Forex Market Outlook For The Week September 9 – 13, 2019

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Last week was tumultuous because of many reasons including the Brexit battle, escalation in trade wars, the Nonfarm Payrolls data release, and Jerome Powell´s speech. In the upcoming week, the focus will be on the European Central Bank as the central bank is all set to announce interest rates and the economic stimulus. Additionally, inflation and retail sales data are expected from the United States. Here is an outlook on some of the key releases for the next week:

#1: UK GDP (09/09/2019 Monday 08:30 GMT)

In the U.K., the GDP growth remained flat in the month of June as the services sector did not register any advancement for the fourth consecutive month. Further, the output from both the production and construction sectors contracted in June. The month-on-month GDP growth rate for April and May was revised downward by 0.1 percent each. The British economy contracted 0.2 percent in the June quarter of this year. Without the revisions for April and May, the GDP for the second quarter would have been -0.1 percent.

Forecast for July 2019: GDP is expected to expand by 0.1 percent

#2: UK Manufacturing Production (09/09/2019 Monday 08:30 GMT)

forex market outlookIn the U.K., manufacturing production declined 0.1 percent on a month-on-month basis in June after the reading for the previous month was revised downward to an increase of 1.2 percent. Analysts had expected industrial production to decline by 0.2 percent. Output fell for coke and refined petroleum products; chemicals and chemical products; basic metals and metal products; and computer, electronic, and optical products. Additionally, production slowed down in sectors such as electricity, gas, steam, and air conditioning; and water supply and mining and quarrying.

Forecast for July 2019: Manufacturing production is expected to decline by 0.3 percent

#3: China New Loans (09/09/2019 to 09/15/2019)

China releases on a monthly basis, 11 days after the end of a month, the value of the new yuan-denominated loans that have been issued to consumers as well as businesses during the prior month. Traders look forward to this report because of the correlation between borrowing and spending. Consumers and businesses seek credit when there is confidence in the future financial position and they feel comfortable about spending money.

#4: US Crude Oil Inventories (09/11/2019 Wednesday 14:30 GMT)

In the US, crude oil stocks declined 4.771 million barrels during the week that ended on August 30, following the 10.027 million barrels plunge in the prior week. Analysts had expected stocks to drop by 2.488 million barrels. Gasoline inventories declined 2.396 million barrels, following the 2.09 million barrels drop in the previous period.

#5: Euro Area ECB Main Refinancing Rate (09/12/2019 Thursday 11:45 GMT)

The European Central Bank decided to keep the interest rates steady at the current levels during the meeting held on July 25. The main refinancing and deposit rates were held steady at 0 and -0.4 percent, respectively. However, the policymakers changed the forward guidance and said that they expect rates to continue to remain at the current or lower levels through the first six months of next year. The central bank also pointed out that it is in the process of preparing for more quantitative easing. They also said that the task has been assigned to the relevant Eurosystem Committees for examining options.

Forecast for September 2019: 0.00 percent

#6: Euro Area ECB Monetary Policy Statement (09/12/2019 Thursday 11:45 GMT)

Scheduled 8 times in a year, the European Central Bank often changes the statement a little at each release. Traders focus on these changes. The central bank uses the Monetary Policy Statement for communicating with investors as regards the monetary policy. The Statement provides the outcome of their interest rate decision and commentary on the economic conditions that impacted their decision. More importantly, it provides an economic outlook and offers clues on future decisions.

#7: Euro Area ECB Press Conference (09/12/2019 Thursday 12:30 GMT)

The President and Vice President of the European Central Bank hold a press conference approximately 45 minutes after the announcement of the Minimum Bid Rate. The press conference lasts for an hour and has two parts. In the first part, they read a prepared statement. The conference is then opened to questions by the press. As the questions can lead to unscripted answers, heavy market volatility can be expected.

#8: US CPI and Core CPI (09/12/2019 Thursday 12:30 GMT)

In the US, the consumer prices rose by 0.3 percent on a month-on-month basis in July after registering a 0.1 percent increase in the previous month. The reading for the month came in line with analysts’ expectations. Energy prices rose 1.3 percent, driven by gasoline and electricity. Natural gas costs declined sharply. Shelter, medical care, airline ticket, household furnishings, apparel, and personal care product prices also increased. However, the prices of new vehicles declined. Food prices remained unchanged for the second consecutive month.

Excluding the costs of food and energy, inflation rose by the same 0.3 percent and this was very much in line with analysts’ expectations.

Forecast for August 2019: CPI and Core CPI are expected to rise by 01 percent and 0.2 percent, respectively

#9: US Retail Sales and Core Retail Sales (09/13/2019 Friday 12:30 GMT)

In the US, retail trade rose by 0.7 percent on a month-on-month basis in July after the reading for the prior month revised to represent an increase of 0.3 percent. The reading for the month beat analysts’ expectations that the retail trade will increase by 0.3 percent. The increase in retail sales was boosted by the increased purchase of several goods.

Excluding automobiles, retail advanced by 1.0 percent, following the revised 0.3 percent gain in June. Analysts had expected core retail trade to increase by 0.4 percent.

Forecast for August 2019: Retail sales and core retail sales are expected to register an increase of 0.2 percent and 0.1 percent, respectively

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