Last week, the U.S. dollar reacted differently against different currencies as trade war fears grew and investors looked for safe havens. Risk currencies suffered a little bit. As a result of the trade concerns, the stock markets fell and created a risk-off situation that helped both the U.S. dollar and the yen against all of the world currencies. However, it was not at all a unidirectional move and there was calm for long periods as well. Further, the panel discussion participants Fed Chair Powell, BOJ Governor Kuroda, RBA Governor Lowe, and ECB President Draghi did not come up with any encouraging news. Trade war continues to be the main theme. What next? Here is an outlook on what is in store for the upcoming week:
#1: U.S. Consumer Board Consumer Confidence (06/26/2018 Tuesday 14:00 GMT)
In the U.S., the Conference Board (CB) Consumer Confidence Index rose by 2.4 points in May, following the modest downwardly revised decline in the previous month. Currently, the Index stands at the 128.0 level, rising from the 125.6 level in April. While the Present Situation Index rose to 161.7 from 157.5, the Expectations Index improved to 105.6 from 104.3 in the prior month.
#2: New Zealand ANZ Business Confidence (06/27/2018 Wednesday 01:00 GMT)
In New Zealand, business confidence declined in May as firms, especially the retailers, expected activity to slow down and felt that earnings will shrink in the coming year. A net 27.2 percent of the 354 firms surveyed as part of the ANZ business outlook survey now expect that general business conditions will deteriorate in the next 12 months compared to the net 23.4 percent pessimists in the previous month.
#3: U.K. BoE Governor Mark Carney Speaks (06/27/2018 Wednesday 08:30 GMT)
Mark Carney, the Governor of the Bank of England, is scheduled to hold a press conference in London to discuss the Bank Stress Test results and Financial Stability Report. Markets often turn volatile during his speeches. This is because traders star looking for interest rate clues.
#4: U.S. Core Durable Goods Orders (06/27/2018 Wednesday 12:30 GMT)
In the U.S., the orders for core durable goods (excluding orders for transportation goods) rose by 0.90 percent on a month-on-month basis in the month of April after the figure for the prior month was revised upward to represent a gain of 0.40 percent. The reading for April came in better than analysts’ expectation for a 0.5 percent increase. Forecast for May 2018: 0.5 percent increase
#6: U.S. Crude Oil Inventories (06/27/2018 Wednesday 14:30 GMT)
In the U.S., crude oil stocks fell 5.914 million barrels during the week that ended on June 15 after the 4.143 million barrels drop in the prior month. Analysts had expected crude oil stocks to decline by 2.1 million barrels. This is the largest decline in crude oil stocks even since January second week. Meanwhile, gasoline stocks rose by 3.277 million barrels, following the decline of 2.271 million barrels in the prior week. Analysts had expected gasoline stocks to increase by 0.188 million barrels.
#7: Canada BoC Governor Stephen Poloz Speaks (06/27/2018 Wednesday 19:00 GMT)
Stephen Poloz, the Governor of the Bank of Canada, is scheduled to deliver a speech on “Let Me Be Clear: From Transparency to Trust and Understanding” in British Columbia at the Greater Victoria Chamber of Commerce meeting. Markets often turn volatile during his speeches. This is because traders start looking for interest rate clues. The text of his speech will be released at the listed time. He will deliver his speech 15 minutes after the release of the text.
#8: New Zealand Official Cash Rate (06/27/2018 Wednesday 21:00 GMT)
In the meeting held in the month of May, the Reserve Bank of New Zealand decided to keep the official cash rate steady at the record low level of 1.75 percent as was widely expected by the market. The central bank changed the key rate for the last time in November 2016. Policymakers noted that the consumer price inflation remained below the mid-point of the central bank’s target partly due to recent low import and food price inflation and subdued wage pressures. They also pointed out that the chances of the inflation moving in either direction are equally balanced. Consumer prices rose by 1.1 percent (at the slowest pace since September quarter of 2016) on a year-on-year basis in the first quarter of 2018 after the 1.6 percent rise in the prior quarter, matching with analysts’ expectation. Forecast for June 2018: 1.75 percent
#9: New Zealand RBNZ Rate Statement (06/27/2018 Wednesday 21:00 GMT)
The Reserve Bank of New Zealand releases the Rate Statement eight times in a year. The central bank uses it as a tool to communicate with investors as regards the monetary policy. It provides the outcome of the latest interest rate decision and a commentary on the economic conditions that impacted their decision. More importantly, it provides an economic outlook and offers clues on future decisions.
#10: U.S. Final GDP (06/28/2018 Thursday 12:30 GMT)
The US economy grew an annualized 2.2 percent on a quarterly basis in the March quarter of this year as per the second estimate. This is below the 2.3 percent expansion reported in the first estimate and analysts’ expectation of 2.3 percent. This is because private inventory investment, exports, and residential fixed investment were revised downward. However, nonresidential fixed investment was revised upward. Final GDP estimate for the first quarter of 2018: 2.2 percent
#11: U.K. Current Account (06/29/2018 Friday 08:30 GMT)
U.K.’s current account deficit narrowed to £18.4 billion in the final quarter of last year after the reading for the prior quarter was revised downward to £19.2 billion. The reading last year’s final quarter came in well below analysts’ expectation for a deficit of £24 billion. This is the lowest current account deficit since the September quarter of 2012. The primary income deficit narrowed because of an increase in earnings on foreign investment and a decline in payments to foreign investors. The secondary income deficit declined because of a decrease in general government payments. However, the overall trade deficit increased to £7.6 billion from £5.2 billion, driven by an increase in oil imports and a decline in sales of food and oil, beverages and tobacco. Current account forecast for the first quarter of 2018: a deficit of £18.2 billion
#12: Canada GDP (06/28/2018 Friday 12:30 GMT)
Canada’s GDP grew 0.3 percent in the first quarter of this year after increasing 0.4 percent each in the September and December quarters of last year. This is the slowest rate of expansion ever since the 0.3 percent contraction seen in the June quarter of 2016. While the final domestic demand increased by 0.5 percent, household spending, export of non-energy products, and housing investment decelerated. Real GDP rose by 1.3 percent in the March quarter but came in much below analysts’ expectation for a gain of 1.8 percent.
#13: Canada BoC Business Outlook Survey (06/28/2018 Friday 14:30 GMT)
The results of the Bank of Canada’s Business Outlook Survey during the spring season of 2018 suggested that the business sentiment remained positive and was supported by strong sales prospects. Further, the report noted that the strong demand in the recent times is driving up capacity and labor pressures in most regions.
The Canadian central bank releases the Business Outlook Survey report on a quarterly basis. It is a highly respected report because of its predictive qualities and is taken into account when making interest rate decisions. The firms included in the Survey are chosen on the basis of their composition with respect to the nation’s GDP. Traders care because the report is a leading indicator of the country’s economic health. As part of the Survey, 100 businesses are asked to rate various business conditions.