Today the key economic event in the forex market is the ECB interest rate decision. There are many expectations about it, with a forecast of an unchanged key interest rate, but with an important change and reduction in the monetary stimulus program, asset- purchase program from early next year. Such an announcement if made could add significant volatility for the Euro, as in many cases expectations and investors sentiment move the forex market.
These are the most important economic events in the forex market, which can move currency pairs due to their outcome:
European Session
- Germany GfK Consumer Confidence
Time: 06:00 GMT
Rising consumer confidence is associated in most cases with increased economic growth and expansion. The survey is expected to have an unchanged reading of 10.8, reflecting neutral to stable expectations of consumers about inflation rate and economic outlook.
- Spain Unemployment Rate
Time: 07:00 GMT
Lower unemployment rate will be positive for the Euro and the economy of Spain, contributing to higher future GDP growth. Previous reading was 17.22%.
- Italy Consumer Confidence and Business Confidence, Norway Interest Rate Decision by Norges Bank, Sweden Interest Rate Decision
Time: 08:00 GMT, 07:30 GMT
The Consumer Confidence for Italy is expected to decrease with a reading of 114.9, compared to the previous reading of 115.5, and Business Confidence is also expected to decline with a reading of 110.0, lower than the previous reading of 110.4. Higher readings for Consumer and Business Confidence reflect increased optimism on current and future economic conditions, and are supportive for the Euro. The Norges Bank is expected to keep interest rates unchanged at record lows of 0.50%, which should have a neutral impact on Norwegian Krone fluctuation. Also Sveriges Riksbank, which is Sweden’s central bank is expected to keep the benchmark interest rate unchanged to -0.50%, a decision extended until the middle of 2018, as announced by the central bank. Again this should have minor impact on the Swedish Krona.
- ECB Interest Rate Decision
Time: 11:45 GMT
The expectation is for an unchanged benchmark interest rate of 0.00%, but the focus will be of any statements confirming or suggesting the reduction of the asset-purchase program from next year and a shift in the monetary policy. There are increased odds of significant volatility for the Euro, as at 12:30 GMT the ECB Press Conference will provide more analytical details and information on the monetary decision and the so called “tapering” of the stimulus program.
American Session
- US Wholesale Inventories and Initial Jobless Claims
Time: 12:30 GMT
Wholesale inventories measure the change in the number of inventories for the manufacturing sector. Higher than expected or rising readings indicate a slower economic growth and a weaker demand for manufactured products, and lower consumer spending, being negative for the US Dollar. The forecast is for a reading of 0.4% on a monthly basis, lower than the previous reading of 0.9%. Lower readings for the Initial Jobless Claims are supportive for the US Dollar, reflecting a strong labor market as fewer people file for the first time for unemployment benefits. However the forecast is expected to show a reading of 235K, higher than the previous reading of 222K.
- US Pending Home Sales
Time: 14:00 GMT
Pending Home Sales measure the change in the number of homes that are ready to be sold but await the closing transaction. New construction is excluded from the indicator. Real estate market is tightly connected to the economic conditions. Rising or higher than expected readings for Pending Home Sales are positive for the US Dollar and the US economy, reflecting a strong housing market. On a monthly basis the forecast is for a reading of 0.2%, an increase compared to the previous reading of -2.6%.
- EIA Natural Gas Stocks Change and Fed Kashkari Speech
Time: 14:30 GMT
Natural Gas Stocks Change is a weekly report released by The Energy Information Administration (EIA) and measures the change in the number of cubic feet of natural gas stored during the previous week. It affects more the Canadian Dollar than the US Dollar. In general higher than expected readings of increase in inventories signals a weak demand for the gas and is negative for the natural gas prices. The speech of Neel Kashkari, president and chief executive officer of the Federal Reserve Bank of Minneapolis is important for statements and information on interest rates, economic conditions and growth.
- Kansas Fed Manufacturing Index
Time: 15:00 GMT
The Index measures current manufacturing activity in the Tenth District, and although regional, it has importance about the broader US manufacturing activity, showing trends. Higher readings are positive for the US Dollar.
Asian Session
- Japan Inflation Rate and Core Inflation Rate
Time: 23:30 GMT
Rising inflation rate figures may signal future interest rate increases by the Bank of Japan, a positive factor for the Japanese Yen. The forecast on an annual basis is for a reading of 0.7%, unchanged from the previous reading, but Core Inflation is expected to increase marginally to 0.8%, compared to the previous reading of 0.7%.In many cases the forex market focuses more on Core Inflation as it is more representative of the actual inflationary pressures.
