Today and for the rest of the trading week until Friday, June 1,2018 there is a lot of important economic data, which can move the forex market and present trading opportunities based on the economic releases. Some of the important fundamental news today are the expected figures for the German Unemployment Rate and the Inflation Rate, the US GDP Growth Rate, the BoC Interest Rate Decision, and the Consumer Confidence in UK and Japan. Moderate to high volatility should be expected today in the forex market.
These are the key economic events in the forex market to focus on today:
European Session
- Germany: Retail Sales MoM, Retail Sales YoY, Unemployment Rate Harmonized, Unemployment Rate, Unemployment Change, Inflation Rate YoY Prel, France: GDP Growth Rate QoQ 2nd Est, Spain: Inflation Rate YoY Prel, Business Confidence, Switzerland: KOF Leading Indicators, SNB Chair Jordan Speech, Sweden: GDP Growth Rate YoY, Eurozone: Economic Sentiment, Business Confidence, Services Sentiment, Industrial Sentiment, UK: Gfk Consumer Confidence
Time: 06:00 GMT, 06:45 GMT, 07:00 GMT, 07:30 GMT, 07:55 GMT, 09:00 GMT, 10:15 GMT, 12:00 GMT, 23:01 GMT
There are many economic data releases today which can move significantly the Euro, starting with the German Retail Sales, Unemployment Rate and Inflation Rate, and then with the Economic Sentiment, Business Confidence, Services Sentiment in the Eurozone. Higher than expected figures for the German Retail Sales, the Inflation Rate and all the Sentiment Indicators in the Eurozone, plus lower than expected figures for the German Unemployment Rate should be positive and supportive for the Euro.
As seen from the chart below “Germany’s seasonally adjusted harmonised unemployment rate inched down to 3.4 percent in March of 2018 from 3.5 percent in the previous month. It was the lowest jobless rate since July 1980, as the number of unemployed declined further while employment went up slightly.”, Source: Trading Economics. There is a declining trend for the Harmonized Unemployment Rate in Germany for the past 12-months.
The forecast for the non-Harmonized Inflation Rate in Germany is to remain unchanged at 5.3%, the yearly Retail Sales to decline at 1.2%, lower than the previous reading of 1.3%, the Unemployment Change to increase at -10K, higher than the previous figure of -7K and the yearly Inflation Rate Preliminary to increase at 2.0%, higher than the previous rate of 1.6%.
The forecast for the Economic Sentiment, Business Confidence, Services Sentiment, Industrial Sentiment in the Eurozone are for lower readings for all the mentioned indicators, which may influence negatively the Euro, reflecting less optimism for current economic and business conditions.
For Switzerland a higher than expected figure for the KOF Leading Indicators Index is considered positive, as its aim is to predict the direction of the economy over the following six months, consisting of 12 economic indicators. The forecast is for a lower reading of 104.5, compared to the previous reading of 105.3. Higher figures for the GDP Growth Rate in France and Sweden should be supportive for the local currencies, as should a higher figure of Inflation Rate and Business Confidence in Spain and a higher reading of Gfk Consumer Confidence in UK. For the UK the forecast is for a lower reading of -8 for the Gfk Consumer Confidence, compared to the previous reading of -9, which may influence negatively the British Pound, and may continue its recent depreciation against other currencies, especially against the US Dollar.
American Session
- US: ADP Employment Change, GDP Growth Rate QoQ 2nd Est, Personal Consumption Expenditures Prices QoQ 2 Est, Core Personal Consumption Expenditures Prices QoQ, Corporate Profits QoQ Prel, Wholesale Inventories, API Crude Oil Stock Change, Fed’s Beige Book, Canada: Current Account Q1, BoC Interest Rate Decision
Time: 12:15 GMT, 12;30 GMT, 14:00 GMT, 18:00 GMT
The American Session has two major economic events, the US GDP Growth Rate Annualized for the first quarter and the Bank of Canada Interest Rate Decision. From the chart below we see that the US GDP Growth Rate has been weak in 2018 and has recently peaked at the rate of 3.2% during the summer of 2017.
A higher than expected figure for the Annualized GDP Growth Rate for the first quarter is considered positive reflecting an expansion for the US economy. The forecast is for an unchanged figure of 2.3%. The forecast is also for an unchanged figure of the Core Personal Consumption Expenditures for the first quarter at 2.5%, which is considered as an important indicator of inflation.
Any positive economic surprise with a higher than expected figures released for both the GDP Growth Rate and the Core Personal Consumption Expenditures may provide further support for the US Dollar, and same applies for a higher reading of the ADP Employment Change, reflecting a strong labor market.
Later, there is the important Bank of Canada Interest Rate Decision with the forecast being for an unchanged key interest rate at 1.25%. Again, any economic surprise most probably will prove to be supportive for the Canadian Dollar, with special interest for the statements on the economic conditions in Canada. Same applies later with the release of the Fed’s Beige Book for the economic conditions in the US. The USD/CAD currency pair is expected to witness high volatility also due to the release of the US API Weekly Crude Oil Stock Change, providing an overview of US petroleum demand. Also, for Canada the release of the Current Account is expected, with a trade surplus considered positive, as it encompasses the Trade of Balance. A wider Current Account deficit is expected with a figure of -18.0B Canadian Dollars, wider than the previous deficit of -16.4B Canadian Dollars.
Pacific Session
- New Zealand: RBNZ Governor Orr Speech, Australia: Building Permits YoY, Building Permits MoM
Time: 01:10 GMT, 01:30 GMT
Any statements on monetary policy and current economic conditions may influence the New Zealand Dollar. Higher than expected figures for the Building Permits in Australia are considered supportive and positive for the Australian Dollar, reflecting a strong construction sector and being a key indicator of demand in the housing market. The forecast is for lower monthly and yearly figures for the Building Permits in Australia, which may influence negatively the Australian Dollar.
Asian Session
- Japan: Bank of Japan Governor Kuroda Speech, Consumer Confidence, Industrial Production
Time: 00:00 GMT, 05:00 GMT, 23:50 GMT
Higher than expected figures for the Industrial Production and Consumer Confidence in Japan are considered positive for the Japanese Yen, reflecting a strong industrial sector, and a probable economic expansion with higher consumer spending. The forecast is for a higher Consumer Confidence figure, a higher yearly Industrial Production figure, and a lower monthly Industrial Production figure.
