Trading News to Watch Next Week (30 July – 03 August 2018)

Unbothered in the least by the scorching August heat, the global markets are set to reach peak performance next week. Top events include detailed GDP m/m report from Canada, Monetary Policy Statement from Japan, FOMC Statement from the US, speech by Bank of England’s Gov Carney and more.

Monday, 30 July 2018

 

EUR – German Retail Sales m/m – 30th-3rd

Reflects the change in the total value of inflation-adjusted sales at the retail level, excluding automobiles and gas stations. This report is the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

An actual value of -2.1% vastly underperforms when compared to a forecast of-0.5%.

CHF – KOF Economic Barometer – 8:00 am

This report by the KOF Economic Research Agency shows the level of a composite index based on 219 economic indicators. The index is designed to predict the direction of the economy over the next 6 months.

The 219 economic indicators cover the following: banking confidence, production, new orders, consumer confidence, exchange rate, money supply, interest rate spreads, stock market prices, and housing.

An actual composite index value of 101.7 outperforms a forecast of 100.3.

GBP – Net Lending to Individuals m/m – 9:30 am

Reflects the change in the total value of new credit issued to consumers.

The change is correlated with consumer spending and confidence—rising debt levels are a sign that lenders feel comfortable issuing loans, and that consumers are confident in their financial position and eager to spend money.

An actual value of 5.3 billion slightly outweighs a prediction of 5.2 billion.

Tuesday, 31 July 2018

 

NZD – ANZ Business Confidence – 2:00 am

Shows the level of a diffusion index based on surveyed manufacturers, builders, retailers, agricultural firms, and service providers.

The report is a leading indicator of economic health—businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment.

Above 0.0 indicates optimism, and below that indicates pessimism. An actual value of -39.0 greatly outperforms a value of -27.2 for the month of May.

JPY – BOJ Outlook Report – Tentative

Bank of Japan’s outlook report provides valuable insight into the bank’s view of economic conditions and inflation—the key factors that will shape the future of monetary policy.

JPY – BOJ Policy Rate – Tentative

Represents the interest rate levied on excess current account balances held at the Bank of Japan. Short-term interest rates are the paramount factor in currency valuation—traders look at most other indicators merely to predict how rates will change in the future.

An actual value of -0.10 resonates with a forecast of the same value.

JPY – Monetary Policy Statement – Tentative

It’s among the primary tools the Bank of Japan uses to communicate with investors about monetary policy.

It contains the outcome of their decision on asset purchases and commentary about the economic conditions that influenced their decision.

Most importantly, it projects the economic outlook and offers clues on the outcome of future votes.

JPY – BOJ Press Conference – Tentative

The conference is among the primary methods the Bank of Japan uses to communicate with investors regarding monetary policy.

It covers the factors that affected the most recent interest rate decision, the overall economic outlook, inflation, and clues regarding future monetary policy.

CAD – GDP m/m – 1:30 pm

Reflects the change in the inflation-adjusted value of all goods and services produced by the economy.

The GDP the broadest measure of economic activity and the primary gauge of the economy’s health.

Canada is unique in that they release fresh GDP data on a monthly basis.

An actual value of 0.1% slightly exceeds a forecast of 0.0%.               

USD – CB Consumer Confidence – 3:00 pm

Represents the level of a composite index based on 5,000 surveyed households.

The survey asks respondents to rate the relative level of current and future economic conditions including labor availability, business conditions, and overall economic situation.

Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity.

NZD – Employment Change q/q – 11:45 pm

Reflects the change in the number of employed people. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.

An actual change of 0.6% is observed, beating a forecast of 0.5%.           

NZD – Unemployment Rate – 11:45pm

Reflects a percentage of total workforce that is unemployed and actively seeking employment during the previous quarter.

Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions.

An actual rate of 4.4% for the month of May remains faithful to a forecast of the same value.   

Wednesday, 1 August 2018

 

GBP – Manufacturing PMI – 9:30 am

Represents the level of a diffusion index based on 600 surveyed purchasing managers in the manufacturing industry.

The survey asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

The survey is a leading indicator of economic health—businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.

Above 50.0 indicates industry expansion, while below that indicates contraction. An actual value of 54.4 exceeds a forecast of 54.1.

USD – ADP Non-Farm Employment Change – 1:15 pm

Shows the estimated change in the number of employed people during the previous month, excluding the farming industry and government.

This data provides an early look at employment growth, usually 2 days ahead of the government-released employment data that it’s designed to mimic.

An actual value of 177 thousand people underperforms when compared to a forecast of 190 thousand.

USD – ISM Manufacturing PMI – 3:00 pm

Reflects the level of a diffusion index based on 400 surveyed purchasing managers in the manufacturing industry. The survey is a leading indicator of economic health—businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.

Above 50.0 indicates industry expansion, while below that indicates contraction. An actual value of 60.2 significantly exceeds a forecast of 58.2.

USD – Crude Oil Inventories – 3:30 pm

Shows the change in the number of barrels of crude oil held in inventory by commercial firms during the past week. It’s the primary gauge of supply and demand imbalances in the market, which can lead to changes in production levels and price volatility.

An actual value of -6.1 million starkly contrasts a forecast of -2.6 million.

USD – FOMC Statement – 7:00 pm

It’s the primary tool the Federal Open Market Committee uses to communicate with investors about monetary policy.

It contains the outcome of their vote on interest rates and other policy measures, along with commentary about the economic conditions that influenced their votes.

Most importantly, it discusses the economic outlook and offers clues on the outcome of future votes.

USD – Federal Funds Rate – 7:00 pm

The interest rate at which depository institutions lend balances held at the Federal Reserve to other depository institutions overnight.

Short-term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future.

An actual rate of <2.00% confirms a forecast of the same value.       

Thursday, 2 August 2018

 

AUD – Trade Balance – 2:30 am

Shows the difference in value between imported and exported goods and services during the reported month.

Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation’s exports.

Export demand also impacts production and prices at domestic manufacturers.

A positive number indicates that more goods and services were exported than imported. An actual value of 0.83 billion pales when paired with a forecast of 1.21 billion.           

GBP – Construction PMI – 9:30 am

The level of a diffusion index based on 170 surveyed purchasing managers in the construction industry.

This is a leading indicator of economic health—businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.

An actual value of 53.1 outperforms a forecast of 52.6.   

GBP – BOE Inflation Report – 12:00 pm

The report provides the Bank of England’s projection for inflation and economic growth over the next 2 years. The BOE Governor also holds a press conference to discuss the report’s contents after release.

GBP – MPC Official Bank Rate Votes – 12:00 pm

The vote is reported in an ‘X-X-X’ format—the first number is how many MPC (Monetary Policy Committee) members voted to increase interest rates, the second number is how many voted to decrease rates, and the third is how many voted to hold rates.

The Bank of England MPC meeting minutes contain the interest rate vote for each MPC member during the most recent meeting.

The breakdown of votes provides insight into which members are changing their stance on interest rates and how close the committee is to enacting a rate change in the future.

An actual member vote ratio of 3-0-6 beats a forecast of 2-0-7.

GBP– Monetary Policy Summary – 12:00 pm

The summary is among the primary tools the Monetary Policy Committee uses to communicate with investors about monetary policy.

It contains the outcome of their vote on interest rates and other policy measures, along with commentary about the economic conditions that influenced their votes.

Most importantly, it discusses the economic outlook and offers clues on the outcome of future votes.

GBP – Official Bank Rate – 12:00 pm

The interest rate at which the Bank of England lends to financial institutions overnight. Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future.

An actual value of 0.50% confirms a forecast of the same value.       

GBP – BOE Gov Carney Speaks – 12:30 pm

BOE Governor Mark Carney is due to hold a press conference, along with other MPC members, about the Inflation Report, in London.

As head of the central bank, which controls short term interest rates, he has more influence over the nation’s currency value than any other person.

Traders scrutinise his public engagements as they are often used to drop subtle clues regarding future monetary policy.

Friday, 3 August 2018

 

AUD – Retail Sales m/m – 2:30 am

Measures the change in the total value of sales at the retail level.

The report acts as the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

An actual value of 0.4% beats a forecast of 0.3%.

GBP – Services PMI – 9:30 am

Shows the level of a diffusion index based on surveyed purchasing managers in the services industry. The survey serves as a leading indicator of economic health—businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.

An actual value of 55.1 outperforms a forecast of 54.0.       

CAD – Trade Balance – 1:30 pm

Shows the difference in value between imported and exported goods during the reported month.

Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation’s exports. Export demand also impacts production and prices at domestic manufacturers.

A positive number indicates that more goods were exported than imported. An actual value of -2.8 billion starkly underperforms when pitted against a forecast of -2.2 billion.

USD – Average Hourly Earnings m/m – 1:30 pm

Represents the shift in the price businesses pay for labor, excluding the farming industry.    The report is a leading indicator of consumer inflation—when businesses pay more for labor the higher costs are usually passed on to the consumer.

An actual value of 0.2% fails to meet a forecast of 0.3%.           

USD – Non-Farm Employment Change – 1:30 pm

Reflects the change in the number of employed people during the previous month, excluding the farming industry. This is vital economic data released shortly after the month ends. The combination of importance and earliness makes for hefty market impacts.

An actual value of 213 thousand people outperforms a forecast of 195 thousand.            

USD – Unemployment Rate – 1:30 pm

Represents the percentage of the total workforce that is unemployed and actively seeking employment during the previous month.

An actual value of 4.0% underperforms compared to a forecast of 3.8%.       

USD – ISM Non-Manufacturing PMI – 3:00 pm

Shows the level of a diffusion index based on 400 surveyed purchasing managers, excluding the manufacturing industry.

The respondents are asked to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

An actual index value of 59.1 outperforms a forecast of 58.3.

For more detailed information, please visit our Economic Calendar.