Last week, it looked as though the U.S. dollar was seeking a new direction. Overall, the Greenback had a mixed week. Trump’s troubles, which have an effect on things that the markets worried about (spending on infrastructure and Gary Cohn’s candidature for Fed Chair), impacted the U.S. dollar. The relatively dovish minutes of the interest rate meeting did not support the dollar either. However, the retail sales data beat market expectations.
In Japan, the country’s GDP grew more than what the analysts expected. However, the yen declined because of North Korea tension. The euro declined during the start of the trading week but recovered towards the end. The pound was upbeat initially because of positive retail sales and wages data but struggled as inflation data missed market expectations. Meanwhile, a strong Australian jobs market supported the Aussie.
The last week of August features U.S. durable goods orders and housing data, among others. Here is an outlook for the next week:
#1: Canada Retail Sales/Core Retail Sales (08/22/2017 Tuesday 12:30 GMT)
In Canada, retail sales rose by 0.6 percent on a month-over- month basis in May after the reading for the previous month was revised downward to an increase of 0.7 percent. The reading for May came in well above analysts’ expectation for an increase of 0.2 percent.
Core retail sales, which exclude sales of vehicles, declined 0.1 percent on a month-over-month basis after the reading for April was revised downward to an increase of 1.3 percent. The figure for May, however, came in below analysts’ expectation for a flat reading. Forecast for June: 0.3 percent increase
#2: European Central Bank President Mario Draghi Speaks (08/23/2017 Wednesday 7:00 GMT)
Mario Draghi, president of European Central Bank is scheduled to deliver opening remarks at the sixth Lindau Meeting on Economic Sciences to be held in Germany. Volatility can be expected during his speeches. This is because traders try to decipher clues on the direction of interest rates in future.
#3: Crude Oil Inventory Changes (08/23/2017 Wednesday 14:30 GMT)
Of late, the weekly report on crude oil stocks change has mostly revealed drawdowns. For oil bulls, this is positive data. However, inventories continue to remain high. Further, the dollar has an inverse relationship with oil prices. Crude oil stocks dropped for the seventh week in a row last week. The drawdown was the largest in about a year. Production and export of oil continued to rise. According to the Energy Information Administration, crude oil inventories declined by 8.95 million barrels during the week that ended on August 11, nearly three times more than the analysts’ expectation for a drop of 3.1 million barrels. This is the largest decline since the week that ended on to September 2, 2016. Oil prices slumped despite the big draw because of increase in production and higher inventory levels. Forecast for the next reporting period: decline by 0.76 million barrels
#4: U.K. GDP Second Estimate (08/24/2017 Thursday 8:30 GMT)
Britain’s economy expanded 0.3 percent on a quarter-over-quarter basis in the second quarter of 2017, following the 0.2 percent recorded in the previous quarter, according to the preliminary estimate. The reading for the second quarter was in line with the analysts’ expectation. Economic growth was mainly driven by the services sector. While the retail trade and film production and distribution services grew, construction and manufacturing services contracted.
In general, economic growth has slowed down in the U.K. in 2017. It was strong in 2016. It seems as though the Brexit has started biting. Second estimate forecast: 0.3 percent
#5: U.S. Unemployment Claims (08/24/2017 Thursday 12:30 GMT)
The number of American people filing for jobless benefits dropped by 12,000 to 232,000 during the week that ended on August 12 from the unrevised reading of 244,000 for the prior week. The reading for the week came in below analysts’ expectation that the number of people applying for jobless benefits would be 240,000. This is the lowest level since the week that ended on February 25 when the number of claims was 227,000 (the best since March 1973). Meanwhile, the four-week moving average number of claims, which eliminated weekly volatility) dropped by 500 to 240,500. Forecast for the next period: 237,000
#6: U.S. Durable Goods Orders (08/25/2017 Friday 12:30 GMT)
New orders for durable goods manufactured in the U.S. jumped 6.5 percent, reversing two consecutive months of decline, on a month-over-month basis in June after the figure for the previous month was revised downward to a decline of 0.1 percent. This is the biggest increase since July 2014. The reading for June beat market expectation for a 3.0 percent increase in durable goods orders.
Core durable goods orders, which is closely watched for deciding business spending plans, declined 0.1 percent. This suggested that equipment spending might moderate in the coming months. The drop in June was the first since December last year and followed the 0.7 percent increase in May, the biggest rise since January this year. Forecast for July: 0.4 percent increase
#7: European Central Bank President Mario Draghi Speaks (08/25/2017 Friday 19:00 GMT)
Mario Draghi, president of the European Central Bank, is scheduled to speak at the Federal Reserve Bank of Kansas City Economic Symposium to be held in Jackson Hole. Markets often remain volatile during his speeches because traders make an attempt to understand the future course of interest rate decisions.