Last week was exciting for the U.S. dollar because of the release of some encouraging data and outcomes of trade tariff negotiations. The declaration of U.S. tariffs on products from China, which the world was eagerly awaiting, actually soured the mood. Further, the U.S. economic data came in mixed. Emerging markets around the world were not adversely affected as imminent solutions to the problems being faced by Argentina and Turkey were not in sight. The headlines related to the Brexit weighed down the Pound initially, but a rally ensued following a news report that Germany and the U.K. have decided to give up their key demands. However, a denial restricted the gains and the saga continued.
In the upcoming week, the BOE and the ECB are scheduled to announce their key interest rates. There are some other key releases from around the world as well. Here is an outlook on a few important economic data releases:
#1: U.K. GDP (09/10/2018 Monday 08:30 GMT)
The British economy expanded by 0.1 percent in the month of June after registering a growth of 0.3 percent in the prior month. The services sector growth remained flat, while the production, manufacturing and construction sectors registered expansion. The growth was the highest in the construction sector. The agriculture sector shrank 0.2 percent. Forecast for July 2018: 0.2 percent expansion
#2: U.K. Manufacturing Production (09/10/2018 Monday 08:30 GMT)
In the U.K., manufacturing production increased 0.4 percent on a month-on-month basis in June after the figure for the prior month was revised upward to a growth of o.6 percent. However, the reading for the month came in above analysts’ expectations for a 0.3 percent gain. Basic pharmaceutical products, plastic and rubber products, and basic metals, as well as metal products, provided the highest contributions to the growth in June. Forecast for July 2018: 0.2 percent increase in manufacturing production is expected
#3: U.K. Average Earnings Index (09/11/2018 Tuesday 08:30 GMT)
In the U.K., the total earnings of workers, including bonuses, rose by 2.4 percent to £518 per week during the three-month period to June, slowing down from the 2.5 percent increase in the prior period. Analysts expected total earnings of the workers to increase by 2.5 percent. This is by far the weakest gain in workers’ wages ever since the three-month period to September last year. The decline is partly attributable to the changes incorporated in annual bonus payment time. Wage growth slowed down in the manufacturing and construction sectors, while it remained steady in retailing, wholesaling, and hotels and restaurants sectors. Earnings rose faster in the financial and public sectors. Excluding bonuses, earnings rose by 2.7 percent, matching with analysts’ expectations, to £488 per week after the reading for the prior period was revised upward to 2.8 percent. In real terms, workers’ earnings including bonuses increased 0.1 percent, while earnings excluding bonuses rose 0.4 percent. In both the cases, the growth was the least ever since the three-month period to March. Forecast for the three-month period to July 2018: 2.5 percent increase
#4: U.S. PPI (09/12/2018 Wednesday 12:30 GMT)
In the U.S., the producer prices index of final demand goods remained unchanged in July, following the 0.3 percent increase in the month of June. As such, the PPI reading for June missed analysts’ expectation for a 0.2 percent increase. Goods prices rose 0.1 percent, the same rate as in June, in spite of a 0.5 percent and 0.1 percent decline in energy and food costs, respectively. Services prices decreased 0.1 percent, recording the first decline ever since December last year because of a sharp decline in trade services prices. The core PPI, which excludes energy and food, rose 0.1 percent but came in below analysts’ expectations for a 0.2 percent increase. Forecast for August 2018: an increase of 0.2 percent
#5: U.S. Crude Oil Stocks Change (09/12/2018 Wednesday 12:30 GMT)
In the U.S., crude oil stocks dropped by 4.302 million barrels during the week that ended on August 31, following the 2.566 million barrels fall in the prior week. Analysts had expected the stock to decrease by 1.294 million barrels. On the other hand, gasoline stocks increased 1.845 million barrels against analysts’ expectations for a decline of 0.81 million barrels.
#6: Australia Employment Change (09/13/2018 Thursday 01:30 GMT)
In Australia, employment decreased by 3,900 in the month of July. While full-time employment rose by 19,300 numbers, part-time employment dropped by 23,200 numbers. Forecast for August 2018: an increase of 18,400 jobs
#7: Australia Unemployment Rate (09/13/2018 Thursday 01:30 GMT)
On a seasonally adjusted basis, the unemployment rate in Australia unexpectedly edged lower to the 5.3 percent level in July from the 5.4 percent level in the previous month. The reading for July came in below analysts’ expectations of 5.4 percent. This is the lowest jobless rate ever since November 2012. The number of unemployed people in Australia declined 5,700. Forecast for August 2018: 5.3 percent
#8: U.K. BoE MPC Official Bank Rate Votes (09/13/2018 Thursday 11:00 GMT)
On August 2, the MPC officials of the Bank of England voted 9-0-0 to raise the official bank rate by 25 basis points to 0.75 percent, the highest level ever since March 2009. The recent decision by the central bank of U.K. saw key interest rise for only the second time ever since the 2007-2008 crash. Forecast for September 2018: 0-0-9 to maintain at 0.75 percent
#9: U.K. BoE Monetary Policy Summary (09/13/2018 Thursday 11:00 GMT)
The Bank of England releases the Monetary Policy Summary on a monthly basis to communicate with the investors as regards monetary policy. It provides the outcome of members’ their decision on policy measures and interest rates. The Summary also provides a commentary on the economic conditions that impacted members’ votes. More importantly, it provides an economic outlook and clues on future decisions.
#10: U.K. BoE Official Bank Rate (09/13/2018 Thursday 11:00 GMT)
In the meeting in August, the Bank of England’s MPC members voted unanimously to hike the Bank Rate to 0.75 percent. Policymakers said that recent data sort of confirmed that the decline in output in the March quarter was temporary. Further, the labor market has tightened up and growth in wages has firmed up. Further, the bank noted that the tightening of the monetary policy during the forecast period is appropriate to get back to the 2.0 percent inflation target in a sustainable manner. Forecast for September 2018: 0.75 percent
#11: Euro Zone ECB Main Refinancing Rate (09/13/2018 Thursday 11:45 GMT)
In the meeting in the month of July, the ECB decided to hold its benchmark refinancing rate at the 0.0 percent level. Policymakers reiterated that the net asset purchases per month will be cut to €15 billion for the period September to December 2018. Asset purchases will be discontinued after December. Forecast for September 2018: 0.0 percent
#12: Euro Zone ECB Press Conference (09/13/2018 Thursday 12:30 GMT)
The ECB President and the Vice President partake in a press conference that is scheduled to be held about 45 minutes after the announcement of the Minimum Bid Rate. The press conference, which is held 8 times in a year, lasts for about an hour and has two parts: the reading of a prepared statement and a question and answer session. As questions by the press often lead to unscripted answers, heavy market volatility can be expected.
#13: U.S. CPI (09/13/2018 Thursday 12:30 GMT)
In the U.S., consumer prices rose by 0.2 percent on a month-over-month basis in July after the 0.1 percent increase in the previous month. The reading for July was in line with analysts’ expectations. The shelter index which rose 0.3 percent accounted for approximately 60 percent of the gain. Further, the food index rose 0.1 percent, while the major grocery store food group indexes remained mixed. Energy index dropped 0.5 percent. Forecast for August 2018: an increase of 0.3 percent in consumer prices is expected
#14: U.S. Core CPI (09/13/2018 Thursday 12:30 GMT)
In the U.S., the core inflation rate, excluding volatile items like food and energy, increased by 0.2 percent in the month of July. In August 2018 also, it is expected to increase by the same 0.2 percent.
#15: U.K. BoE Governor Mark Carney Speaks (09/14/2018 Friday 10:00 GMT)
Mark Carney, Governor of the Bank of England, is scheduled to speak in Dublin at the Whitaker Lecture. Markets often remain volatile during his speeches. This is because traders make an attempt to understand the direction of interest rates.
#16: U.S. Retail Sales (09/14/2018 Friday 12:30 GMT)
In the U.S., the retail trade increased by 0.5 percent on a month-over-month basis in July after the reading for the prior month was revised downward to an increase of 0.2 percent. Analysts had expected a 0.1 percent increase in retail trade. The increase in retail sales in July was boosted by clothing and motor vehicles purchases. Forecast for August 2018: a 0.4 percent increase is expected
#17: U.S. Core Retail Sales (09/14/2018 Friday 12:30 GMT)
In the U.S., core retail trade (excluding autos) increased 0.6 percent on a month-over-month basis in July after the reading for the previous month was revised downward to an increase of 0.2 percent. The reading for July beat analysts’ expectations for a 0.3 percent increase. Forecast for August 2018: an increase of 0.4 percent