Economic calendar for the week 12.06.2023 – 18.06.2023

No important macro statistics scheduled to be released.

Tuesday, June 13

06:00 GBP Report on the average wages of the British for the last 3 months. Unemployment rate

Every month, the Office for National Statistics (ONS) publishes a report on average wages including the period for the last 3 months, with and without bonuses.

This report is a key short-term indicator of the dynamics of changes in wages of employees in the UK. Wages growth is a positive factor for the GBP, while the low value of the indicator is negative. Forecast: The June report suggests that the average wages with bonuses rose again in the last reporting 3 months (February-April), after rising by +5.8%, +5.9%, +6.0%, +6.5%, +6.%, +6.1%, +5.5%, +5.2%, +6.4%, +6.8%, +7.0%, +5.6% , +4.8%, +4.3%, +4.2% in previous periods); wages without bonuses also increased after growth of +6.7%, +6.6%, +6.6%, +6.7%, +6.5%, +6.1%, +5.8%, + 5.5%, +5.2%, +4.7%, +4.4%, +4.2%, +4.2%, +4.1%, +3.8%, +3, 7%, +3.8% in previous periods). Thus, the data points to the continued growth of wages, which is a positive factor for the pound. If the data turns out to be better than the forecast and / or previous values, the pound is likely to strengthen in the foreign exchange market. Data worse than forecast/previous values will have a negative impact on the pound.

Also at this time the office publishes data on unemployment in the UK. It is expected that for 3 months (February-April) unemployment was at the level of 4.0% (against 3.9%, 3.8%, 3.7%, 3.7%, 3.7%, 3.7% , 3.6%, 3.5%, 3.6%, 3.8%, 3.8%, 3.8%, 3.7%, 3.8%, 3.9%, 4.1% , 4.2%, 4.3%, 4.5%, 4.6%, 4.7%, 4.8%, 4.7%, 4.8%, 4.9%, 5.0% , 5.1%, 5.0% in previous periods).

Since 2012, the UK unemployment rate has steadily declined (from 8.0% in September 2012). This is a positive factor for the pound, while a rise in unemployment is a negative factor.

If the data from the UK labor market turns out to be worse than the forecast and / or the previous value, the pound will be under pressure.

In any case, at the time of publication of data from the British labor market, increases volatility is expected in the quotes of the pound and the London Stock Exchange.

06:00 EUR  Harmonized Index of Consumer Prices (HICP) in Germany (final release)

This index is published by the EU Statistics Office and is calculated on the basis of a statistical method agreed between all EU countries. It is an indicator for assessing inflation and is used by the Governing Council of the ECB to assess the level of price stability. A positive result strengthens the EUR, while a negative result weakens it.

Previous indicator values: +7.6% in April, +7.8% in March, +9.3% in February, +9.2% in January, +9.6% in December, +11.3% in November, +11.6% in October, +10.9% in September, +8.8% in August, +8.5% in July, +8.2% in June, +8.7% in May, +7.8% in April, +7.6% in March, +5.5% in February, +5.1% in January 2022 (YoY). If the May data turns out to be better than the previous values, the euro may strengthen in the short term. The growth of the indicator is a positive factor for the euro. The data suggests mounting inflationary pressures in Germany, which in turn is putting pressure on the ECB to tighten its monetary policy. Data worse than the previous value will have a negative impact on the euro.

Forecast for May: +6.3% (against the preliminary estimate of +6.3%).

12:30 USD Consumer Price Index (ex food and energy)

Core Consumer Price Index (Core CPI) determines the change in prices of a selected basket of goods and services over a given period and is a key indicator for assessing inflation and changing consumer preferences. Food and energy are excluded from this indicator for a more accurate estimate. A high result strengthens the US dollar, while a low result weakens it. In March 2022, the value of the indicator was +0.3% (+6.5% in annual terms), in April +0.6% (+6.2% in annual terms), in June +0.7% (+ 5.9% in annual terms), in September +0.6% (+6.6% in annual terms), +0.3% (+6.3% in annual terms) in October, +0.2% (+6.0% in annual terms) in November, +0.3% (+5.7% in annual terms) in December, +0.4% (+5.6% in annual terms) in January 2023 , +0.5% (+5.5% in annual terms) in February 2023, +0.4% (+5.6% in annual terms) in March, +0.4% (+5.5% in annual terms) in April, which indicates a slight decrease in the growth rate of consumer inflation after strong growth in the previous months of 2022. If the data turns out to be weaker than the forecast, the dollar is likely to react with a short-term decline. Data better than the forecast will strengthen the dollar. Forecast for May: +0.4% (+5.6% in annual terms), which indicates continued inflationary pressure in the US economy.

Wednesday, June 14

18:00 USD The Fed’s interest rate decision. Monetary policy statement. Summary of Economic Projections by the Federal Open Market Committee

In 2020, the dollar was declining, because investors were withdrawing funds from safe-haven assets to buy more risky and profitable assets of the stock market, which continued to grow despite the threat of a second wave of the coronavirus epidemic and the associated economic slowdown. The role of the dollar as a defensive asset also declined. However, in 2021 the situation has changed – the dollar strengthened. Now market participants are waiting for the US central bank to either pause or continue the cycle of tightening monetary policy, but at an even slower pace.

As expected, at this meeting the rate will not be increased, remaining at the level of 5.25%, although the option of raising the rate by 0.25% is not excluded. During the period of publication of the rate decision, volatility can increase sharply throughout the financial market, primarily in the US stock market and in dollar quotes, especially if the rate decision differs from the forecast or unexpected statements are received from the Fed management.

Powell’s comments could affect both short-term and long-term USD trading. A more hawkish stance on the Fed’s monetary policy is seen as positive and strengthens the US dollar, while a more cautious stance is seen as negative for the USD. Investors want to hear Powell’s opinion on the Fed’s plans for this year.

Traders should also pay attention to the Fed’s report with forecasts for inflation and economic growth for the next two years and, no less important, individual opinions of FOMC members on interest rates.

18:30 USD Press conference of the FOMC (Federal Open Market Committee of the US Federal Reserve)

The press conference of the Federal Open Market Committee of the US Federal Reserve lasts about an hour. The first part reads the ruling, followed by a series of questions and answers that can increase market volatility. Any unexpected statements by Powell on the topic of the Fed’s monetary policy will cause an increase in volatility in dollar quotes and in the US stock market.

21:45 NZD New Zealand GDP for the 1st quarter

The publication of the data will cause increased volatility in the NZD. Given the rise in prices of commodities and agricultural products recently (especially dairy products, which are the most important component of New Zealand’s exports), and the fact that the coronavirus pandemic has affected New Zealand the least compared to other major economies, it is likely that the New Zealand GDP report for the 1st quarter of 2023 will be released with positive indicators.

GDP is expected to contract in 1Q 2023 but rise again yoy (previous yoy: +2.2%, +6.4%, +0.4%, +1.2%, +3.1%, -0.2%, +2.9%, -0.8%, +0.2%, -11.3%, 0%, +1.7%). The data so far remain conflicting, although they indicate a continued gradual recovery of the New Zealand economy after its fall in the first half of 2020. Data worse than previous values will negatively affect NZD quotes.

Forecast for Q1 2023: -0.1% (+2.0% YoY).

Thursday, June 15

01:30 AUD Employment rate. Unemployment rate

The employment rate reflects the monthly change in the number of employed Australian citizens. The growth of the indicator has a positive impact on consumer spending, which stimulates economic growth. A high value is positive for the AUD, while a low value is negative. Previous values of the indicator: -4,300 in April, +53000 in March, +64,600 in February, -11,500 in January, +14,600 in December, +64,000 in November, +32,200 in October, +900 in September, +33,500 in August, – 40,900 in July, +88,400 in June, +60,600 in May, +4,000 in April, +17,900 in March, +77,400 in February, +12,900 in January 2022.

Also at the same time, the Australian Bureau of Statistics will publish a report on the unemployment rate – an indicator that assesses the ratio of the unemployed population to the total number of able-bodied citizens. The growth of the indicator indicates the weakness of the labor market, which leads to a weakening of the national economy. The decrease in the indicator is a positive factor for the AUD.

Forecast: Unemployment in Australia remained at its lowest level in May at 3.7% (against 3.7% in April, 3.5% in March and February, 3.7% in January, 3.5% in December, 3 .4% in November and October, 3.5% in September and August, 3.4% in July, 3.5% in June, 3.9% in May and April, 4.0% in March and February, 4 .2% in January) and the employment rate rose by +20,000 Australian workers.

The RBA officials have repeatedly stated that in addition to the situation in international trade, the Australian economy and the central bank’s monetary policy plans are affected by indicators of the level of debts and household spending, growth in wages of workers, as well as the state of the country’s labor market. If the values of the indicators turn out to be worse than the forecast, then the Australian dollar may decline significantly in the short term. Better-than-expected data will strengthen the AUD in the short term.

02:00 CNY Retail sales

Retail Sales Level Index is released monthly by China’s National Bureau of Statistics and evaluates the total volume of retail sales and cash generated. The index is often considered an indicator of consumer confidence and economic well-being and reflects the state of the retail sector in the near term. The growth of the index is usually a positive factor for the CNY; a decrease in the indicator will negatively affect the CNY. Previous index value (in annual terms) +18.4%, +10.6%, +3.5%, -1.8%, -5.9% (after +8% growth in the last months of 2019 and falling by -20.5% in February 2020).

The data suggests an uneven pace of recovery after a strong drop in February-March 2020. If the data turns out to be weaker than the forecast or previous values, the CNY may weaken sharply.

Forecast for May: +13.9%.

12:15 EUR ECB’s rate decision

The ECB will publish its decision on the key rate and on the deposit rate. The ECB’s tight stance on inflation and the level of key interest rates contributes to the strengthening of the euro, while a soft position and rate cuts weaken the euro. Given the high level of inflation in the Eurozone, according to the ECB management, the balance of risks for the economic outlook for the Eurozone “remains skewed to the negative side.”

“The Governing Council believes that interest rates will still need to rise significantly … in order to ensure a timely return of inflation to a medium-term target of 2%,” the ECB said in a statement following the December meeting.

Speaking at the World Economic Forum in Davos in January 2023, the ECB President Christine Lagarde said that “inflation expectations are not easing” and “the ECB will continue to raise rates.” In her opinion, “inflation is too high”, and “the ECB intends to bring it down to 2% in a timely manner.”

The ECB believes that GDP growth may decline, including due to the energy crisis in the EU, high uncertainty, weakening global economic activity and tightening financing conditions. However, the recession should not drag on too long, although strong growth is not expected either.

“In the near future, growth will recover as the current headwinds ease. Overall, according to Eurosystem staff forecasts, the economy will grow by 0.5% in 2023, 1.9% in 2024 and 1.8% in 2025.

Thus, if we follow this signal from the head of the ECB, following this meeting, the key interest rate and the ECB deposit rate for commercial banks will be increased again, most likely by 0.25% (up to 4.00% and 3.50% , respectively). But other, tougher solutions are not ruled out (an increase of 0.5% or even 0.75%).

Well, since inflation in the Eurozone is still unacceptably high for the leaders of the ECB, they may announce an increase in interest rates at the next meetings.

Perhaps this will also be mentioned in the accompanying statements of the leaders of the ECB.

12:30 USD Retail sales. Retail control group

This report (Retail Sales) reflects the total sales of retailers of all sizes and types. The change in retail sales is the main indicator of consumer spending. The report is a leading indicator and data may be heavily revised in the future. A high result strengthens the US dollar, a low result weakens. A relative decrease in the indicator may have a short-term negative impact on the dollar, and an increase in the indicator will have a positive effect on the USD. In the previous month (April), the value of the indicator was +0.4% (after -1.0%, -0.6%, +3.2%, -0.8%, -1.1%, +1.1 %, -0.2%, +0.7%, -0.4%, +1.0% in previous months).

Forecast for May: -0.1%.

Retail sales is the main indicator of consumer spending in the US showing the change in retail sales. The Retail Control Group measures volume across the entire retail industry and is used to calculate price indices for most products. A high result strengthens the US dollar, and vice versa, a weak report weakens the dollar. A slight increase in indicators is unlikely to accelerate the growth of the dollar. The data is worse than the values of the previous period +0.7%, -0.3%, +0.5%, +2.3%, -0.3%, -0.5%, +0.4%, +0, 5%, +0.4%, +1.1% in the previous months of 2022 could negatively affect the dollar in the short term.

Forecast for May: 0%.

12:45 EUR Press conference of the ECB. ECB’s Monetary Policy Statement

The press conference will be of major interest to market participants. In its course, a surge in volatility is possible not only in euro quotes, but also in the entire financial market, if ECB leaders make unexpected statements. ECB leaders will assess the current economic situation in the Eurozone and comment on the bank’s decision on rates. In previous years, as a result of some meetings of the ECB and subsequent press conferences, the euro exchange rate changed by 3% -5% in a short time.

Soft tone of statements will have a negative impact on the euro. And, on the contrary, tough tone of the speech of the ECB management regarding the monetary policy of the central bank will strengthen the euro.

Friday, June 16

After 02:00 (exact time unknown): JPY Bank of Japan’s interest rate decision. Bank of Japan’s Press Conference and Monetary Policy statement

The Bank of Japan will decide on the interest rate. At the moment, the main rate in Japan is in negative territory, amounting to -0.1%. Most likely, the rate will remain at the same level. If it is cut and deepens into negative territory, such a decision will cause a sharp decline in the yen in the foreign exchange market and an increase in the Japanese stock market. In any case, a jump in volatility in the quotations of the yen and in the Asian financial market is expected during this period of time.

Since February 2016, the Bank of Japan has kept the deposit rate at -0.1%. The yield target for 10-year bonds is currently in the 0% region. One of the recent accompanying statements from the Bank of Japan said that the management of the bank will continue to “increase the monetary base until inflation is stable above 2%.” “We will not hesitate to take additional easing measures if necessary,” the bank also traditionally said in a statement.

During the press conference, the head of the Bank of Japan Kazuo Ueda will comment on the bank’s monetary policy. The Bank of Japan continues to adhere to its ultra-soft monetary policy. As former head of the Japanese Central Bank Haruhiko Kuroda has repeatedly stated earlier, “it is appropriate for Japan to patiently continue the current loose monetary policy.” Markets usually noticeably react to the speeches of the head of the Bank of Japan. For sure, he will again touch upon the topic of monetary policy during his speech, which will cause an increase in volatility not only in yen trading, but throughout the Asian and global financial markets.

If bank officials decide that the Japanese economy is stable and inflation momentum towards the 2% target is not diminishing, they will refrain from changing policy.

After 05:00 (exact time unknown) JPY Bank of Japan’s press conference

During the press conference, the head of the Bank of Japan Kazuo Ueda, who replaced Haruhiko Kuroda on this position in April 2023, will comment on the bank’s monetary policy. Despite earlier measures taken by the bank to stimulate the Japanese economy, inflation remains low, production and consumption are falling, which negatively affects export-oriented Japanese manufacturers. Markets usually noticeably react to the speeches of the head of the Japanese Central Bank. If he touches on the topic of monetary policy during his speech, volatility will increase not only in trading in the yen, but throughout the Asian and global financial markets.

09:00 EUR Consumer price index. Core CPI (final release)

Consumer Price Index (CPI) is published by Eurostat and measures the change in prices of a selected basket of goods and services over a given period. The index is a key indicator for assessing inflation and changing consumer preferences. A positive result strengthens the EUR, a negative result weakens it.

Previous values: +7.0% in April, +8.5% in February, +8.6% in January, +9.2% in December, +10.1% in November, +10.6% in October , +9.9% in September, +9.1% in August, +8.6% in June, +8.1% in May, +7.4% in April and March, +5.9% in February , +5.1% in January, +5.0% in December. If the data turns out to be worse than the forecast, the euro may sharply decline in the short term. Data better than the forecast and / or the previous value may strengthen the euro in the short term. The target level of consumer inflation of the ECB is slightly below 2.0%, and the data indicate an acceleration of inflation in the Eurozone.

Core Consumer Price Index (Core CPI) determines the change in prices of a selected basket of goods and services over a given period and is a key indicator for assessing inflation and changing consumer preferences. Food and energy are excluded from this indicator for a more accurate estimate. A high result strengthens the EUR, while a low result weakens it. In January 2022, Core CPI increased by +5.3%, +2.3%, in February – by +2.7%, in March – by +2.9%, in April – by +3.5%, in May – by +3.8%, in June – by +3.7%, in August – by +4.3%, in September – by +4.8%, in October – by +5.0%, in November – by +5.0%, in December – by +5.2%.

Previous values: +5.6% in April, +8.5% in February 2023, +8.6%, +9.2%, +10.1%, +10.6%, +9.9% , +9.1%, +8.9%, +8.6%, +8.1%, +7.4%, +7.4%, +5.9%, +5.1% (in January 2022).

If the data for May 2023 turns out to be worse than the previous value or forecast, this may negatively affect the euro. If the data turns out to be better than the forecast or the previous value, then the euro is likely to react with an increase in quotations. Core inflation in the Eurozone is accelerating, which is positive (under normal economic conditions) for the euro.

Forecast for May: +6.1%, +5.3%, respectively (preliminary estimate was +6.1% and +5.3%, while the forecast was +6.3%, +5.5%, respectively).

14:00 USD University of Michigan Consumer Confidence Index (preliminary release)

This indicator reflects the confidence of American consumers in the economic development of the country. A high level indicates growth in the economy, while a low level indicates stagnation. Previous indicator values: 59.2 in May, 63.5 in April, 62.0 in March, 67.0 in February, 64.9 in January 2023, 59.7 in December, 56.8 in November, 59. 9 in October, 58.6 in September, 58.2 in August, 51.5 in July, 50.0 in June, 58.4 in May, 65.2 in April, 59.4 in March, 62.8 in February, 67.2 in January 2022. An increase in the indicator will strengthen the USD, and a decrease in the value will weaken the dollar. The data shows uneven recovery of this indicator, which is negative for the USD. Data worse than previous values may have a negative impact on the dollar in the short term.

June forecast: 56.6.

Price chart of EURUSD in real time mode