Economic calendar for the week 05.04.2021 - 11.04.2021

2021-04-04

Economic calendar for the week 05.04.2021 – 11.04.2021Jana Kane

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

next trading week (05.04.2021 – 11.04.2021)**

Trading on key Forex news: we are expecting the publication of important macro statistics from the US, China, Canada, as well as the results of the meeting of the Central Bank of Australia.

Despite the strong report of the US Department of Labor published last Friday, it was unable to provide significant support to the dollar. The US economy created 916,000 new nonfarm jobs in March, above the 647,000 forecast, while unemployment fell from 6.2% to 6.0%. The Labor Department data signal a strong economic recovery, suggesting that the pace of hiring has accelerated and peaked since last August. “In the first two months of our presidency, we have seen more jobs created than at any other time in history,” US President Joe Biden was quick to say after the publication of this report. According to Biden, a new “infrastructure plan is needed for long-term growth.” “If we accept this plan, 19 million jobs will be created in the economy,” Biden said, promising to begin “meetings with members of Congress after Easter.”

The DXY dollar index ended the last shortened week (at the end of which the Catholic world celebrated Good Friday) with another increase, setting a new 21-week record at around 93.47, 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 strengthening next week if the situation on the US government bond market remains favorable for its strengthening.

The next week will not be rich with important macro data, and on Monday banks in many Catholic countries will be closed due to Easter Monday. Nevertheless, financial market participants next week will pay attention to the publication of important macro statistics from the United States, China, Canada, as well as the results of the meeting of the central bank of Australia.

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, April 5

The Catholic world celebrates Easter Monday. Banks in Europe and America will be closed. Forex trading volumes will be low.

14:00 USD Services PMI (from ISM) in the US

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

In January, this indicator came out with a value of 58.7, and in February - at 55.3. 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 March: 58.5, which is likely to have a positive overall effect on the USD.

Tuesday, April 6

**04:30 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 the 3-year government bonds of Australia is set at 0.25%. The RBA has launched a lending program for the banking system in the amount of at least A$ 90 billion.

In early November 2020, the Reserve Bank of Australia lowered its key rate again, bringing it and its 3-year bond target to 0.10% from 0.25%, and announced A$ 100 billion quantitative easing program to support the economic recovery.

“We live in extraordinary and difficult times,” said the 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 2-3% target set by the RBA for four years.

Unemployment in the country has remained 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 hard.

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 not ruled out.

In an accompanying statement, the leaders of the RBA will explain the reasons for the decision on the rate. 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.

Wednesday, April 7

**18:00 USD Minutes of the March meeting of the Federal Open Market

Committee**

FOMC minutes are usually released by the Fed two or three weeks after the date of the decision on interest rates.

The publication of the minutes is extremely important for determining the course of the current Fed policy and the prospects for raising interest rates in the United States. The volatility of trading in financial markets during the publication of the minutes usually increases, since the text often contains either changes or clarifying details regarding the results of the last FOMC Fed meeting.

During the March meeting, the Fed leaders did not change the parameters of monetary policy, signaling that the interest rate would remain at minimum levels until the end of 2023.

At a subsequent press conference, the Fed Chairman Jerome Powell made it clear that no adjustments are planned in the near future either. Purchases of Treasury securities in the amount of $ 80 billion a month and mortgage-backed securities in the amount of $ 40 billion a month will continue in the same volumes.

The Fed’s forecasts for inflation and economic growth have been revised upwards, despite the fact that the key rate will not be increased until the end of 2023. The Fed intends to adhere to a flexible approach to the target inflation rate and is not very concerned about the growth of government bond yields.

Loose financing conditions, combined with accelerating vaccinations, the adoption of the next package of fiscal aid and the prospect of lifting quarantine restrictions and opening the economy, increases the Fed’s tolerance for higher yields on government bonds, economists say.

The soft tone of the minutes will have a positive effect on stock indices and negatively on the US dollar. The tough rhetoric of the Fed leaders regarding the prospects for monetary policy will push the dollar to further growth.

Thursday, April 8

No important macro statistics are scheduled to be released. However, market participants will follow the speech of the head of the Fed Jerome Powell, which starts at 16:00. 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 strengthening the US dollar, while a more cautious position is seen as negative for the USD.

If he makes unexpected statements, the volatility in the financial markets may increase. According to Powell, the current policy of the Fed is sufficient and appropriate to the situation, but the central bank is ready to adjust it in the event of risks that may become an obstacle to achieving its goals.

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

Friday, April 9

01:30 CNY Consumer Price Index (CPI)

The National Bureau of Statistics of China will release another monthly data reflecting the dynamics of consumer prices in China. The rise in 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 2021, the growth of the consumer inflation index was +1.0% (-0.3% in annual terms), and in February +0.6% (-0.2% 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, the consumer price index is expected to grow by +0.6% in March, but decrease by -0.4% in annual terms.

The growth of the consumer inflation 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.

13:30 CAD Unemployment rate in Canada

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

Unemployment has risen in Canada in recent months amid massive business closures due to coronavirus and layoffs. Unemployment rose from the usual 5.6% - 5.7% to 7.8% in March and up to 13.7% in May 2020. If unemployment continues to rise, the Canadian dollar will decline. If the data is 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. It is expected that in March, unemployment was at the level of 8% (against 8.2% in February, 9.4% in January, 8.8% in December, 8.6% in November).

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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