Last week, the U.S. dollar gained ground because of the hawkishness sentiment expressed by the Fed Chair Jerome Powell but gave away the gains after President Trump criticized the policy. Trump said he preferred that the interest rate remained lower and the greenback remained weaker. The U.S. dollar lost ground following his comments.
The U.S. President and the Russian President Vladimir Putin met in Helsinki. The meeting raised a few controversies but failed to rock the markets. The concerns as regards trade wars rose following warnings from both the International Monetary Fund and the prominent investor Larry Fink. However, the markets remained calm.
Meanwhile, Trump raised his bombast against China, talking about plans to impose tariffs on approximately $500 billion worth of Chinese goods that are exported to America. In the UK, talks about a “no-deal” Brexit, the turmoil in the parliament, and weak data weighed down the British pound.
The key economic data releases from around the world include the Euro Zone interest rate decision and the preliminary U.S. GDP figures for the second quarter. Here is an outlook for the upcoming week:
#1: Australia CPI (07/25/2018 Wednesday 01:30 GMT)
In Australia, the consumer prices increased 0.4 percent on a quarter-on-quarter basis in the first quarter of this year. The figure for the period came in lower than analysts’ expectation for an increase of 0.5 percent and the 0.6 percent rise reported in the previous quarter. According to the Australian Bureau of Statistics, higher prices for health and education contributed positively, but lower prices for footwear and clothing, and culture and recreation partially offset the gains. Forecast for the second quarter of 2018: consumer prices are expected to increase by 0.5 percent
#2: Australia Trimmed Mean CPI (07/25/2018 Wednesday 01:30 GMT)
In Australia, the core inflation rate, referred to as Trimmed Mean CPI, rose by 0.5 percent in the first quarter of this year, faster than the previous quarter, but same as the 0.5 percent increase expected by analysts. The release of this data can impact the Reserve Bank of Australia’s monetary policy decision. The central bank has not changed the interest rates for nearly two years. Forecast for the second quarter of 2018: an increase of 0.5 percent in Trimmed Mean CPI is expected
#3: U.S. Crude Oil Stocks Change (07/25/2018 Wednesday 14:30 GMT)
In the U.S., crude oil stocks rose by 5.836 million barrels during the week that ended on July 13, following the highest decline ever since September 2, 2016, of 12.633 million barrels reported in the prior week. Analysts had expected the crude oil stocks to decrease by 3.622 million barrels. Meanwhile, the gasoline stocks dropped by 3.165 million barrels against analysts’ expectation of 0.044 million barrels decline.
#4: Euro Zone ECB Main Refinancing Rate (07/26/2018 Thursday 11:45 GMT)
The European Central Bank decided to hold the benchmark refinancing rate at the 0.0 percent level during the meeting on June 14 and the policymakers said that the pace of the net asset purchases per month will be cut to €15 billion from the month of September and will be continued only till December this year. In addition, the central bank noted that it expects the key interest rates to remain at the level at least till the end of 2019 summer season.
#5: Euro Zone ECB Press Conference (07/26/2018 Thursday 12:30 GMT)
The President and Vice President of the European Central Bank are scheduled to hold a press conference 45 minutes after the announcement of the Minimum Bid Rate. The press conference lasts for an hour and has two parts. The first part is reading of a prepared statement and the second part is opening up the conference to questions by the press. Since the questions frequently lead to unscripted answers, heavy market volatility can be expected.
#6: U.S. Core Durable Goods Orders (07/26/2018 Thursday 12:30 GMT)
Orders for long-lasting goods manufactured in the U.S. provide an idea about investment and are viewed seriously by the Fed. The data for the month of June 2018, which completes the second quarter, is set to be released. This will feed into the GDP data to be released the next day. Durable goods orders declined 0.4 percent in the month of May. This volatile data is expected to bounce back, registering an increase of 2.7 percent in June. Core durable goods orders, which exclude transportation, remained flat in the previous period. It is expected to register a small increase of 0.5 percent in June.
#7: U.S. GDP (07/27/2018 Friday 12:30 GMT)
America’s economy grew at an annualized rate of 2.0 percent on a quarter-on-quarter basis in the first quarter of this year, below the 2.2 percent growth rate reported in the second estimate and against analysts’ expectation of 2.2 percent. The personal consumption expenditures and private inventory investments were revised downward in the final estimate. The preliminary second-quarter GDP estimate is expected to come in at 4.1 percent.