The U.S. dollar rose for most of last week of the first quarter of 2018, consolidating the gains posted in the prior week. The Greenback registered further, following the release of a very strong ADP payrolls data. However, the release of the jobs numbers on last day of the week pulled the dollar down to its levels at the beginning of the week. The currency pressures EUR/USD and GBP/USD bounced back from their key support levels. Going into the upcoming week the greenback is likely to remain vulnerable to price pressure.
The big-ticket items on the economic calendar for the upcoming week are scheduled for release on Wednesday. March inflation data will be released early morning in the U.S. and the minutes of the Fed’s rate hike meeting in March is due to be published later in the day. Here is an outlook on the releases for the next week:
#1: Bank of Canada Business Outlook Survey (04/09/2018 Monday 14:30 GMT)
The Bank of Canada releases the Business Outlook Survey report on a quarterly basis. This is a highly respected report because of its source and timing with respect to interest rate decisions. The regional offices of the central bank interview senior managers from about 100 firms that are selected on the basis of the composition of the gross domestic product of Canada. The purpose of the survey is to understand the perspectives of the businesses on topics such as capacity pressures and demand.
The Business Outlook Survey report released in January this year showed that the business sentiment remained positive during the winter season. The sales outlook was healthy, even though there was some amount of moderation. Further, the capacity and labor pressures became more apparent. They stimulated the employment and investment plans of companies. The Business Outlook Survey index rebounded to near its peak level in summer which was in line with the widespread positive sentiment.
#2: U.S. PPI (04/10/2018 Tuesday 12:30 GMT)
In the U.S., the producer prices of final demand goods rose by 0.2 percent in the month of February, following on the 0.4 percent increase registered in January. The reading for the month came in above analysts’ expectation for a 0.1 percent increase. Services prices rose at the same pace as in the previous month driven by higher hotel accommodation, healthcare, and bundled wired telecommunications costs as well as airline fares. On the other hand, goods prices dropped for the first time since May last year after registering an increase in January. The final demand goods prices (less prices of food, energy, and trade services) rose by 0.4 percent, the same rate as in the previous month.
#3: Reserve Bank of Australia Governor Philip Lowe Speaks (04/11/2018 Wednesday 05:05 GMT)
Philip Lowe, Governor of the Reserve Bank of Australia, is scheduled to speak on the recent developments in the Australian and global economies in Perth at the Australia-Israel Chamber of Commerce. The audience is expected to ask questions. Markets often remain volatile during his speeches because traders make an attempt to understand the direction of interest rate decisions.
#4: U.K. Manufacturing Production (04/11/2018 Wednesday 08:30 GMT)
In the U.K., manufacturing production rose by 2.7 percent on a year-on-year basis in the month of January after increasing 1.4 percent in the previous month. However, the reading came in slightly below analysts’ expectation of 2.8 percent gain. On a month-on-month basis, factory output increased just 0.1 percent, following the 0.3 percent increase in the prior month. However, it marked the growth in manufacturing for the ninth month in a row. This for the first time manufacturing production growth has been sustained for such a long time since 1968. The monthly growth in manufacturing production was attributed to an increase of 1.9 percent in transport equipment production. Forecast for February: an increase of 0.2 percent
#5: European Central Bank President Mario Draghi Speaks (04/11/2018 Wednesday 11:00 GMT)
Mario Draghi, President of European Central Bank, is scheduled to speak in Frankfurt at the Generation €uro Students’ Award Ceremony. Questions from the audience are expected. Markets often experience volatility during his speeches. This is because traders make an attempt to understand the direction of interest rates.
#6: U.S. CPI/Core CPI (04/11/2018 Wednesday 12:30 GMT)
In the U.S., consumer prices rose by 0.2 percent on a month-over-month basis in February, easing from the 0.5 percent increase recorded in January. However, the reading for the month matched with analysts’ estimate. Prices increased for shelter, motor vehicle insurance, and apparel, while they remained unchanged for food. Prices increased slightly for energy.
The core CPI, which excludes food and energy prices, rose by 0.2 percent, following the 0.3 percent increase in the previous month. Prices of shelter, apparel, and motor vehicle insurance, household operations and furnishings, education, airline tickets, and personal care products increased in February.
Forecast for CPI and Core CPI in March 2018: no change and 0.2 percent increase, respectively
#7: U.S. Crude Oil Inventories (04/11/2018 Wednesday 14:30 GMT)
In the U.S., crude oil stocks declined 4.617 million barrels during the week that ended on March 30, following the 1.643 million barrels increase in the prior week. Analysts had expected the crude oil stocks to increase by 1.4 million barrels. This is the largest decline in eleven weeks. Gasoline stocks also dropped 1.116 million barrels, following the 3.472 million barrels decline in the prior week. Analysts had expected a higher decline of 1.5 million barrels.
#8: U.S. Federal Open Market Committee Meeting Minutes (04/11/2018 Wednesday 18:00 MT)
The U.S. Federal Open Market Committee (FOMC) releases the minutes eight times in a year, three weeks after the announcement of the Federal Funds Rate. It provides a detailed account of the most recent meeting of the FOMC and an in-depth insight into the financial and economic conditions that impacted the members’ vote on setting interest rates.
#9: Bank of Japan Governor Haruhiko Kuroda Speaks (04/12/2018 Thursday 00:30 GMT)
Haruhiko Kuroda, Governor of the Bank of Japan, is scheduled to speak in Tokyo at the quarterly branch manager’s meeting. Markets often remain volatile during his speeches. This is because traders make an attempt to understand the direction of interest rates.
#10: European Central Bank Monetary Policy Meeting Accounts (04/12/2018 Thursday 11:30 GMT)
The European Central Bank (ECB) releases an account of the monetary policy meeting eight times in a year four weeks after the announcement of the Minimum Bid Rate. It provides a detailed account of the ECB Governing Board’s most recent meeting and an in-depth insight into the financial and economic conditions that impacted the members’ decision on setting interest rates.
#11: Bank of England Governor Mark Carney Speaks (04/12/2018 Thursday 19:00 GMT)
Mark Carney, Governor of the Bank of England, is scheduled to deliver the closing remark in Toronto at the Public Policy Forum’s Growth Summit. Markets often remain volatile during his speeches as the traders make an attempt to understand the direction of interest rates.