Forex Outlook For August 14, 15, 16, 17, 18, 19, 2016
The U.S. dollar saw some amount of volatility last week after the country reported some encouraging economic data in the week before that. The retail sales data caused a great deal of disappointment with the consumer spending coming in less than that anticipated by economists and consumer confidence hardly rising. This indicates that the time is not yet ripe for a rate hike and that another pushback could be a better option. The key economic data scheduled for release this week include UK and US inflation data, UK employment figures and minutes of the monetary policy committee meeting from the US, Australia and New Zealand.
#1: Japan Preliminary GDP Data (08/14/2016 Sunday 23:50 GMT)
The preliminary GDP data for the first quarter showed that Japan has just managed to dodge a recession. The economy grew 0.4 percent in the first three months on quarter-on-quarter basis on stronger consumer spending. On an annualized basis, the growth was 1.7 percent. In the last quarter of 2015, Japan’s economy contracted 0.3 percent. The positive GDP data for the first quarter is likely to rekindle BoJ’s plans to increase consumption tax gain. However, the Japanese economy continues to struggle with a stronger yen hurting wages, consumer confidence and corporate earnings. This shows that growth plans implemented by Abe after his election have not been very effective. Further, BoJ’s rate policy does not have any impact on the economy despite an increase in consumer demand. In the second quarter, GDP is expected to expand by 0.2 percent.
#2: Australia Monetary Policy Meeting Minutes (08/16/2016 Tuesday 1:30 GMT)
In the meeting held on August 2, 2016, the Reserve Bank of Australia cut the cash rate to 1.50 percent. The minutes of the meeting will be released on Tuesday.
#3: UK Inflation Data (08/16/2016 Tuesday 8:30 GMT)
In June, consumer prices in the UK rose 0.5 percent after recording lukewarm increases in the preceding months. The cost of living rose because of an increase in air fares, driving costs and cost of computer games. According to analysts, inflation is likely to reach the 2 percent target in 2017 following the Brexit and a rebound in commodity prices. CPI is expected to increase 0.5 percent in July.
#4: German ZEW Economic Sentiment (08/16/2016 Tuesday 9:00 GMT)
In July, investor sentiment in Germany fell to minus 6.8, the lowest since November 2012, because of political and economic uncertainty caused by Brexit from 19.2 in the previous month. The reading was also lower than 8.2 predicted by analysts. Responders expressed concern about export prospects and stability of banks in Europe. The index is expected to be at 2.1 in July.
#5: Canada Manufacturing Sales (08/16/2016 Tuesday 12:30 GMT)
Canada’s manufacturing sales, on a seasonally adjusted basis, fell 1 percent in May. Analysts expect that manufacturing sales would increase 0.8 percent in June.
#6: US Building Permits (08/16/2016 Tuesday 12:30)
In June, the number of building permits issued increased by 1.5 percent (seasonally adjusted annual rate) in June after declining for the two previous months. Housing starts rose 4.8 percent to 1.189 million units. A stronger labor market boosted the housing market. Analysts expect that 1.16 million building permits will be issued in July.
#7: US CPI and Core CPI (08/16/2016 Tuesday 12:30 GMT)
In June, consumer prices rose 0.2 percent, the fourth month in a row, on higher housing, health care and gasoline costs. This indicates that inflationary pressures are steadily rising. Analysts expected an increase of 0.3 percent. Core CPI increased 0.2 percent in June. The Fed has not raised the interest rate because of the prevailing low inflation levels. Currently, the inflation stands at 1.6 percent against the target of 2 percent. While the CPI is expected to remain flat in July, core CPI is likely to increase 0.2 percent.
#8: New Zealand GDT Price Index (08/16/2016 Tuesday 22:45 GMT)
According to a report published on August 3, 2016, the GDT price index jumped 6.6 percent to US$2,436 from US$2,336 at the auction held two weeks ago.
#9: New Zealand Employment Change and Unemployment Rate (08/16/2016 Tuesday 22:45 GMT)
In the first quarter of 2016, employment rose 1.2 percent from the previous quarter to 2,399,000. Analysts expected an employment growth of 0.6 percent. Meanwhile, the unemployment rate rose to 5.7 percent from 5.4 percent in the previous quarter. However, the growth in participation rate was the highest in more than 11 years. It is expected that New Zealand’s job market will grow 0.6 percent and unemployment rate will slide to 5.3 percent in the second quarter.
#10: New Zealand Input Producer Prices (08/16/2016 Tuesday 22:45 GMT)
Input producers prices declined 1 percent on quarter-on-quarter basis in the first quarter of 2016, easing from the 1.2 percent drop recorded in the previous quarter.
#11: UK Claimant Count Change and Average Earnings Index (08/17/2016 Wednesday 8:30 GMT)
The number of people filing for unemployment benefits rose by 400 (less than expected) in June, after recording an increase of 12,200 in May, suggesting a positive trend in the labor market. The unemployment rate is the lowest since 2005. Further, average weekly earnings, excluding bonuses, increased by 2.3 percent in May from a year ago. In the latest report, the number of people filing for unemployment benefits is expected to rise by 5,200 and the earnings by 2.5 percent.
#12: US Crude Oil Inventories (08/17/2016 Wednesday 14:30 GMT)
Crude oil inventories rose by 1.1 million barrels in the last week though analysts expected it to decline by 1.3 million barrels. The current gain in oil inventories is likely to bring down oil prices further.
#13: US FOMC Meeting Minutes (08/17/2016 Wednesday 18:00 GMT)
The minutes of the July meeting, wherein the Fed maintained its monetary policy, will be released on Wednesday. The Fed acknowledged an improvement in the economy, but remained very cautious. The minutes would reveal the internal debate and reflect Fed’s current tone.
#14: Australia Employment Data (08/18/2016 Thursday 1:30 GMT)
Unemployment rate in Australia rose to 5.8 percent in June from 5.7 percent in the previous month. Meanwhile, the job market added as many as 7,900 jobs, but fell short of analysts expectation of a job increase of 10,000. It is expected that the unemployment rate will remain at the 5.8 percent level in July. However, the labor market is expected to add 10,200 jobs.
#15: US Philly Fed Manufacturing Index (08/18/2016 Thursday 12:30 GMT)
In July, the manufacturing index for the Philadelphia area dropped to minus 2.9 after rising 4.7 points in the prior month. After registering two months of contraction, new orders rose 11.8 points on the back of an improvement in backlog orders, which surged from minus 12.6 to plus 1.9. This is the first positive reading in a year and it indicates the future growth in employment as well as shipments. Shipments rose to 6.3, recording the first positive data since the month of March. However, employment remained weak with a reading of minus 1.6. In spite of the low employment reading, the report offers a great deal of hope for a strong figure in the future. In August, the manufacturing index is likely to hit the 1.4 points mark.
#16: US Unemployment Claims (08/18/2016 Thursday 12:30 GMT)
The number of people filing claims for unemployment benefits dropped last week to 266,000, suggesting that the labor market is likely to be strong in early August and a growth in the economy. For the previous week, the number of jobless claims was revised downward by 2,000 to 267,000. With this the claims have remained below the 300,000 mark continuously for 75 weeks. Analysts expect that the new claims for the coming week is likely to be 269,000.
#17: Canada Core CPI (08/19/2016 Friday 12:30 GMT)
In June, Canada’s Core CPI rose 2.10 percent on year-over-year basis, higher than the 2 percent increase predicted by the analysts. The increase in Core CPI was the same in the previous month. The forecast for July is the same 2.1 percent increase.
#18: Canada Core Retail Sales (08/19/2016 Friday 13:30 GMT)
In Canada, retail sales grew by 0.2 percent on a monthly basis in May 2016 after it was revised downward to a 0.8 percent gain in the previous month. The market expected retail sales to remain flat. In June, retail sales is expected to grow by 0.4 percent.