Inflation data will continue to dominate the economic agenda this week. In Canada, the UK, and New Zealand, inflation is expected to decline, while inflationary pressures are expected to intensify in Japan. Traders should also keep a close eye on China’s economic data. With deflationary forces intensifying, weak economic data could lead to massive stimulus, especially during the Chinese Communist Party’s annual meeting. Also, this week, labor market statistics for Great Britain and Australia will be published. A strong labor market is usually a positive factor for the currency, as it allows the central bank to postpone rate cuts. Several big companies are due to report this week. Volatility on stock indices will increase as the reporting period moves towards the middle.
Monday, July 15
On Monday, investors will focus on China’s economic data. GDP is expected to show 5.1% annualized growth, but other data is expected to be weak. It’s worth keeping in mind that this data significantly impacts Asian indices. It’s a bank holiday in Japan.
Main events of the day:
- Chinese GDP (m/m) at 05:00 (GMT+3);
- Chinese Industrial Production (m/m) at 05:00 (GMT+3);
- Chinese Unemployment Rate (m/m) at 05:00 (GMT+3);
- Chinese Retail Sales (m/m) at 05:00 (GMT+3);
- Switzerland Producer Price Index (m/m) at 09:30 (GMT+3);
- Eurozone Industrial Production (m/m) at 12:00 (GMT+3);
- Eurozone Empire State Manufacturing Index (m/m) at 15:30 (GMT+3);
- Canada BoC Business Outlook Survey at 17:30 (GMT+3).
- US Fed Chair Powell Speaks at 19:00 (GMT+3);
- US FOMC Daly Speaks at 23:35 (GMT+3).
Tuesday, July 16
On Tuesday, traders should focus on the Canada Consumer Price Index. Analysts expect that in annual terms, inflation in Canada will continue to decline, which will increase the likelihood that the Bank of Canada (BoC) will begin a down cycle as early as this fall. It might be negative for CAD. Investors will also get an update on US retail sales. This indicator shows how consumers spend money during a high interest rate period. Weak data could trigger a sell-off in the US dollar.
Main events of the day:
- German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
- Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
- Eurozone Trade Balance (m/m) at 12:00 (GMT+3);
- US Retail Sales (m/m) at 15:30 (GMT+3);
- Canada Consumer Price Index (m/m) at 15:30 (GMT+3).
Wednesday, July 17
The main event on Wednesday will be the inflation data in the United Kingdom, Eurozone, and New Zealand. Analysts predict that the inflation in New Zealand will decrease from 4.0% to 3.6% y/y, in the UK is expected to see a slight decrease from 2.0% to 1.9% y/y, while in the Eurozone, analysts predict the same figures. As a rule, lower inflation is accompanied by the weakness of the national currency and vice versa. It is also worth remembering that New Zealand inflation data is published quarterly, which increases its importance.
Main events of the day:
- New Zealand Consumer Price Index (m/m) at 01:45 (GMT+3).
- UK Consumer Price Index (m/m) at 09:00 (GMT+3);
- UK Producer Price Index (m/m) at 09:00 (GMT+3);
- Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
- US Industrial Production (m/m) at 16:15 (GMT+3);
- US Crude Oil Reserves (w/w) at 17:30 (GMT+3).
Thursday, July 18
On Thursday, traders should be interested in the ECB interest rate decision. The ECB is expected to keep the rate on hold at its July meeting. The press conference should focus on France’s future rate path and developments. Investors should also pay attention to the labor market data in Australia and the United Kingdom.
Main events of the day:
- Japan Trade Balance (m/m) at 02:50 (GMT+3);
- Australia Unemployment Rate (m/m) at 04:30 (GMT+3);
- UK Average Earnings Index (m/m) at 09:00 (GMT+3);
- UK Claimant Count Change (m/m) at 09:00 (GMT+3);
- UK Unemployment Rate (m/m) at 09:00 (GMT+3)
- Eurozone ECB Interest Rate Decision at 15:15 (GMT+3);
- Eurozone Monetary Policy Statement at 15:15 (GMT+3);
- US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
- Eurozone ECB Press Conference at 15:45 (GMT+3);
- Eurozone President Lagarde Speaks (m/m) at 17:15 (GMT+3);
- US Natural Gas Storage (w/w) at 17:30 (GMT+3).
Friday, July 19
The most important Friday release for investors will be the inflation rate data in Japan. Analysts expect a slight increase in consumer inflation from 2.5% to 2.7%. Volatility in currency pairs with the Japanese yen will increase the likelihood that the Bank of Japan will continue to raise rates. Investors should also pay attention to the retail sales data in Canada and the United Kingdom.
Main events of the day:
- Japan National Core Consumer Price Index at 02:30 (GMT+3);
- UK Retail Sales (m/m) at 09:00 (GMT+3);
- German Producer Price Index (m/m) at 09:00 (GMT+3);
- Canada Retail Sales (m/m) at 15:30 (GMT+3);
- US FOMC Willaams Speaks at 17:40 (GMT+3);
- US FOMC Bostic Speaks at 19:45 (GMT+3).
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
