Last week the U.S. dollar surged towards the end of the week driven by rising yields. The question is whether this trend will continue? The retail sales data was mixed following a control group downgrade. Housing data was upbeat and the Fed also sounded optimistic on the economic outlook. In the U.K., the pound’s rally was disrupted by the stagnant wages. The euro-zone continued to show signs of an economic slowdown. The Bank of Canada expressed a little bit of caution and that weighed the loonie down. Meanwhile, a disappointing jobs report released by the Australian Bureau Statistics hurt the price of the country’s currency. By the close of the week, the yields of 10-year U.S. Treasury Bonds rose above the 2.90 percent level and helped the greenback record some solid gains. The optimism expressed by the Fed speakers as regards the interest rates also contributed to the dollar’s gains.
The major releases scheduled for the upcoming week include the GDP figures of both the U.S. and the U.K. and interest rate decisions from Japan and the euro-zone. Having said that here is an outlook on the key releases next week:
#1: Bank of Canada Governor Stephen Poloz Speaks (04/23/2018 Monday 19:30 GMT)
Stephen Poloz, Governor of the Bank of Canada, and Carolyn Wilkins, Senior Deputy Governor, are scheduled to testify in Ottawa before the House of Commons Standing Committee on Finance. Markets may remain volatile during his speech as traders try to decipher clues on interest rates.
#2: Australia CPI (04/24/2018 Tuesday 01:30 GMT)
Consumer prices in Australia remained subdued in the last quarter of 2017 as core inflation continued to stay below the below the target rate central bank for the second year in a row. The headline CPI rose 0.6 percent in final quarter of last year from the prior quarter, but missed analysts’ expectation for an increase of 0.7 percent. This leads investors to believe that there will not be an interest rate hike anytime soon. Forecast for the first quarter of 2018: 0.5 percent
#3: Australia Trimmed Mean CPI (04/24/2018 Tuesday 01:30 GMT)
The trimmed mean CPI for the final quarter of last year came in at 0.4 percent, at the same level as in the previous month, against analysts’ expectation of 0.5 percent. Forecast for the first quarter of 2018: 0.5 percent
#4: U.S. CB Consumer Confidence (04/24/2018 Tuesday 14:00 GMT)
In March, the Conference Board Consumer Confidence Index declined to 127.7 from 130.0 in the previous month. Analysts expected a reading of 131. The index broke the two-month streak of increase. The Present Situation Index dropped to 159.9 from 161.2, while the Expectations Index decreased to 106.2 from 109.2 in the prior month. Forecast for April 2018: 126
#5: U.S. Crude Oil Inventories (04/24/2018 Wednesday 14:30 GMT)
In the U.S., crude oil stocks declined 1.071 million barrels during the week that ended on April 13, following the 3.306 million barrels increase in the prior period. Analysts had expected a drop of 1.429 million barrels. In the meantime, gasoline stocks fell by 2.968 million barrels after increasing 0.458 million barrels in the prior week. Analysts expected a drop of 0.227 million barrels.
#6: Bank of Canada Governor Stephen Poloz Speaks (04/24/2018 Wednesday 20:15 GMT)
Stephen Poloz, Governor of the Bank of Canada, and Carolyn Wilkins, Senior Deputy Governor, are scheduled to testify in Ottawa before the Senate Standing Committee on Banking, Trade, and Commerce. Markets often remain volatile during his speeches as traders make an attempt to understand the direction of interest rates.
#7: European Central Bank Minimum Bid Rate (04/26/2018 Thursday 11:45 GMT)
The European Central Bank decided to hold the Minimum Bid Rate at 0 percent during the meeting held on March 8th as was widely expected by analysts. Policymakers reaffirmed that the asset purchases will be €30 billion per month until September 2018. The asset purchases will be extended, if necessary. The ECB maintained the deposit facility and marginal lending facility rates at -0.4 percent and 0.25 percent, respectively. Forecast for April 2018: 0.000 percent
#8: European Central Bank Press Conference (04/26/2018 Thursday 12:30 GMT)
The ECB holds a press conference 45 minutes after the announcement of the Minimum Bid Rate. The press conference, attended by the President and Vice President of ECB, lasts for about an hour. It has two parts: the reading of a prepared statement and questions by the press. As questions frequently lead to answers that are not scripted, heavy market volatility can be expected. Traders care about the press conference because it is one of the primary methods of the ECB to communicate with the investors as regards the monetary policy.
#9: U.S. Core Durable Goods Orders (04/26/2018 Thursday 12:30 GMT)
Core durable goods orders indicate the percentage increase in the value of the orders that the manufacturers of long-lasting goods received in a month from the prior month. It excludes the transport industry from the calculation. The growth rate impacts the price of the U.S.
The core durable goods orders increased by 1.2 percent in the month of February, reversing the 0.2 percent decline posted last month. This is against analysts’ expectation that core durable goods orders will decline by 0.4 percent. Forecast for March 2018: an increase of 0.5 percent
#10: Bank of Japan Policy Rate (04/27/2018 Friday 03:00 GMT)
The Bank of Japan decided to leave the short-term interest rate steady at -0.1 percent during the meeting in March. This was widely expected by the market. Policymakers also left the target yield of the 10-year government bond around zero percent. They also maintained upbeat economic projection ahead of Governor Haruhiko Kuroda’s new term. Forecast for April 2018: -0.10 percent
#11: Bank of Japan Monetary Policy Statement (04/27/2018 Friday 03:00 GMT)
This statement is one of the primary tools that the Bank of Japan uses for communicating with the investors as regards the monetary policy. It provides the outcome of the most recent meeting and a commentary on the current economic scenario that impacted their decision. More importantly, it provides an economic outlook and clues on future outcomes.
#12: Bank of Japan Outlook Report (04/27/2018 Friday 03:00 GMT)
The outlook report released in January this year showed that the Japanese economy is expected to continue to expand because of highly accommodative financial conditions and government’s stimulus measures in the past.
As the overseas economies are also growing at moderate rates, Japan would maintain growth at a rate that is a little above its potential in 2018. In the next fiscal 2019, the economy would continue to expand but the pace of growth is expected to decelerate because of the cyclical slowdown in fixed investments by businesses and due to the hike in the consumption tax.
The growth in consumer prices has been rather slow. However, it is expected that inflation will rise in the medium-term to long-term as the stance of firms gradually shift toward increasing prices and wages.
#13: Bank of Japan Press Conference (04/27/2018 Friday 04:00 GMT)
The Governor of the Bank of Japan holds a press conference after the announcement of the Policy Rate. The central bank uses it as a tool to communicate with investors as regards the monetary policy. The factors that impacted the interest rate decision in the most recent meeting are discussed in detail at the press conference. Other aspects covered in the press conference include the inflation, overall economic outlook, and clues on future decisions.
#14: Swiss National Bank Chairman Thomas Jordan Speaks (04/27/2018 Friday 08:00 GMT)
Thomas Jordan, Chairman of the Swiss National Bank, is scheduled to speak on the subject “Monetary policy and banking regulation” at the central bank’s General Meeting of Shareholders in Bern. Markets often turn volatile during his speeches as traders look for interest rate clues.
#15: U.K. Preliminary GDP (04/27/2018 Friday 08:30 GMT)
The British economy expanded by 0.4 percent on a quarter-on-quarter basis in the December quarter of last year. The second estimate was not revised at all. In the previous quarter, the economy expanded 0.5 percent. Fixed investments grew firmly in spite of the slowdown in business investments. However, net trade impacted growth negatively. Forecast for the first quarter of 2018: 0.3 percent expansion
#16: U.S. Advance GDP (04/27/2018 Friday 12:30 GMT)
America’s economy grew 2.9 percent (annualized final reading) on a quarter-on-quarter basis in the final quarter of 2017, which was higher than the second estimate of 2.5 percent growth. The final reading for the quarter beat analysts’ expectation for a 2.7 percent expansion. Private inventory investments and Personal consumption expenditures were revised upward. Forecast for the first quarter of 2018: 2.0 percent expansion
#17: Bank of England Governor Mark Carney Speaks (04/27/2018 Friday 14:00 GMT)
Mark Carney, Governor of the Bank of England, is scheduled to speak in London during the launch of the econoME education program of the central bank. Markets are likely to turn volatile during his speeches as investors try to decipher clues on the direction of interest rates.