The economic data about the Unemployment Rate in Australia, the Retail Sales in UK, the weekly US labor market Continuing Claims and the Philadelphia Fed Manufacturing Survey and the Inflation Rate in Japan are the most market moving events in the economic calendar for today in the forex market. Moderate to high volatility should be expected today in the forex market, especially for the British Pound, as the political uncertainty and the Brexit developments are other factors which can influence the currency other than the most recent fundamental and macroeconomic data.
These are the main economic events in the forex market today to focus on:
European Session
- UK: Retail Sales (YoY, MoM), Retail Sales ex Fuel (YoY, MoM)
Time: 08:30 GMT
The Retail Sales measure the change in the total value of sales at the retail level and are an important indicator of consumer spending and of the state of health for the performance of the retail sector Higher than expected figures are considered positive for the British Pound as increased consumer spending is a key economic factor for higher economic growth measured by the GDP level. Also increased Retail Sales reflect an optimistic outlook for the broader economy for the consumers.
The forecasts are for an unchanged yearly reading for the Retail Sales at 3.9%, a decline for the monthly Retail Sales with an expected figure of 0.4%, lower than the previous figure of 1.3%, while the monthly and yearly Retail Sales excluding fuel are both expected to decline. This may influence negatively the British Pound, whereas a positive economic surprise may add support to the currency.
American Session
- US: Continuing Jobless Claims, Initial Jobless Claims, Philadelphia Fed Manufacturing Survey, Fed Quarles Speech
Time: 12:30 GMT, 13:00 GMT
Lower than expected readings for the Continuing and Initial Jobless Claims are considered positive for the US Dollar, are they reflect current conditions in the labor market. A lower than expected number of people filing for unemployment benefits either for the first time or on a continuing basis has positive implications for consumer spending and economic growth. Some mixed economic data is expected for the US labor market, with an expected decline for the Continuing Jobless Claims at 1.730M, lower than the previous reading of 1.739M, and an increase for the Initial Jobless Claims at 220K, higher than the previous figure of 214K.
The Philadelphia Fed Survey is an index of manufacturing conditions by the Federal Reserve Bank of Philadelphia, providing important insights on manufacturing sector trends, also used as a forecast of the ISM Index. Higher or better than expected readings are considered positive for the US Dollar reflecting strong economic and business conditions in the manufacturing sector. The forecast is for a figure of 22.0, higher than the previous reading of 19.9.
Pacific Session
- Australia: Unemployment Rate, Employment Change, Participation Rate
Time: 01:30 GMT
A decrease of the figure for the Unemployment Rate is considered positive for the Australian Dollar, indicating an expansion within the Australian labor market which can stimulate consumer spending and lead to higher economic growth. Higher than expected figures for the Employment Change are considered supportive for the economy of Australia and can also stimulate economic growth. A high Participation Rate is positive for the local economy as a greater percentage of the population is active in the labor force, and as mentioned before can stimulate consumer growth and the total level of GDP.
“Australia’s seasonally adjusted unemployment rate unexpectedly dropped to 5.4 percent in May of 2018 from 5.6 percent in the prior month while markets expected 5.5 percent. It is the lowest jobless rate since last November, as the economy added 12,000 jobs while the number of unemployed declined by 26,800.”, Source: Trading Economics
The current Unemployment Rate of 5.4% is the lowest jobless rate since last November. In 2018 the Unemployment Rate seems to be stable in the range of 5.4%-5.6%. The forecasts are for an unchanged level of Unemployment Rate at 5.4%, an unchanged level of Participation Rate at 65.5% and an increase for the Employment Change at 17K, higher than the previous figure of 12K. The Employment Change may support the Australian Dollar, whereas the other two readings are considered to have a neutral effect.
Asian Session
- Japan: Inflation Rate (YoY, MoM), Core Inflation Rate YoY
Time: 23:30 GMT
In general, high readings for the Inflation Rate are considered positive for the local currencies as their readings may weigh on the central banks decisions to alter their monetary policy, and tighten it raising the key interest rate. This in economic theory should lead to the appreciation of the local currency, i.e. the Japanese Yen offering a higher return in the form of interest rate to the investors.
“Japan’s consumer price inflation rose to 0.7 percent year-on-year in May of 2018 from 0.6 percent in the prior month and well above market consensus of 0.3 percent. Prices increased at a faster pace for food and transport while cost fell less for housing. Core inflation rate, which excludes fresh food, came in at 0.7 percent, the same as in April and in line with estimates. It remained the lowest figure since September 2017. Monthly, consumer prices went up by 0.1 percent, compared to a 0.4 percent fall in the preceding month and marking the first monthly rise in three months.”, Source: Trading Economics
The forecasts are for increases for the yearly Inflation Rate and Core Inflation Rate at the rate of 0.8% for both, higher than the previous readings of 0.7% again for both. This may influence positively the Japanese Yen.
