The Easter Holiday thin trade market conditions will end today, as liquidity and forex market participants will return to the forex market, with the key event of RBA Interest Rate Decision having the potential to move the Australian Dollar. There is plenty of economic data related to the economies of Germany, Switzerland, Russia and UK in the European Session, and only two Speeches from Fed officials in the American Session, with some minor importance economic data.
These are the main economic events to focus on today in the Forex market:
European Session
- Germany Retail Sales, Spain Unemployment Change and Markit Manufacturing PMI, Switzerland Retail Sales and SVME Manufacturing PMI, Italy Markit/ADACI Manufacturing PMI, Germany Markit Manufacturing PMI Final
Time: 06:00 GMT, 07:00 GMT, 07:15 GMT, 07:30 GMT, 07:45 GMT, 07:55 GMT
The Euro can move based on the outcome of the Retail Sales in Germany, and the figures of PMI Indexes for Spain, Italy and Germany. Higher than expected or rising figures for the PMI Indexes indicate expansion for the Manufacturing Sector and increased business and economic activity, being positive for the Euro.
The forecasts are for declines for all PMI Indexes, and for a decline for the Retail Sales in Germany on a yearly basis. The Retail Sales in Germany are expected to increase at 2.2% on a yearly basis, lower than the previous figure of 2.2%, but to increase on a monthly basis, with a figure of 0.7%, higher than the previous figure of -0.7% Overall mixed economic data is expected for the Euro. Retail Sales are very important as they are correlated with economic growth, higher Retail Sales should lead to higher economic growth measured by GDP. The Unemployment Change in Spain is expected to decrease significantly, which is positive for the Euro, while the Retail Sales in Switzerland are expected to be negative on a yearly basis, although better compared to the previous year, and the SVME Manufacturing PMI is expected to decline, both figures should be considered negative for the Swiss economy, and the Swiss Franc.
- Eurozone Markit Manufacturing PMI Final, Spain Consumer Confidence, UK Markit/CIPS Manufacturing, Russia GDP Growth Rate
Time: 08:00 GMT, 08:30 GMT, 13:00 GMT
Both PMI Indexes for Eurozone and the UK are expected to decline, although having figures above the 50.0 level which indicates expansion in the Manufacturing Sector. This data should be considered negative for the Euro and the British Pound, while higher than expected or increased Consumer Confidence in Spain should be supportive for the Euro. The main event is the GDP Growth Rate in Russia, which in the event of a positive economic surprise could move the Russian Ruble probably causing its appreciation against other currencies. From the graph there is evident an uptrend for the GDP Growth in Russia and economic expansion as of 2016.
Russia’s gross domestic product expanded by 1.5 percent year-on-year in 2017, compared with a 0.2 percent contraction in 2016.
American Session
- Fed Kashkari Speech, IBD/TIPP Economic Optimism, Total Vehicle Sales, API Crude Oil Stock Change, Fed Brainard Speech
Time: 13:30 GMT, 14:00 GMT, 19:00 GMT, 20:30 GMT
The Investor’s Business Daily (IBD), TechnoMetrica Institute of Policy and Politics (TIPP) Economic Optimism Index rates the economic conditions providing a six-month economic outlook, with figures above the 50.0 level indicating optimism for the economy. The higher the figure, the more optimism exists for the US economy, being positive for the US Dollar. The forecast is for a figure of 54.9, lower than the previous figure of 55.6.
Higher Total Vehicle Sales are considered positive for the US Dollar, reflecting increased consumer spending and probably higher future economic growth. The forecast is for a figure of 17.08 Million, marginal higher than the previous figure of 16.9 Million. The American Petroleum Institute reports inventory levels of US crude oil, providing an overview of the US petroleum demand. In general if the increase in crude inventories is more than expected, then this implies a weaker expected demand and is considered negative for crude prices.
Pacific Session
- Australia RBA Interest Rate Decision
Time: 04:30 GMT
As seen from the chart, the key Interest Rate in Australian has been declining as of 2013 being stable for a long time at the level of 1.5%. The forecast is for an unchanged level at 1.5%. Any positive economic surprise with an interest rate increase should be positive for the Australian Dollar. The probabilities for a change in the key interest rate are very low, which it should have a neutral effect on the Australian Dollar, with low to moderate volatility and price action.
The Forex market will focus on the statements of the Reserve Bank of Australia, as any indication of a future monetary policy shift due to economic conditions may add volatility for the Australian Dollar.
