The U.S. dollar touched a five-month high last week as comments made by incoming Fed policymakers Michelle Bowman and Richard Clarida during the Senate confirmation hearings reflected a hawkish shift in policy decisions. The greenback rose to a five-month high against its top counterparts from around the world.
The policy statement that was released after the sit-down sort of reinforced the projection of three interest rate hikes during this year. However, an upgrade in the oratory with respect to inflation raised hopes of a more aggressive monetary policy tightening cycle in the coming years. The greenback would gain further because of this upbeat expectation.
The upcoming week is likely to encourage continued speculation as the Minutes of the rate-setting meeting held on May 2 is scheduled to be released. The spotlight will then turn Fed Chair Jerome Powell’s speech at the conference to celebrate the Riksbank’s 350th anniversary in Stockholm. It is expected that he will signal spillover risks are not likely to stop the Fed from the tightening pursuit. This too can be expected to boost the U.S. dollar.
#1: New Zealand Retail Sales (05/20/2018 Sunday 22:45 GMT)
In New Zealand, retail sales rose by 1.7 percent on a quarter-on-quarter basis in the final quarter of last year after the reading for the prior period was revised upward to an increase of 0.3 percent. The reading for the quarter came in above analysts’ expectation for a gain of 1.4 percent. The increase in retail sales was driven by grocery stores and supermarkets, food and beverages, and motor vehicles and parts sectors. Accommodation sector experienced the largest decline in the December quarter of 2017. On a year-on-year basis, retail sales rose by 5.4 percent after the reading for the prior period was revised upward to an increase of 4.6 percent. Forecast for the first quarter of 2018: an increase of 1.0 percent
#2: U.K. Inflation Report Hearings (05/22/2018 09:00 GMT)
The BOE Governor and the MPC members testify before the Treasury Committee of the Parliament on inflation and economic outlook. The inflation report hearings last for a few hours and often create market volatility during the period. The traders take note of the direct comments as regards the currency markets. The MPC members vote for setting the key interest rates. They make use of their public engagements to provide subtle clues on future interest rate decisions.
#3: Australia RBA Governor Philip Lowe Speaks (05/23/2018 Wednesday 08:00 GMT)
Philip Lowe, Governor of the Reserve Bank of Australia, is scheduled to speak at the Australia-China Relations Institute in Sydney on China’s economy and financial system, and their implications for Australia. The audience is expected to ask questions. The markets often remain volatile during his speeches as traders look for interest rate clues.
#4: U.K. CPI (05/23/2018 Wednesday 08:30 GMT)
In the U.K., the inflation rate declined to 2.5 percent in the month of March from 2.7 percent in the prior month. The reading for March came in below analysts’ expectation of 2.7 percent. This is the lowest rate ever since March 2017, as housing and utilities, clothing and footwear, and furniture and household equipment prices rose at a slower rate. Meanwhile, miscellaneous goods and services costs declined.
#5: U.S. Crude Oil Stocks Change (05/23/2018 Wednesday 14:30 GMT)
In the U.S., crude oil stocks declined by 1.4040 million barrels during the week that ended on May 11 after the 2.197 million barrels drop reported for the prior period. The reading came in higher than analysts’ expectation for a decline of 0.763 million barrels. Gasoline stocks also declined 3.790 million barrels, following on the 2.174 million barrels drop in the prior week. Analysts’ had expected gasoline stocks to drop by 1.421 million barrels.
#6: U.S. FOMC Meeting Minutes (05/23/2018 Wednesday 18:00 GMT)
The U.S. FOMC releases the minutes of the rate-setting meeting eight times in a year three weeks after the announcement of the Federal Funds Rate. The Minutes provides a detailed account of the most recent meeting of the FOMC and offers an in-depth analysis of the economic and financial conditions that impacted the members’ votes on setting interest rates.
#7: U.K. BOE Governor Mark Carney Speaks (05/24/2018 Thursday 08:00 GMT)
Mark Carney, Governor of the Bank of England, is scheduled to deliver opening remarks at the central bank’s Markets Forum meeting to be held in London. The markets often remain volatile during his speeches. This is because traders look for interest rate clues.
#8: U.K. Retail Sales (05/24/2018 Thursday 08:30 GMT)
In the U.K., retail sales declined by 1.2 percent on a month-over-month basis in March, following an increase of 0.8 percent in the previous month. Analysts’ had expected a smaller drop of 0.5 percent. Petrol sales fell by 7.4 percent probably because of adverse weather conditions. Travel was impacted because of bad weather. Food and non-food products sales also declined. Department stores sector was the only segment that showed sales gains in March. Feedback from retailers suggested that online offers for Easter and Mothering Sunday boosted internet sales because of adverse weather.
#9: European Central Bank Monetary Policy Meeting Accounts Report (05/24/2018 Thursday 11:30 GMT)
The European Central Bank Monetary Policy Meeting Accounts Report eight times in a year four weeks after the announcement of the Minimum Bid Rate. It provides a detailed account of the Governing Board’s most recent meeting and offers in-depth insight into the economic conditions that impacted their decision on setting interest rates.
#10: U.K. BOE Gov Carney Speaks (05/24/2018 Thursday)
Mark Carney, Governor of the Bank of England, is scheduled to speak in London at the annual dinner of the Society of Professional Economists. Markets often remain volatile during his speeches. This is because traders look for interest rate clues.
#11: U.K. Second GDP Estimate (05/25/2018 Friday 08:30 GMT)
The first estimate showed that the U.K.’s economy grew 0.1 percent on a quarter-on-quarter basis in the first quarter of this year, easing from the 0.4 percent expansion recorded in the prior quarter. The reading for the first quarter missed analysts’ expectation that the economy will grow by 0.3 percent. This is the weakest growth rate ever since the 0.1 percent contraction in the final quarter of 2012. Construction output dropped sharply and manufacturing activity expanded at a slower rate.
#12: U.S. Core Durable Goods Orders (05/25/2018 Friday 12:30 GMT)
New orders for long-lasting goods manufactured in the United States, excluding transportation items, remained almost unchanged in March from the reading for the prior month. In March, the core durable goods orders rose by 0.1 percent (revised figure) after the reading for the prior month was revised downward to an increase of 0.9 percent. The reading for the month, however, missed the analysts’ estimate for a 0.5 percent increase.
#13: U.K. BOE Governor Mark Carney Speaks (05/25/2018 Friday 13:30 GMT)
Mark Carney, Governor of the Bank of England, is scheduled to participate in a panel discussion titled “The future of central banking?” in Stockholm at the Sveriges Riksbank Anniversary Conference. Markets often remain volatile during his speeches. This is because traders look for interest rate clues.
#14: U.S. Fed Chairman Jerome Powell Speaks (05/25/2018 Friday 13:30 GMT)
Jerome Powell, Federal Reserve Chairman, is scheduled to participate in a panel discussion titled “The future of central banking?” in Stockholm at the Sveriges Riksbank Anniversary Conference. Markets often remain volatile during his speeches. This is because traders look for interest rate clues.