The week ahead – Economic data, BoC and ECB to keep markets busy
On the macro
It’s a quieter week ahead on the economic calendar, with 42 stats at the center of the week ending 11e June. During the previous week, 80 statistics had been finalized.
For the dollar:
Earlier this week, JOLT’s trade data and job posting figures are due on Tuesday. With a focus on labor market conditions, expect job openings numbers to be key.
The markets will then have to wait until Thursday to know the figures for inflation and jobless claims.
After the PCE’s basic price index figures for April, a further acceleration in inflationary pressure would increase uncertainty about the Fed’s policy.
However, labor market conditions will have to continue to improve to justify a decision.
Initial jobless claims are therefore likely to fall to fuel speculation on a short-term move.
During the week, the dollar ended the week up 0.12% to 90.136.
For the euro:
It’s a relatively busy week on the economic data front.
At the start of the week, the German economy will be at the center of concerns.
Factory orders, industrial production and trade data are expected Monday through Wednesday.
ZEW sentiment figures for Germany and the Eurozone on Tuesday will also influence.
In the 2sd Halfway through the week, the statistics are lighter, leaving the ECB’s monetary policy decision as Thursday’s main event.
Following assurances from the ECB of unwavering support, markets will be looking for any discussion of reducing the asset purchase program.
However, the ECB’s outlook for inflation and the economy will also be decisive.
Barring a sharp revision to preliminary figures, finalized euro area GDP figures are expected to have a moderate impact on the euro at the start of the week.
The EUR ended the week down 0.21% to $ 1.2167.
For the pound:
It’s a relatively quiet week ahead on the economic calendar.
At the start of the week, BRC’s retail sales figures for May will be the center of attention. With the UK continuing to reopen, we can expect the pound to be sensitive to numbers.
At the weekend, April’s trade, industrial and manufacturing production figures will spark interest.
While business data will influence, expect production numbers to be critical.
Outside of the economic calendar, the markets will also keep an eye on COVID-19 news …
The pound ended the week down 0.22% at $ 1.4157.
For the loonie:
It’s a quiet week ahead on the economic calendar.
On the economic data front, trade data will spark interest on Tuesday. With little for the markets to focus on, expect big influence from data.
The main event of the week, however, will be the BoC’s monetary policy decision.
With the markets expecting the BoC to maintain its policy, this will depend on the BoC’s growth prospects. The last time around, the BoC gave the loonie an unexpected boost.
However, monthly OPEC and IEA reports and inventory numbers will also provide guidance.
The loonie ended the week down 0.07% to C $ 1.2084 against the US dollar.
Outside of Asia
For the Australian dollar:
It’s a quieter week ahead.
Business and consumer confidence figures are due Tuesday and Wednesday.
With business investment and consumer spending being the key to a sustained economic recovery, both sets of numbers will influence.
The Australian dollar ended the week up 0.35% to $ 0.7739.
For the Kiwi-dollar:
It’s also a relatively quiet week ahead.
Retail sales of electronic cards and Business PMI numbers are expected. After the more hawkish-than-expected RBNZ, positive numbers would give the Kiwi another boost.
The Kiwi dollar ended the week down 0.50% to $ 0.7214.
For the Japanese yen:
GDP figures finalized for 1st quarter are due Tuesday. Unless there is a marked overhaul of the preliminaries, however, don’t expect too much influence from the numbers.
At the end of the week, the BSI index of major manufacturing conditions appears for the 2sd quarter will attract interest, however.
The Japanese yen rose 0.30% to 109.52 yen against the US dollar.
Outside of china
May trade data will provide direction to the broader markets at the start of the week.
Recent economic data from China suggests a leveling off …
The inflation figures will also have an influence on Wednesday. As markets expect inflation to pick up again, a sharp acceleration would test support for riskier assets.
The Chinese yuan ended the week down 0.42% to CNY 6.3953 against the US dollar.
There are no major risks to consider in the coming week.
As always, however, markets will need to continue to monitor the Capitol Hill and Beijing talks.
The Iranian presidential election is also approaching …
This article originally appeared on FX Empire