A plethora of economic events is present today in the forex market economic calendar, some of them which should move the market are the German Consumer Confidence and German Inflation Rate, the UK Consumer Confidence and the Business Confidence in the Eurozone, the US GDP Growth Rate annualized for the first quarter and the Unemployment Rate in Japan. Moderate to high volatility is expected today in the forex market, especially for the Euro, the US Dollar and the Japanese Yen.
These are the main economic events in the forex market today:
European Session
- Germany: GfK Consumer Confidence, Inflation Rate YoY Prel, Spain: Inflation Rate YoY Prel, Business Confidence, Eurozone: ECB General Council Meeting, ECB Economic Bulletin, Business Confidence, Economic Sentiment, Services Sentiment, Industrial Sentiment, Italy: Inflation Rate Prel (YoY, MoM), UK: BoE Haldane Speech, Gfk Consumer Confidence
Time: 06:00 GMT, 07:00 GMT, 08:00 GMT, 09:00 GMT, 10:15 GMT, 12:00 GMT, 13:30 GMT, 23:01 GMT
The Euro today has many important economic events which may influence its short-term trend, starting with the release of the German GfK Consumer Confidence early in the European Session, then the indicators of sentiment related to the business, and services sectors, and later the German yearly Inflation Rate. Higher than expected readings for the Consumer Confidence in Germany, and the Business Confidence, Services Sentiment, Economic Sentiment and Industrial Sentiment in the Eurozone are considered positive and supportive for the Euro. Higher readings of all these mentioned Indexes and Indicators reflect the level of consumer confidence in economic activity, the improvement in business and economic activity in various sectors, their prospects and the state of the overall economy. High levels suggest future upward trends for production and employment and a high level of consumer confidence can stimulate economic expansion.
The forecasts are for a decline for the German Gfk Consumer Confidence at 10.6, lower than the previous reading of 10.7, for the Eurozone a decline for the Business Confidence at 1.4, lower than the previous reading of 1.45, and declines for all the Sentiment Indicators which may influence negatively the Euro.
The yearly German Inflation Rate is expected to decline at the rate of 2.1%, lower than the previous rate of 2.2%. Higher figures for the Inflation Rate in Germany are positive for the Euro as they weigh on the ECB decision to raise the key interest rate sooner than expected, with latest statements mentioning that the key Interest Rate in the Eurozone will remain at current low levels until the mid-year of 2019.
As seen from the chart below the Inflation Rate in Germany has increased significantly in May 2018, above the key level of 2.0%.
“German consumer price inflation rate stood at 2.2 percent year-on-year in May 2018, unchanged from the preliminary estimate and above the previous month’s figure of 1.6 percent. It was the highest rate since February 2017, due to a jump in energy prices and a faster rise in cost of services and food. On a monthly basis, the consumer price index went up 0.5 percent, compared to a flat reading in April.”, Source: Trading Economics.
Higher than expected Inflation Rates in Italy and Spain and a Gfk Consumer Confidence reading in UK should also be supportive for the Euro and the British Pound.
American Session
- US: GDP Price Index QoQ Final, PCE Prices QoQ Final, Core PCE Prices QoQ Final, Corporate Profits QoQ Final, GDP Growth Rate QoQ Final, Fed Bullard Speech, Kansas Fed Manufacturing Index, Fed Bostic Speech, Fed CCAR for Big Banks
Time: 12:30 GMT, 14:45 GMT, 15:00 GMT, 16:00 GMT, 20:30 GMT
The key economic event which most probably will move the US Dollar is the release of the quarterly GDP Growth Rate, expected to decline at the rate of 2.2%, lower than the previous rate of 2.9%. Higher figures for the GDP Growth Rate, the GDP Price Index, Core PCE Prices, Corporate profits and the Kansas Fed Manufacturing Index are considered positive for the US Dollar, indicating a robust expanding economy, inflationary pressures in the economy and strong manufacturing business conditions.
As seen from the above chart, “The US economy expanded an annualized 2.2 percent on quarter in the first quarter of 2018, below 2.3 percent in the advance estimate and market expectations of 2.3 percent. Downward revisions to private inventory investment, residential fixed investment, and exports were partly offset by an upward revision to nonresidential fixed investment, the second estimate showed.”, Source: Trading Economics.
Pacific Session
- New Zealand: Building Permits MoM
Time: 22:45 GMT
The Building Permits show the number of permits for new construction projects, being a leading indicator for the housing market. Higher figures indicate a robust housing market, considered positive for the New Zealand Dollar.
Asian Session
- Japan: Unemployment Rate, Industrial Production (YoY, MoM)
Time: 23:30 GMT, 23:50 GMT
Lower than expected figures for the Unemployment Rate and higher than expected for the Industrial production are considered positive for the Japanese Yen, reflecting a strong labor market and being an indicator of strength in the manufacturing sector. The forecasts are for an unchanged Unemployment Rate at 2.5%, and lower monthly and yearly Industrial Production figures expected at -1.1% and 1.1% accordingly, lower than the previous figures of 0.5% and 2.6% respectively, which may influence negatively the Japanese Yen.
