In the last full week of the August month, the U.S. dollar lost ground against the major currencies around the world. As Janet Yellen did not provide any clue on monetary policy during the Jackson Hole speech, the dollar went tumbling down. Further, new and existing homes sales fell short of analysts’ expectations, but the numbers were not very discouraging. Further, President Trump’s ongoing troubles continued to put pressure on the dollar. In Europe, the business surveys data released were mixed, but the PMIs, in general, were positive. The pound was under pressure as the GDP of the U.K. was confirmed to be at the low level reported earlier. The EUR/GBP pair hit the highest level since 2009. The loonie and Aussie registered gained against the dollar.
The economic events scheduled for the upcoming week include the U.S. GDP update, consumer confidence, and the key Non-Farm Payrolls data. Here is an outlook on these releases:
#1: U.S. CB Consumer Confidence (08/29/2017 Tuesday 14:00 GMT)
In July, the Consumer Board Consumer Confidence Index came in at a 16-year high of 121.1, despite analysts’ expectation for a decline of the index to the 116.5 level. According to the director of Consumer Board Lynn Franco, consumers foresee that the current economic growth will continue well into the latter half of 2017. Forecast for August 2017: 120.3
#2: U.S. ADP Non-Farm Employment Change (08/30/2017 Wednesday 12:15 GMT)
In the U.S., the private businesses added 178,000 workers in the month of July compared to the reading of June, which was revised upward to 191,000. The reading also came in below the analysts’ expectation of 185,000 job additions. The service sector added as many as 174,000 jobs. The manufacturing sector added 4,000 jobs. Forecast for August: an addition of 186,000 jobs
#3: U.S. GDP Second Release (08/30/2017 Wednesday 12:30 GMT)
In the second quarter, the U.S. economy grew at an annualized rate of 2.6 percent, according to preliminary data released by the government last month. The figure for the first quarter of this year was revised downward to a growth of 1.2 percent. Further, the preliminary GDP reading for the second quarter matched with analysts’ expectations. The growth was driven by an increase in investment on equipment by businesses, federal government spending, and consumption. In the second estimate, the GDP growth rate is expected to be revised upward to 2.7 percent.
#4: Crude Oil Inventory Changes (08/30/2017 Wednesday 14:30 GMT)
In the U.S., crude oil stocks dropped by 3.327 million barrels during the week that ended on August 18, following a decline of 8.945 million barrels in the previous week, the largest drop since September 2016. Analysts had expected the crude stocks to decline by 3.45 million barrels. Gasoline stocks declined by 1.223 million barrels against analysts’ expectation for a decrease of 0.643 million barrels. Crude oil stocks are expected to decline by 0.2 million barrels.
#5: Australia Private Capital Expenditure (08/31/2017 Thursday 1:30 GMT)
In Australia, private capital expenditure rose by 0.3 percent on a quarter-on-quarter basis in the March quarter of this year after recording a 1.0 percent decline in the prior quarter. Investment increased for the first time in as many as five quarters. On a yearly basis, private capital expenditure dropped by 9.3 percent. Forecast for the second quarter: an increase of 0.2 percent
#6: Canada GDP (08/31/2017 Thursday 12:30 GMT)
Canada’s GDP expanded 0.9 percent on a quarter-on-quarter basis in the March quarter of this year after the reading for the prior period was revised upward to a growth of 0.7 percent. GDP growth was driven by an increase in vehicle purchases and an improvement in business investment. Exports declined. On a year-on-year basis, GDP grew at an annualized rate of 3.7 percent and beat market expectations for a growth of 3.6 percent. Forecast for the second quarter: 0.1 percent expansion
#7: U.S. Unemployment Claims (08/31/2017 Thursday 12:30 GMT)
The number of American people filing for jobless benefits increased by 2,000 to 234,000 during the week that ended on August 19 from the unrevised reading of 232,000 for the prior week. Analysts expected 238,000 people to file for unemployment benefits. The four-week moving average, which eliminates week-to-week volatility, dropped by 2,750 to the lowest since May 237,750 claims. Forecast for the next reporting period: 237,000
#8: China Caixin Manufacturing PMI (09/01/2017 Friday 1:45 GMT)
China’s Caixin Manufacturing PMI rose to the 51.1 level in July from the reading of 50.4 in June. The reading for the current period beat market expectation of 50.4. The PMI rose because factory activity expanded for the second straight month and at the fastest pace since March. While new orders and output increased the most in five months, new export orders increased at the second-fastest pace since September. Buying activity rose for the second straight month and contributed to an increase in input stocks. Forecast for August: 51.0
#9: U.K. Manufacturing PMI (09/01/2017 Friday 8:30 GMT)
On a seasonally adjusted basis, the IHS Markit/CIPS manufacturing PMI rose to 55.1 in the month of July after June’s reading was revised downward to 54.2. The figure for July came in above analysts’ expectation of the 54.4 level for the index. The growth was driven by an increase in new orders and export business. Output grew at the faster pace, employment increased and business sentiment remained positive. Input prices increased, but at the slowest rate in more than a year, and output prices rose for the fifteenth month in a row.
#10: U.S. Average Hourly Earnings (09/01/2017 Friday 12:30 GMT)
In the U.S., the average hourly earnings rose by 0.3 percent in the month of July from that for the previous month. The increase was in line with analysts” expectation. On a year-on-year basis, average hourly earnings increased by 2.5 percent. Forecast for August: an increase of 0.2 percent
#11: U.S. Non-farm Employment Change/Unemployment Rate (09/01/2017 Friday 12:30 GMT)
In the U.S., non-farm payrolls rose by 209,000 in July, but it was below the 231,000 (upwardly revised) reading reported for June. Analysts had expected an addition of 183,000 jobs. Employment rose in food services and drinking outlets, business and professional services, and health care segments. Forecast for August: an addition of 180,000 jobs
Meanwhile, the unemployment rate dropped to 4.3 percent in the month of July, which matched with the 16-year low registered in May. The number of jobless people in America remained unchanged at 7.0 million, but the labor force participation rate increased slightly to 62.9 percent. Forecast for August: 4.3 percent
#12: U.S. ISM Manufacturing PMI (09/01/2017 Friday 14:00 GMT)
The Manufacturing PMI reported by the Institute for Supply Management in the U.S. fell to the 56.3 level in July from 57.8 in the previous month. The index had registered the highest reading since August 2014 in June. Analysts had expected the PMI to come in at 56.5 because of a slow down in new orders, production, and employment. Forecast for August: 56.5