Last week was extremely volatile due to important events and publications of important macro statistics. The focus was undoubtedly on the Fed meeting. But the meetings of the Central Banks of Japan and the UK devoted to monetary policy issues also did not go unnoticed by market participants.
The dollar has maintained positive dynamics as there have been relatively more positive macro data from the United States than from other economically developed countries and regions. The dollar is also in demand as a safe haven asset as the armed conflict between Hamas and Israel escalates in the Middle East.
The next week (06.11.2023 – 12.11.2023) will see fewer important publications of macro statistical data. However, market participants will pay attention to important macro statistics from Germany, China, the Eurozone, New Zealand, the US, UK, as well as the results of the meeting of the RB of Australia.
We also note that this coming weekend, Saturday to Sunday November 5, North America switches to winter daylight saving time (Europe already did this a week earlier).
* during the coming week, new events may be added to the calendar and / or some scheduled events may be cancelled.
** GMT time
Monday, November6
No important macro statistics sceduled to be released. However, traders might want to pay attention to the publication of updated PMI business activity indices (according to S&P Global) for Germany and the Eurozone at 08:55, 09:00. It may increase the volatility in euro quotes, especially if the indicators differ significantly from the preliminary estimate.
Tuesday, November 7
03:30 AUD RBA’s interest rate decision. RBA’s accompanying statement
The main negative factors for the Australian economy are weak wages growth, a weak labor market and a slowdown in growth rates. However, Australia’s economic recovery is accelerating. To contain inflation, which has reached a 20-year high (in the 1st quarter of 2022, headline annual consumer price inflation in Australia was 5.1% and core inflation was 3.7%), the rate was increased by 0.25%, to 0.35% and then to 0.85%, 1.85%, 3.10% (in December 2022), 3.85% in May 2023. In addition, the RBA signaled the likelihood of further increases in the coming months.
“The board will do everything necessary to ensure that inflation in Australia returns to target over time,” head of the central bank Philip Lowe said. “This will require further interest rate increases in the future.”
The RBA forecasts that the unemployment rate could fall to 50-year lows next year. “Given the progress towards full employment and data on prices and wages, some tapering of the emergency monetary support provided during the pandemic is appropriate,” Lowe said.
However, at a meeting in June, the RBA leaders again raised the interest rate to 4.10%. It is not yet entirely clear what the decision of the RBA leaders will be this time, although it is possible that at this meeting the Central Bank of Australia will again raise the interest rate. However, unexpected decisions are also possible, for example, a pause, a decrease or a stronger increase in the interest rate.
In the accompanying statement, the RBA leaders will explain the reasons for the rate decision. If the RBA signals the possibility of easing monetary policy in the near future, the risks of a fall in the Australian dollar will increase. Conversely, tough rhetoric of the RBA’s accompanying statement could provoke a strengthening of the Australian dollar.
Wednesday, November 8
02:00 NZD RB of New Zealand Inflation expectations (for the 4th quarter)
New Zealand inflation expectations. The indicator reflects consumer expectations regarding future annual inflation over the next 24 months. The higher the expectations, the more significant the effect they will have on the likelihood of a rate increase. A high value of the indicator is a positive factor for the NZD.
Previous values (in quarterly terms): +2.83%, +2.79%, +3.3%, +3.62% (in the 4th quarter of 2022).
07:00 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 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, a negative result weakens it.
Previous indicator values: +4.3% in September, +6.4% in August, +6.5% in July, +6.8% in June, +6.3% in May, +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 (in annual terms).
If the data for October turns out to be better than 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 increasing inflationary pressures in Germany, which in turn puts 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 October (in annual terms): +3.0% (preliminary estimate was +3.0% with a forecast of +3.6%).
10:00 EUR Retail sales in the Eurozone
Retail sales are the main indicator of consumer spending showing changes in sales volume in the retail industry. A high result strengthens the euro, and vice versa, a low result weakens it.
Previous values: -1.2% (-2.1% in annual terms) in August, -0.2% (-1.0% in annual terms) in July, -0.3% (-1.4% in annual terms) in June, 0% (-2.4% in annual terms) in May, -1.2% (-2.9% in annual terms) in April, -0.8% (-3.3 % in annual terms) in March, +0.3% (-2.4% in annual terms) in February, -2.7% (-1.8% in annual terms) in January, +0.8% ( -2.8% in annual terms) in December 2022.
The data suggests that retail sales have not yet reached pre-coronavirus levels after falling sharply in March-April 2020, when Europe was under strict lockdown measures. However, the better-than-expected data will likely have a positive impact on the euro.
Thursday, November 9
01:30 CNY Consumer Price Index (CPI)
The National Bureau of Statistics of China will present regular monthly data reflecting the dynamics of consumer prices in China. Rising consumer prices could trigger an acceleration in inflation, which could force the People’s Bank of China to take measures aimed at tightening fiscal policy. Increased growth in consumer inflation may cause the yuan to appreciate, and a weak result will put pressure on the yuan.
China’s economy is the second largest in the world after the US. Therefore, the publication of important macroeconomic indicators of this country has a noticeable impact on global financial markets, primarily on the positions of the yuan, other Asian currencies, the dollar, commodity currencies, as well as on Chinese and Asian stock indices. China is the largest buyer of raw materials and a supplier of a wide range of finished products to the global commodity market.
In September 2023, the value of the consumer inflation index was +0.2% (0% in annual terms), in July +0.3% (+0.1% in annual terms), in June -0.2% (0% in annual terms), in May -0.2% (+0.2% in annual terms).
An increase in the consumer inflation index will have a positive effect on the quotations of the yuan, as well as commodity currencies. However, worse-than-forecast data and a relative decline in CPI may have a negative impact on them. This applies to a greater extent to the Australian dollar, since China is Australia’s largest trade and economic partner.
Friday, November 10
00:30 AUD RBA monetary policy statement
The monetary policy statement provides an overview of economic and financial conditions and an assessment of the risks to financial stability and sustainable economic growth. The statement is a kind of guide for determining the RBA’s monetary policy plans. A tighter stance on the RBA’s monetary policy is seen as positive and strengthens the Australian dollar, while a more cautious stance is seen as negative for the AUD.
07:00 GBP UK GDP for the 3rd quarter (preliminary estimate)
GDP is considered an indicator of the overall health of the British economy. The rising trend of the GDP indicator is considered positive for the GBP. The UK’s GDP was one of the highest in the world until 2016, when the Brexit referendum took place. Subsequently, its growth slowed down, and with the onset of the global coronavirus pandemic, the British GDP growth rate completely moved into negative territory.
Previous GDP values: +0.2% in the 2nd quarter, +0.1% in the 1st quarter of 2023, +0.1% in the 4th quarter of 2022, -0.3% in the 3rd quarter, +0.2% in the 2nd quarter, +0.8% in the 1st quarter of 2022, +1.3% in the 4th quarter, +1.0% in the 3rd quarter, +5 .5% in the 2nd quarter after falling -1.6% in the 1st quarter of 2021. The main factors that could force the Bank of England to keep rates low are weak GDP and labor market growth, as well as low consumer spending. If GDP data turns out to be worse than significantly previous values, this will put downward pressure on the pound. A strong GDP report will strengthen the pound.
15:00 USD University of Michigan Consumer Confidence Index (preliminary release)
This indicator reflects the confidence of American consumers in the country’s economic development. A high level indicates economic growth, while a low level indicates stagnation. Previous indicator values: 63.8 in October, 68.1 in September, 69.5 in August, 71.6 in July, 64.4 in June, 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 indicate an 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.
Price chart of AUDUSD in real time mode
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منبع: https://www.litefinance.org/blog/analysts-opinions/economic-calendar-for-the-week-06112023-12112023/
