Last week, the U.S. dollar lost ground after Rex Tillerson was ousted. This move on the part of Trump eclipsed the inflation report and moved the market a great deal. President Trump fired the Secretary of State Rex Tillerson though he was not involved in any economic policy. It is the fear that Trump would a more a hard-line policy that moved the markets. The resignation of Gary Cohn, the Chief Economic Adviser, and the implementation of tariffs also hurt the U.S. dollar. Core inflation reading came in exactly as analysts expected and there were no surprises in other figures. The pound gained following the slightly upbeat forecast provided by the U.K. government but the Canadian dollar suffered because of sliding oil prices and Stephen Poloz’s dovish remark.
In the upcoming week, the focus shifts to the first interest rate decision by the new Fed Chair Jerome Powell. Here is an outlook on the economic data releases for the coming week:
#1: Australia Monetary Policy Meeting Minutes (03/20/2018 Tuesday 00:30 GMT)
The Reserve Bank of Australia releases the monetary policy meeting minutes 11 times in a year, two weeks after the announcement of the Cash Rate. It provides a detailed account of the Reserve Bank Board’s meeting in February. It also provides an in-depth insight into the country’s economic condition that impacted their decision on interest rates.
#2: U.K. CPI (03/20/2018 Tuesday 09:30 GMT)
In the U.K., inflation rate on a year-on-year basis stood at 3.0 percent in the month of January, unchanged from the reading for the month of December last year. However, the reading for the month of January came in above analysts’ expectation of 2.9 percent. The prices of culture and recreation increased further, while the cost of transportation and food rose at a slower pace. Forecast for February: 2.8 percent
#3: U.K. Average Earnings Index (03/21/2018 Wednesday 09:30 GMT)
During the three months to December last year, the total earnings of U.K. workers including bonuses increased by an annual rate of 2.5 percent to £512 per week. The rate of growth was the same as in the two periods prior to that. Sector-wise, worker’s wage growth remained unchanged in the public sector but was strong in the manufacturing, wholesale, retail, and restaurants and hotels sectors. Salary growth was lower in financial and business services and construction sectors. Excluding bonuses, earnings grew 2.5 percent to £481 per week, representing the largest growth since December 2016. The wage growth excluding bonus for the prior period was revised downward to an increase of 2.3 percent. Analysts expected a 2.4 percent growth excluding bonuses.
In real terms, workers’ earnings including bonuses declined by 0.3 percent, registering a reduction for the ninth month in a row. Excluding bonuses, earnings declined 0.3 percent, recording the tenth consecutive month of wage reduction. Earnings growth was lower than the inflation. Forecast for three months to January: 2.6 percent
#4: U.S. Crude Oil Stocks Change (03/21/2018 Wednesday 14:30 GMT)
In the U.S., the crude oil stocks rose by 5.022 million barrels during the week that ended on March 9, following the 2.408 million barrels increase reported for the prior period. The reading for the week came in much higher than analysts’ expectation for a stock an increase of 2.023 million barrels. This is the largest stock build up in seven weeks. On the other hand, gasoline stocks fell by 6.271 million barrels, the largest decline ever since September, following the 0.788 million decrease reported for the prior week. Analysts expected the stocks to drop by 1.176 million barrels.
#5: U.S. FOMC Economic Projections (03/21/2018 Wednesday 18:00 GMT)
The Federal Open Market Committee of the Federal Reserve releases the Economic Projections report four times in a year. This report provides the Committee’s projection for economic growth and inflation over the next two years. More importantly, it provides a breakdown of the interest rate forecast of individual FOMC members. The Federal Reserve uses this report as a tool to inform investors about the monetary and economic outlook.
#6: U.S. FOMC Statement (03/21/2018 Wednesday 18:00 GMT)
Released eight times in a year, the FOMC incorporates slight changes to the statement at each release. Traders focus on these changes. The FOMC uses it as a tool to communicate with investors as regards the monetary policy. In addition to containing the outcome of members’ vote on setting rates and other policy measures, it provides a commentary about the economic conditions that impacted their votes. More importantly, it provides an economic outlook and clues on future votes.
#7: U.S. Federal Funds Rate (03/21/2018 Wednesday 18:00 GMT)
In the U.S. FOMC meeting in January, the members decided to keep the federal funds rate target range unchanged at 1.25 to 1.50 percent. This was in line with analysts’ expectations. Policymakers opined that employment gains, business fixed investment, and household spending have been strong and the near-term economic risks appeared to be more or less balanced. As a result, the economic situation of the country is expected to develop in such a manner that warrants a gradual hike in interest rate. It is expected that the Fed will raise the interest rate to 1.75 percent.
#8: U.S. FOMC Press Conference (03/21/2018 Wednesday 18:30 GMT)
The U.S. FOMC holds press conferences four times in a year. The press conference that lasts for about an hour is held by the Fed Chair. It has two parts. In the first part, a prepared statement will be read. The second part is open questions by the press. As the questions might lead to answers that have not been scripted, markets may experience heavy volatility.
The Fed uses the press conference as a tool to communicate with investors as regards the monetary policy. In addition to covering in detail as to what factors affected the interest rate and policy decisions, the Fed provides a commentary about the economic outlook and inflation. More importantly, it offers clues on future monetary policy decisions.
#9: Reserve Bank of New Zealand Rate Statement (03/21/2018 Wednesday 20:00 GMT)
The Reserve Bank of New Zealand (RBNZ) releases the rate statement eight times in a year. The RBNZ uses the rate statement as a tool to communicate with investors as regards the monetary policy. It provides the outcome of their committee members’ decision on fixing interest rates and a commentary on the economic conditions that impacted their decision. More importantly, the statement discusses the country’s economic outlook and provides clues on future decisions.
#10: New Zealand Official Cash Rate (03/21/2018 Wednesday 20:00 GMT)
The Reserve Bank of New Zealand decided to leave its official cash rate steady at the record low level of 1.75 percent during the meeting held in February. This was widely expected by the market. The central bank of New Zealand moved the key interest rate for the last time in November 2016. Policymakers opined that the global economic growth has been improving and the inflation remained subdued. However, the policy statement highlighted signs of some emerging pressures such as commodity price increases, stronger equity markets, and not-so-stimulatory monetary policy. They also pointed out that monetary policy would remain accommodative for a longer period because of several uncertainties. In New Zealand, consumer prices increased 1.6 percent on a year-on-year basis in the fourth quarter of last year, which were much below analysts’ expectation of 1.9 percent and 1.9 percent for the prior period. The reading for the last quarter of 2017 was the lowest in a year. Forecast for March: 1.75 percent
#11: Australia Employment Change and Unemployment Rate (03/22/2018 Thursday 00:30 GMT)
With the employment gains in January, Australia registered the longest streak of increases. Unemployment fell slightly and the participation of women in the workforce hit an all-time high.
In Australia, employment increased in January by 16,000, in line with analysts’ expectations, according to the Australian Bureau of Statistics. This is solid gains considering the fact that this increase came after outsized increases in the months of November and December. The increase in January was the sixteenth straight month of gains, the longest since 1978.
On a seasonally adjusted basis, the unemployment rate declined slightly to the 5.5 percent level in January after the reading for the prior month was revised upward to 5.6 percent. This was in line with analysts’ expectations. The number of unemployed people in Australia declined to 7,900.
Forecast for February: 20,300 new job additions and an unemployment rate of 5.5 percent
#12: U.K. Retail Sales (03/22/2018 Thursday 09:30 GMT)
In the U.K., retail trade rose by 0.1 percent on a month-over-month basis in January after the figure for the prior month was revised downward to a decline of 1.4 percent. The reading for January missed analysts’ expectation for a 0.5 percent increase. Sales of both fuel and food declined, while sales at non-food stores rose as trades at other stores increased. On a year-on-year basis, retail trade increased 1.6 percent, slightly more than the previous month’s revised reading of 1.5 percent. However, it came in way below analysts’ expectation of 2.6 percent. Forecast for February: 0.4 percent on a month-on-month basis
#13: U.K. MPC Official Bank Rate Votes and Official Bank Rate (03/22/2018 Thursday 12:00 GMT)
The MPC Official Bank Rate Vote is reported in the ‘X-X-X’ format with the first, second, and third numbers representing the number of members voting to raise the interest rates, decrease the rates, and hold the rates. The members of the Monetary Policy Committee of the Bank of England voted 0-0-9 (unanimously) to hold the interest at the 0.5 percent level during the meeting held on February 8, 2018. This was in line with analysts’ expectation. Policy makers said that inflation is likely to remain at around 3.0 percent in the shorter term because of higher oil prices. Further, they warned that the interest rates are likely to rise sooner than expected, as a stronger economic growth could speed up inflation. The Monetary Policy Committee of the Bank of England sets the monetary policy to achieve the 2.0 percent inflation target so that it is possible to sustain employment and growth. In the meeting in March, the members are expected to vote unanimously again to hold the interest rate at same 0.5 percent level.
#14: U.K. Bank of England Monetary Policy Summary (03/22/2018 Thursday 12:00 GMT)
Released on a monthly basis, the monetary policy summary is one of the primary tools of the MPC to communicate with the investors as regards the monetary policy. It provides the outcome of members’ vote on policy measures and interest rates. It also contains a commentary on the economic conditions that impacted their votes. More importantly, it provides an economic outlook and clues on future decisions.
#15: Canada CPI (03/22/2018 Friday 12:30 GMT)
In Canada, the rate of inflation increased to 1.7 percent in January on a year-on-year basis and 0.7 percent from December last year, according to a report released by Statistics Canada in February. On an annual basis, the rate of inflation was lower compared to the 1.9 percent reported at the close of last year. However, the numbers point out that the consumer prices are going up. Forecast for February 2018: 0.4 percent increase on a monthly basis.
#16: Canada Retail Sales (03/22/2018 Friday 12:30 GMT)
In Canada, retail trade decreased 0.8 percent on a month-over-month basis in December last year after the figure for the prior month was revised upward to a gain of 0.3 percent. Analysts had expected a flat reading. The decline in retail trade January was the steepest since December 2015. Sales declined in general merchandise, personal care, health, and electronics and appliances sectors. Motor vehicle and spare parts dealers enjoyed increased sales because of higher sales of new cars. Sales growth at food and beverages stores was driven by better trade at supermarkets and grocery stores. On a year-on-year basis, retail sales rose 5.8 percent. Core retail sales fell by 1.8 percent and it is expected that it will increase by 0.9 percent for January 2018.
#17: U.S. Durable Goods Orders (03/22/2018 Friday 12:30 GMT)
New orders for long-lasting goods manufactured in the U.S. fell 3.7 percent on a month-over-month basis in January this year after the reading for December last year was revised downward to an increase of 2.6 percent. The reading for January came in much lower than analysts’ expectation for a 2.0 percent decline. This is the biggest decline in new orders for durable goods in six months and was driven by a 10 percent slump in transport equipment orders. New orders for non-defense capital goods, excluding aircraft, declined 0.2 percent following the 0.6 percent fall in December last year.
Core durable goods orders, which exclude the transportation sector, fell 0.3 percent on a month-over-month basis in January after the reading for the prior month revised upward to an increase of 0.7 percent. Analysts had expected the core durable goods orders to rise by 0.4 percent.
Forecast for February: Durable goods orders and core durable goods orders are expected to increase by 1.7 percent and 0.5 percent, respectively.