Last week, the U.S. dollar regained its upward momentum as analysts expected, recording the strongest gains since late April. The Federal Reserve came up with a hawkish monetary policy (Fed funds rate was raised to 2.0 percent) decision and a dovish decision by the ECB. This caused the EUR to lose ground against the U.S. dollar.
However, worries about trade tariff are expected to resurface next week as the markets have to reckon with the deepening fissures in the relationship between the top economies in the world that were evident at the G7 summit the growing friction between China and the US.
The White House appears to be intent on bullying its way as regards trade arrangements. The ensuing trade spat might significantly disrupt the critical supply chains and impact global growth. This, in turn, would trigger risk-off liquidation. If this happens, the greenback might enjoy another week of sharp gains.
Having said that, here is an outlook on the key economic data set for release during the upcoming week:
#1: Euro Area ECB President Mario Draghi Speaks (06/18/2018 Monday 17:30 GMT)
Mario Draghi, President of the European Central Bank, is scheduled to deliver the opening speech in Portugal at the European Central Bank Forum on Central Banking. The markets often remain volatile during his speeches as traders make an attempt to understand the direction of interest rates.
#2: Australia Monetary Policy Meeting Minutes (06/19/2018 Tuesday 01:30 GMT)
The Reserve Bank of Australia releases the minutes of the monetary policy meeting 11 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 Board of the RBA and an in-depth insight into the economic conditions that impacted their decision.
#3: Euro Area ECB President Mario Draghi Speaks (06/19/2018 Tuesday 08:00 GMT)
Mario Draghi, President of the European Central Bank, is scheduled to speak in Portugal at the European Central Bank Forum on Central Banking. The markets often remain volatile during his speeches as traders make an attempt to understand the direction of interest rates.
#4: U.S. Building Permits (06/19/2018 Tuesday 12:30 GMT)
The number of building permits issued in the U.S. dropped by 0.9 percent on a month-on-month and seasonally adjusted basis to an annual rate of 1,364,000 in the month of April, according to revised estimates. The previous estimate showed that building permits declined at a faster rate of 1.8 percent to 1,352,000. Forecast for May 2018: 1,350,000
#5: Australia RBA Governor Philip Lowe Speaks (06/20/2018 Wednesday 11:30 GMT)
Philip Lowe, Governor of the Reserve Bank of Australia, is scheduled to participate in a panel discussion in Portugal at the European Central Bank Forum on Central Banking. The markets often remain volatile during his speeches as traders make an attempt to understand the direction of interest rates.
#6: Euro Area ECB President Mario Draghi Speaks (06/20/2018 Wednesday 11:30 GMT)
Mario Draghi, President of the European Central Bank, is scheduled to participate in a panel discussion in Portugal at the European Central Bank Forum on Central Banking. The markets often remain volatile during his speeches as traders make an attempt to understand the direction of interest rates.
#7: Japan BoJ Governor Haruhiko Kuroda Speaks (06/20/2018 Wednesday 11:30 GMT)
Haruhiko Kuroda, Governor of the Bank of Japan, is scheduled to participate in a panel discussion in Portugal at the European Central Bank Forum on Central Banking. The markets often remain volatile during his speeches as traders make an attempt to understand the direction of interest rates.
#8: U.S. Fed Chair Jerome Powell Speaks (06/20/2018 Wednesday 11:30 GMT)
Jerome Powell, Federal Reserve Chair, is scheduled to participate in a panel discussion in Portugal at the European Central Bank Forum on Central Banking. The markets often remain volatile during his speeches as traders make an attempt to understand the direction of interest rates.
#9: U.S. Crude Oil Inventories (06/20/2018 Wednesday 14:30 GMT)
In the U.S., the crude oil stocks declined by 4.143 million barrels during the week that ended on June 8 after the rise of 2.072 million barrels in the prior month. Analysts had expected crude oil stocks to drop by 2.744 million barrels. Meanwhile, gasoline inventories also by as much as 2.271 million barrels, following the increase of 4.603 million barrels in the prior period. Analysts had expected gasoline stocks to rise by 0.443 million barrels.
#10: New Zealand GDP (06/20/2018 Wednesday 22:45 GMT)
New Zealand’s GDP grew 0.6 percent on a quarter-on-quarter basis in the final quarter of last year, the same rate as in the prior quarter. However, the reading for the quarter came in slightly below analysts’ expectation of 0.7 percent expansion. Manufacturing output declined after registering an increase in the third quarter. Construction lost steam, but utilities rebounded and services grew further. On a yearly basis, New Zealand’s GDP grew 2.9 percent. Analysts’ had expected a growth of 3.1 percent growth. Forecast for the first quarter of 2018: 0.5 percent expansion
#11: Switzerland Libor Rate (06/21/2018 Thursday 07:30 GMT)
In the meeting held in March, the Swiss National Bank decided to hold the benchmark interest rate at the same level of -0.75 percent in order to stabilize price developments and support economic activity. Policymakers said that the central bank’s willingness to intervene in the currency market as required and the negative interest rate are essential to reduce the pressure on the Swiss franc. Further, the central bank cut the inflation forecast for 2018 to 0.6 percent from previously reported 0.7 percent. For the next year, the SNB expects inflation to be at the 0.9 percent level. In the previous quarter, the SNB had estimated that it would be 1.1 percent. Forecast for June 2018: -0.75 percent
#12: Switzerland SNB Monetary Policy Assessment Report (06/21/2018 Thursday 07:30 GMT)
The Swiss National Bank releases the Monetary Policy Assessment Report on a quarterly basis. The central bank uses it as a tool to communicate with the investors as regards the monetary policy. The report provides the outcome of the previous meeting on interest rate decision and a commentary on the economic conditions that led to the decision. More importantly, the report provides an economic outlook and clues on future rate decisions.
#13: Switzerland SNB Press Conference (06/21/2018 Thursday 08:30 GMT)
The Chairman and the Governing Board Members of the Swiss National Bank participate in a press conference twice every year at the time of the announcement of the interest rates in June and December. The press conference lasts for about an hour and has two parts – the reading of prepared statements and questions by the press. As the questions often lead to unscripted answers, market volatility can be expected.
#14: U.K. MPC Official Bank Rate Votes (06/21/2018 Thursday 11:00 GMT)
The Monetary Policy Committee (MPC) of the Bank of England formulates its monetary policy for the purpose of meeting the 2.0 percent inflation target and sustaining growth and employment. At the MPC meeting on May 9, the members voted 2-0-7 to maintain the Official Bank Rate at the current level of 0.5 percent. The Committee also voted unanimously to continue the purchase of non-financial investment-grade corporate bonds at the £10 billion level and maintain the purchase of UK government bonds at the £435 billion level.
#15: U.K. Monetary Policy Summary Report (06/21/2018 Thursday 11:00 GMT)
Released on a monthly basis, the Monetary Policy Summary Report is a tool that the MPC makes use of to communicate with the investors as regards the monetary policy. In addition to containing the outcome of the members’ vote on interest rates and other policy measures, it provides a commentary on the economic conditions that impacted their votes. More importantly, it provides an economic outlook and offers clues on future votes.
#16: U.K. Official Bank Rate (06/21/2018 Thursday 11:00 GMT)
In the meeting in May, the MPC members of the Bank of England voted 2-0-7 to hold the Official Bank Rate at the current level of 0.5 percent because of a sharp GDP growth slowdown in the first quarter of this year. However, policymakers said that domestic cost pressures and wage growth are firming up gradually. The members also said that the inflation is expected to fall back a little faster than previously anticipated. Further, the bank noted that the weakness in data in the recent times is consistent with the temporary soft patch. This suggests that a rate hike in August is still on the cards. Forecast for June 2018: 0.5 percent
#17: U.K. BoE Governor Mark Carney Speaks (06/21/2018 Thursday 20:15 GMT)
Mark Carney, Governor of the Bank of England, is scheduled to speak in London at the Mansion House dinner. The markets often remain volatile during his speeches as traders make an attempt to understand the direction of interest rates.
#18: OPEC Meetings (06/22/2018 Friday All Day)
On the basis of the signals received from the OPEC’s top producers, it is expected that the group would increase the production of oil. However, it is clear as of now as to what will be the exact amount. Further, the lack of consensus among the OPEC members could pan out in many ways.
For many years now, there has been no uncertainty as regards increasing or decreasing production. However, this time around the degree of uncertainty in the days prior to the OPEC meeting is very. This is because of the discord within the group is so pronounced. The infighting might also lead to the outcomes that have not been expected hitherto.
#19: Canada CPI (06/22/2018 Friday 12:30 GMT)
In Canada, the consumer prices increased 0.30 percent in the month of April from that for the previous month.
#20: Canada Core Retail Sales (06/22/2018 Friday 12:30 GMT)
In Canada, core retail sales, excluding autos, dropped by 0.2 percent on a month-over-month basis in the month of March, following a flat reading in the prior month. Analysts’ had expected core retail trade to increase by 0.5 percent.