The greenback made some handsome gains last week, taking advantage of upbeat economic data and trade wars. The U.S. is going forward with the preparation of new tariff rates for Chinese goods worth $200 billion. There is also a possibility that the U.S. and China may enter negotiations. This news drove risk currencies lower and other currencies were also impacted. USD/JPY pair made big gains as the stock markets digested the news. The U.S. dollar also benefitted from rising inflation. The Core CPI reached 2.3 percent as analysts expected. Powell’s statement that he enjoys sound sleep at night when referring to the country’s economic situation also helped the dollar a great deal. The minutes of the monetary policy meeting of the European Central Bank was dovish and England witnessed the political drama. The U.K. government is in favor of a softer Brexit, but the dissent within the cabinet led to the resignation of two key ministers David Davis and Boris Johnson. The Canadian central bank raised rates and indicated more raises are in the offing. However, the policymakers expressed concern about the trade.
The key releases in the U.S. during the upcoming week include retail sales and the testimony by the Fed Chair Jerome Powell. A meeting between Putin and Trump is also set to take place during the week. Here is an outlook on some of the key releases from around the world:
#1: China GDP (07/16/2018 Monday 02:00 GMT)
China’s economy expanded 6.8 percent on a year-on-year basis in the first quarter of this year, the same rate as in the third and fourth quarters of last year. The reading for the March quarter was in line with analysts’ expectation. The growth was mainly supported by a solid increase in consumption, exports, and property investment. Forecast for the second quarter of 2018: 6.7 percent
#2: U.S. Retail Sales and Core Retail Sales (07/16/2018 Monday 12:30 GMT)
In the U.S., retail trade increased 0.8 percent on a month-over-month basis in May after the reading for the prior month was revised upward to an increase of 0.4 percent. The reading for March easily beat analysts’ expectation of 0.4 percent gain. The increase in retail trade in March was the steepest ever since November last year. The retail trade was driven higher because of higher sales at gasoline stations and motor vehicles and parts dealers. Core retail sales, which exclude autos, came in at 0.9 percent, up from 0.4 percent in the previous month. Analysts had expected the reading to come in at 0.5 percent. Forecast for June 2018: Retail sales and core retail sales are expected to increase by 0.4 percent, respectively
#3: New Zealand CPI (07/16/2018 Monday 22:45 GMT)
In New Zealand, the consumer prices increased 0.50 percent in the month of March from that of the previous month. Forecast for June quarter: 0.5 percent
#4: Australia RBA Monetary Policy Meeting Minutes (07/17/2018 Tuesday 01:30 GMT)
The Reserve Bank of Australia releases the Minutes of the Monetary Policy Meeting eleven times in a year, two weeks after the announcement of the Cash Rate. It provides a detailed account of the most recent meeting of the Reserve Bank Board. It also offers in-depth insight into the economic conditions that impacted their decision when setting interest rates.
#5: U.K. BoE Governor Mark Carney Speaks (07/17/2018 Tuesday 08:00 GMT)
Mark Carney, Governor of the Bank of England, is scheduled to testify, along with Jon Cunliffe, Deputy Governor of the Bank of England, before the Treasury Select Committee in Hampshire on the Financial Stability Report. Markets often remain volatile during his speeches as traders make attempt to understand the direction of interest rates.
#6: U.K. Average Earnings Index (07/17/2018 Tuesday 08:30 GMT)
In the U.K., the total earnings of workers, including bonuses, increased 2.5 percent annually to £516 per week during the three months to April, down from the 2.6 percent rise in the prior period. The reading for the period also came in below analysts’ expectation of a 2.6 percent increase. The increase in workers’ earnings was the lowest since November last year.
Excluding bonuses, workers’ earnings rose by 2.8 percent to £484 per week after recording an increase of 2.9 percent in the prior period. Analysts had expected a 2.9 percent increase. In real terms, while earnings including bonuses rose 0.1 percent, earnings excluding bonuses increased 0.4 percent. With this, the earnings in real terms and with and without bonuses have increased for the third month in a row.
Forecast for the three months to May 2018: 2.5 percent increase including bonuses
#7: Fed Chair Jerome Powell Testifies (07/17/2018 Tuesday 14:00 GMT)
Jerome Powell, Fed Chair, is scheduled to testify before the Senate Banking Committee in Washington DC on the Semiannual Monetary Policy Report. The testimony has two parts: the reading of a prepared statement and a question and answers session. Markets may turn volatile during his speeches since the questions are not revealed beforehand.
#8: U.K. CPI (07/18/2018 Wednesday 08:30 GMT)
In the U.K., the consumer prices rose at a 2.4 percent annual rate in the month of May 2018, same pace as the one-year low reported in the prior month. The reading for the month, however, came in slightly below analysts’ expectation of 2.5 percent. Transport costs increased as fuel and lubricant prices rose. Prices increased at a slower rate for recreation and culture, housing and utilities, restaurants and hotels, and food and non-alcoholic beverages. Forecast for June 2018: an increase of 2.6 percent is on the cards
#9: U.S. Building Permits (07/18/2018 Wednesday 12:30 GMT)
In the U.S., the number of building permits issued fell 4.6 percent from on a monthly basis to a seasonally adjusted annual rate of 1,301,000 in the month of May against analysts’ expectation for a 1.4 percent decline to 1,350,000 permits. While single-family authorizations dropped 2.3 percent to 843,000, multi-family permits plunged 8.6 percent to 458,000. Across regions, the permits issued declined in the South and West. However, it rose in the Midwest and Northeast. Forecast for June 2018: 1,330,000
#10: U.S. Fed Chair Jerome Powell Testifies (07/18/2018 Wednesday 14:00 GMT)
Jerome Powell, Fed Chair, is scheduled to testify before the House Financial Services Committee in Washington DC on the Semiannual Monetary Policy Report. The testimony has two parts: the reading of a prepared statement and a question and answers session. Markets may turn volatile during his speeches since the questions are not revealed beforehand.
#11: U.S. Crude Oil Stocks Change (07/18/2018 Wednesday 14:30 GMT)
In the U.S., crude oil stocks declined 12.633 million barrels during the week that ended on July 6 after the 1.245 million increase in the prior week. This is the biggest decline in crude stocks ever since the week ended September 2. Analysts had expected a decline of 4.489 million barrels. In the meantime, gasoline stocks also fell by 0.694 million barrels against analysts’ expectation for a decline of 0.75 million barrels.
#12: Australia Employment Change and Unemployment Rate (07/19/2018 Thursday 01:30 GMT)
In Australia, employment rose by 12,000 in the month of May. The forecast for the next month is an increase of 16,600 jobs. On a seasonally adjusted basis, the unemployment rate in Australia unexpectedly fell to 5.4 percent from 5.6 percent in April. Analysts had expected the jobless rate to come in at 5.5 percent. This is the lowest unemployment rate ever since November last year. The number of jobless people in Australia declined 26,800. Forecast for June 2018: unemployment rate expected to remain at 5.4 percent
#13: U.K. Retail Sales (07/19/2018 Thursday 08:30 GMT)
In the U.K., retail trade rose by 1.3 percent on a month-over-month basis in May after the reading for the prior month was revised upward to an increase of 1.8 percent. The reading for the month came in above analysts’ expectation for a 0.5 percent increase. A period of better weather and Royal Wedding encouraged spending in household goods stores and food. Forecast for June 2018: 0.2 percent increase
#14: Canada Core CPI (07/20/2018 Friday 12:30 GMT)
In Canada, consumer prices increased 0.10 percent in the month of May on a month-on-month basis.
#15: Canada Core Retail Sales (07/201/2018 Friday 12:30 GMT)
In Canada, core retail sales rose to -0.10 percent in the month of April from -0.20 percent in the previous month.