthen. Forecast: +0.6% in February.

0 6:00 EUR Retail sales in Germany

Retail sales is the main indicator of consumer spending in Germany showing changes in retail sales. A high result strengthens the euro, and vice versa, a low result weakens it. Forecast: -0.3% in February (+1.3% in annual terms) against -4.5% (-8.7% in annual terms) in January, -9.6% (+1.5% in in annual terms) in December, +1.9% (+5.6% in annual terms) in November.

The data indicate a new decrease in the indicator, including 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 in the short term.

14:00 USD US Manufacturing PMI (from ISM)

Published by the Institute for Supply Management (ISM), the US Manufacturing PMI is an important indicator of the health of the US 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: 61.0 in March (against 60.8 in February, 58.7 in January, 60.7 in December). The index value is above the 50 level and previous values, which is likely to support the dollar. 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 weaken sharply.

Friday, April 2

**12:30 USD Average hourly wages. Non-Farm Payrolls. Unemployment

rate**

These are the most important indicators of the state of the labor market in the United States for March. Forecast: +0.2% (against +0.2% in January and February, +0.8% in December, +0.3% in November) / +0.500 million (against +0.379 in February, +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) / 6.1% (against 6.2% in February, 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 indicators can be described as encouraging. The data speaks of continued improvement in the US labor market after plummeting in the first half of 2020. Prior to the coronavirus, the US labor market remained strong, signaling the stability of the American economy and supporting dollar quotes.

It is often difficult to predict the market reaction to the publication of indicators, because many indicators for previous periods are subject to revision. Now it will be even more difficult to do this, because the economic situation in many other major economies remains controversial due to the coronavirus. 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 choose to stay out of the market during this time frame.

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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