Last week, the U.S. dollar lost ground against the major world currencies following the Federal Reserve’s significantly dovish remarks. The Fed said that it would hold the rate hikes for the time being. However, the central bank said that it is open to making modifications to its balance sheet reduction plan. The Fed’s move came on top of the slowdown in China, the shutdown of the U.S. government, and the Brexit.
Meanwhile, the British Parliament directed the government to strike a deal for Brexit and renegotiate the Irish backstop arrangement. The EU has rejected the scope for any fresh talks. If nothing happens before March 29th, then it will be a no-deal Brexit. Officially, Italy is in recession and in Germany retail sales has plunged.
In the upcoming week, the Bank of England’s rate decision stands out. Delayed U.S. data will also be rolled out. Here is an outlook on the key data scheduled to be released next week.
#1: Australia Retail Sales (02/05/2019 Tuesday 00:30 GMT)
In Australia, retail trade increased 0.4 percent on a month-over-month basis in November last year, following the 0.3 percent rise in the previous month. The reading for the month beat analysts’ expectations for an increase of 0.3 percent. This was the largest gain ever since June last year because of strong promotions and Black Friday sales. The increase was led by household goods sales and was followed by sales in footwear, clothing, and personal accessories; food retailing; and department stores sectors. Meanwhile, sales declined in other retail; and restaurant, cafes, and takeaway services sectors. Forecast for December 2018: Retail trade is expected to remain at the same level as in November
#2: Australia RBA Rate Statement (02/05/2019 Tuesday 03:30 GMT)
Released on the first Tuesday of every month, except January, the Rate Statement is one of the primary tools that the Reserve Bank of Australia uses to communicate with the investors as regards the monetary policy. In addition to providing information about the outcome of the most recent interest rate decision, it offers a commentary on the economic situation that impacted the members’ decision. More importantly, it provides an economic outlook and clues on future decisions.
#3: U.S. ISM Non-Manufacturing PMI (02/05/2019 Tuesday 15:00 GMT)
In the U.S., the non-manufacturing PMI declined to the 57.6 level in December last year from the 60.40 level in the previous month. The services sector performance report, published after the release of the Non-Farm Payrolls data, is expected to fall further in January to the 57.0 level this year because of the worsening global situation and the shutdown of the U.S. government.
#4: Australia RBA Governor Philip Lowe Speaks (02/06/2019 Wednesday 01:30 GMT)
Philip Lowe, Governor of the Reserve Bank of Australia, is scheduled to speak in Sydney at the National Press Club. Questions are expected from the audience. Markets often turn volatile during his speeches as traders try to understand the direction of interest rates in the future.
#5: New Zealand Employment Change (02/06/2019 Wednesday 21:45 GMT)
In New Zealand, employment rose by 1.10 percent on a quarter-on-quarter basis in the September quarter of last year. Forecast for the final quarter of 2018: an increase of 0.3 percent is on the cards
#6: New Zealand Unemployment Rate (02/06/2019 Wednesday 21:45 GMT)
In New Zealand, the unemployment rate dropped to the 3.9 percent level in the September quarter of last year after the reading for the prior period was revised downward to the 4.4 percent level. The reading for the quarter came in below analysts’ expectations of 4.5 percent. This was the lowest unemployment rate ever since the June quarter of 2008. The number of jobless people in the country dropped 13,000 to 109,000. Meanwhile, employment increased by 29,000 to 2.663 million. Forecast for the December quarter of 2018: 4.1 percent
#7: U.S. Fed Chair Jerome Powell Speaks (02/07/2019 Thursday 00:00 GMT)
Jerome Powell, Federal Reserve Chair, is scheduled to speak in Washington DC at a teachers’ meeting in the town hall. Markets often turn volatile during his speeches. This is because traders make an attempt to understand the direction of interest rates in the future.
#8: U.K. BoE Inflation Report (02/07/2019 Thursday 12:00 GMT)
The Bank of England’s inflation report provides a projection for economic growth and inflation over the next two years. These are the key factors that shape the nation’s monetary policy. Traders look for clues on the direction of interest rates.
#9: U.K. BoE MPC Official Bank Rate Votes (02/07/2019 Thursday 12:00 GMT)
The members of the Bank of England’s Monetary Policy Committee (MPC) voted unanimously (0-0-9) to hold the key Bank Rate at the current 0.75 percent level during the meeting held on December 20th. Policymakers said that there is an increase in the Brexit uncertainty and that inflation is likely to come down below the 2.0 percent target because of the fall in oil prices. Forecast for January 2019: 0.75 percent (0-0-9)
#10: U.K. BoE Monetary Policy Summary (02/07/2019 Thursday 12:00 GMT)
The Monetary Policy Committee of the Bank of England uses the Monetary Policy Summary report as a tool to communicate with investors as regards the monetary policy. It provides information as regards the outcome of their decision on interest rates and various other policy measures. It also provides a commentary on the economic conditions that impacted their decision. More importantly, it provides an economic outlook and clues on future decisions.
#11: Canada Employment Change (02/08/2019 Friday 13:30 GMT)
In Canada, employment increased by 9,300 in December last year after the record increase of 94,200 reported in the prior month. The reading for the month came in above analysts’ expectations for an addition of 5,500 jobs. Part-time jobs increased but full-time jobs declined. Newfoundland and Labrador added more jobs but jobs declined in Alberta, New Brunswick, and Prince Edward Island. Employment change was insignificant in the other provinces. Manufacturing, warehousing and transportation, and social assistance and health care hired more workers. The number of employed people in the public and private sectors remained unchanged. The number of self-employed people increased.
#12: Canada Unemployment Rate (02/08/2019 Friday 13:30 GMT)
In Canada, the unemployment rate came in at the 5.6 percent level in December last year and remained unchanged from the prior month. Analysts had expected the jobless rate come in at 5.7 percent.