Forex Market Outlook For The Week June 10 – 14, 2019

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Trade wars continued to rattle the markets and the EUR/USD pair remained volatile because of dovish ECB decision on interest rates and the Non-Farm Payrolls data from the US. Last week, China and the U.S. intensified their rhetoric on trade tariffs and blamed each other for the failure of talks. The operations of companies in these countries remained limited as both countries threatened additional sanctions. This weighed down the markets, raising concerns as regards a global recession. Further, the chances of the Fed cutting the interest rates have risen.

The key releases scheduled for the upcoming week include retail sales, inflation, and consumer confidence data from the US stand out. Here is an outlook for a few important releases from around the world:

#1: U.K. GDP (06/10/2019 Monday 08:30 GMT)

The British economy contracted 0.1 percent in March after expanding 0.2 percent in the previous month. Indexes of services, construction, and agriculture declined, while those for production and manufacturing increased. Forecast for April 2019: -0.1 percent

#2: U.K. Manufacturing Production (06/10/2019 Monday 08:30 GMT)

forex market outlookIn the U.K., manufacturing production rose by 0.9 percent in March after recording a gain of 1.0 percent in February. Forecast for April 2019: manufacturing production is expected to decline by 1.1 percent

#3: U.K. Average Earnings Index (06/11/2019 Tuesday 08:30 GMT)

Total earnings of workers in the UK, including bonuses, rose by an annualized 3.2 percent during the three-month period to March, down from the 3.5 percent increase reported for the prior period. Analysts had expected earnings to increase by 3.4 percent. This is the slowest rise in earnings including bonuses ever since the three-month period to September last year. Growth in earnings slowed down for all sectors, including the private sector, public, services, finance and business services, and manufacturing, among others. For the month of March, growth in wages slowed to the 2.3 percent level after the reading for the prior month was revised upward to an increase of 3.3 percent. Excluding bonuses, earnings rose 3.3 percent, easing from the 3.4 percent increase in the prior period. In real terms, wage growth including and excluding bonuses rose by 1.3 percent and 1.5 percent, respectively. Forecast for April 2019: 2.9 percent growth in earnings including bonuses

#4: U.S. CPI and Core CPI (06/12/2017 Wednesday 12:30 GMT)

In the U.S., consumer prices increased 0.3 percent in the month of April, missing analysts’ expectations for a gain of 0.4 percent. Consumer prices eased from the largest increase since January of 0.4 percent recorded in March. Energy prices increased sharply driven by gasoline and fuel oil prices. On the other hand, food prices declined for the very first time ever since June 2017. Core consumer prices, which exclude food and energy, rose 0.1 percent on a month-on-month basis in April. The indexes for medical care, education, shelter, and new vehicles advanced, while the indexes for trucks and used cars, household furnishings and operations, and apparel declined. CPI and Core CPI forecast for May 2019: 0.1 percent and 0.2 percent respectively

#5: Australia Employment Change and Unemployment Rate (06/13/2019 Thursday 01:30 GMT)

Australia added 28,393 jobs in the month of April. On a seasonally adjusted basis, the unemployment rate rose to 5.2 percent after the figure for the prior month was revised upward to 5.1 percent. Analysts had expected the unemployment rate to come in at 5.1 percent. This was the highest unemployment rate ever since August 2018 as the number of unemployed persons increased by 21,200. Forecast for May 2019: Australia is expected to add 16,000 jobs and the unemployment rate is likely to slip to the 5.1 percent level

#6: Switzerland SNB Monetary Policy Assessment (06/13/2019 Thursday 07:30 GMT)

The Swiss National Bank releases the Monetary Policy Statement on a quarterly basis. The central bank of Switzerland uses it as a tool to communicate with investors as regards the monetary policy. It provides the outcome of the members’ decision on setting interest rates and commentary on the economic conditions that impacted their decision. More importantly, it provides an economic outlook and offers clues on future interest rate decisions.

#7: Switzerland SNB Press Conference (06/13/2019 Thursday 08:00 GMT)

The Chairman and the Governing Board Members of the Swiss National Bank hold a press conference twice a year, in June and December, after the announcement of the interest rate. The press conference lasts for about an hour and has two parts. In the first part, the concerned authorities read out prepared statements. The second part is all about answering questions posed by the press. As the questions can often prompt the authorities to provide unscripted answers, heavy market volatility can be expected.

#8: U.S. Retail Sales and Core Retail Sales (06/14/2019 Friday 12:30 GMT)

In the United States, retail trade declined 0.2 percent on a month-on-month basis in April 2019 after the reading for the prior month was revised upward to an increase of 1.7 percent. The increase in retail sales in March was the highest for a period of 18 months. The retail trade figure for April came in below analysts’ expectations for an increase of 0.2 percent. The declines in the sale of motor vehicles, clothes, building materials, and appliances led to the drop in retail trade. Forecast for May 2019: an increase of 0.7 percent is on the cards

Core retail trade, which excludes autos, increased 0.1 percent in April, following the upward revision of last month’s reading to a gain of 1.3 percent. The reading for the month, however, missed analysts’ expectations for a gain of 0.7 percent. Forecast for May 2019: an increase of 0.5 percent is on the cards

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