Review of the main events of the Forex economic calendar for the next trading week (29.01.2024 – 04.02.2024)


The focus of market participants will certainly be on the Fed meeting. The Fed officials say as usual that “the base case scenario calls for a rate cut sometime in the third quarter, but we need to be careful not to cut rates ahead of time or risk a renewed price spiral.” Head of the Fed Jerome Powell also previously spoke about the premature market expectations regarding the imminent start of easing monetary policy.

Most likely, the interest rate will be kept at the same level of 5.50%. Positive macro data coming from the United States suggests that the labor market and economy remain stable, despite high interest rates from the Fed, which, along with the resumption of inflation, is pushing the US Central Bank to postpone the start of monetary policy adjustment to the second half of the year. Ahead of this Fed meeting, the dollar remains stable.

Also in the week 29.01.2024 – 04.02.2024, market participants will pay attention to the publication of important macro statistics for Australia, Germany, the Eurozone, China, the US, as well as the results of the meeting of the Central Bank of the UK.

* during the coming week, new events may be added to the calendar and / or some scheduled events may be cancelled.

** GMT time

Contents

Monday, January 29

No important macro statistics scheduled to be released.

Вторник 30 Января

00:30 AUDRetail Sales Index

Retail Sales Index is published monthly by the Australian Bureau of Statistics and measures overall retail sales. The index is often considered an indicator of consumer confidence and reflects the health of the retail sector in the near term. A rising index is usually a positive for the AUD; a decrease in the indicator will have a negative impact on the AUD. Previous index value (for November) +2.0% (after -0.4%, +0.9%, +0.3%, +0.5%, -0.8%, +0.8%, 0%, +0.4%, +0.2%, +1.9%, -3.9%, +1.7%, +0.4%, +0.6%, +0.6% , +1.3%, +0.2% in previous months). If the data turns out to be weaker than the previous value, then the AUD may sharply decline in the short term; if it's above the previous values, the AUD is likely to strengthen.

Forecast for December: 2.0%.

07:00 EUR Germany GDP for the 4th quarter (preliminary estimate)

GDP is one of the key indicators (along with data on the labor market and inflation) for the country's Central Bank in terms of its monetary policy. A strong result strengthens the national currency (in this case, the euro); a weak GDP report has a negative impact on the euro. In the previous 3rd quarter of 2023, GDP decreased by -0.1% and by -0.8% in annual terms.

If data points to a contraction in GDP in the 4th quarter of 2023, the euro will come under pressure. Positive GDP data will support it.

10:00 EUR Eurozone GDP for the 4th quarter (preliminary estimate)

GDP is considered an indicator of the overall health of the economy. A rising trend of the GDP indicator is considered positive for the EUR; a weak result weakens the EUR.

Recently, macro data from the Eurozone have been indicating a gradual recovery in the growth rate of the European economy after a sharp decline at the beginning of 2020.

Previous values: -0.1% (0% in annual terms) in the 3rd quarter, +0.1% (+0.5% in annual terms) in the 2nd quarter, -0.1% (+1 .0% in annual terms) in the 1st quarter of 2023, 0% (+1.9% in annual terms) in the 4th quarter of 2022, growth of +0.7% (+4.0% in annual terms) in the 3rd quarter, +0.8% (+4.1% in annual terms) in the 2nd quarter of 2022, +0.6% (+5.4% in annual terms) in the 1st quarter, +0.3% (+4.6% in annual terms) in the 4th quarter, +2.2% (+3.9% in annual terms) in the 3rd quarter, +2.2% (+ 14.3% in annual terms) in the 2nd quarter and a fall of -0.3% (-1.3% in annual terms) in the 1st quarter of 2021.

If the data turns out to be weaker than the forecast and/or previous values, the euro may decline. Data better than forecast may strengthen the euro in the short term, although the European economy is still far from fully recovering even to pre-crisis levels.

15:00 USD Consumer confidence level

Conference Board report contains the results of a survey of approximately 3,000 American households asking respondents to assess the level of current, future economic conditions and the overall economic situation in the United States. American consumers' confidence in the country's economic growth and the stability of their economic situation is a leading indicator of consumer spending, which accounts for the majority of overall economic activity. A high level of consumer confidence indicates economic growth, while a low level indicates stagnation.

Previous indicator values 110.7, 102.0, 102.6, 103.0, 106.1, 117.0, 109.7, 102.3, 101.3, 104.2. An increase in the indicator will strengthen the USD, and a decrease in the value will weaken the dollar.

Wednesday, January 31

00:30 AUD RBA core inflation index by trimmed mean method (for the 4th quarter). Consumer Price Index (4th quarter)

This indicator is published by the RBA and the Australian Bureau of Statistics. It reflects the dynamics of retail prices of goods and services included in the consumer basket. The simple trimmed mean method takes into account the weighted average kernel, the central 70% of the index components. Previous index values: +1.2% (+5.5% in annual terms) in the 3rd quarter, +1.0% (+5.9% in annual terms) in the 2nd quarter, +1.2 % (+6.6% in annual terms) in the 1st quarter of 2023, +1.7% (+6.9% in annual terms) in the 4th quarter of 2022, +1.8% (+6.1% in annual terms) in the 3rd quarter, +1.5% (+4.9% in annual terms) in the 2nd quarter of 2022, +1.4% (+3.7% in annual terms ) in the 1st quarter of 2022, +1.0% (+2.6% in annual terms) in the 4th quarter, +0.7% (+2.1% in annual terms) in the 3rd quarter , +0.5% (+1.6% in annual terms) in the 2nd quarter, +0.3% (+1.1% in annual terms) in the 1st quarter of 2021.

The data suggests easing inflationary pressures. If the indicator value turns out to be worse than forecast, this will likely have a negative impact on the AUD. An increase in the indicator above the forecast should have a positive impact on the AUD in the short term.

Consumer Price Index (CPI) published by the RBA and the Australian Bureau of Statistics measures the dynamics of retail prices of goods and services in Australia. CPI is the most significant indicator of inflation and changes in consumer preferences. A high value of the indicator is a positive factor for the AUD, and a low value is a negative factor. Previous indicator values: +1.2% (+5.4% in annual terms) in the 3rd quarter, +0.8% (+6.0% in annual terms) in the 2nd quarter, +1, 4% (+7.0% in annual terms) in the 1st quarter of 2023, +1.9% (+7.8% in annual terms) in the 4th quarter of 2022, +1.8% (+ 7.3% in annual terms) in the 3rd quarter, +1.8% (+6.1% in annual terms) in the 2nd quarter of 2022, +2.1% (+5.1% in annual terms) in the 1st quarter of 2022, +1.3% (+3.5% in annual terms) in the 4th quarter, +0.8% (+3.0% in annual terms) in the 3rd quarter, +0.8% (+3.8% in annual terms) in the 2nd quarter, +0.6% (+1.1% in annual terms) in the 1st quarter of 2021.

The Australian central bank's CPI inflation target is in the range of 2% – 3%. According to the minutes of one of the RBA's most recent meetings, bringing inflation back to target “further interest rate increases will be required over time” and “further steps will need to be taken in the coming months to normalize monetary conditions in Australia.”

It is worth noting that earlier the RBA minutes stated that “the Central Bank will not raise rates until it reaches the target CPI inflation level of 2-3% on a sustainable basis. This will not happen until 2024.” Now the RBA, like most of the world's other major central banks, faces the challenge of still high inflation.

The expected positive value is likely to support the AUD. If the indicator comes out with a value worse than the forecast, this will negatively affect the AUD in the short term.

01:00 CNY Manufacturing and services PMI from the China Federation of Logistics and Purchasing (CFLP)

This is an important indicator of the state of the Chinese economy as a whole. A result above 50 is considered as positive and strengthens the CNY, while a result below 50 as negative for the yuan. Previous values: 49.0, 49.5, 50.2, 49.3, 49.0, 48.8, 49.2, 51.9, 52.6, 50.1 in January. The relative growth of the index and the value around 50 should have a positive effect on the CNY. Data above 50 indicates an increase in activity, which has a positive effect on the quotes of the national currency. Otherwise, and if the indicator is below 50, the yuan will be under pressure and will probably decline.

A similar Services PMI assesses the state of the service sector in the Chinese economy. A result above 50 is considered positive and strengthens the yuan. Previous values: 50.4, 50.6, 51.7, 51.5, 53.2, 54.5, 56.4, 58.2, 56.3, 54.4 in January. Despite the relative decline, the indicator is still above 50, which is likely to have a positive impact on the yuan quotes. Otherwise, and if the indicator is below 50, the yuan will be under pressure and will probably decline.

07:00 EUR Retail Sales

Retail sales is the main indicator of consumer spending in Germany showing changes in the volume of sales in the retail sector. A high result strengthens the euro, and vice versa, a low result weakens it.

Previous values: -2.5% (-2.4% annualized), +1.1% (-0.1% annualized), -0.8% (-4.3% annualized) , -1.2% (-2.3% annualized), -0.8% (-2.2% annualized), -0.8% (-1.6% annualized), + 0.4% (-2.1% annualized), +0.8% (-4.3% annualized), -2.4% (-8.6% annualized), -1, 3% (-7.1% annualized), -0.3% (-3.8% annualized in January 2023).

Data indicate a continued slowdown in this sector of the German economy. Data better than the forecast and/or the previous value will likely have a positive impact on the euro, but only in the short term.

13:00 EUR Harmonized Index of Consumer Prices (HICP) in Germany (preliminary release)

This index is published by the EU Statistics Office and is calculated on the basis of statistical method agreed between all EU countries. It is an indicator for assessing inflation and is used by the Governing Council of the ECB to assess the level of price stability. A positive result strengthens the EUR, a negative result weakens it.

Previous indicator values: +3.8% in December, +2.3% in November, +3.0% in October, +4.3% in September, +6.4% in August, +6.5% in July, +6.8% in June, +6.3% in May, +7.6% in April, +7.8% in March, +9.3% in February, +9.2% in January, +9.6% in December, +11.3% in November, +11.6% in October, +10.9% in September, +8.8% in August, +8.5% in July, +8 .2% in June, +8.7% in May, +7.8% in April, +7.6% in March, +5.5% in February, +5.1% in January 2022 (annualized).

The data suggests inflation in Germany continues to slow, which in turn puts pressure on the ECB to ease its monetary policy. Data weaker than the previous value will likely have a negative impact on the euro. And, conversely, the resumption of inflation growth could provoke a strengthening of the euro. The growth of the indicator is a positive factor for the euro. If data for January turns out to be better than previous values, the euro may strengthen in the short term.

13:15 USD ADP National Employment Report

Typically, the ADP report on private sector employment has a strong impact on the market and dollar quotes. An increase in the value of this indicator has a positive effect on the dollar. Another increase in the number of employees in the US private sector is expected in January after an increase of 164 thousand in December, 101 thousand in November, 106 thousand in October, 89 thousand in September, 180 thousand in August, 312 thousand in July, 455 thousand in June, 267 thousand in May, 291 thousand in April, 142 thousand in March, 261 thousand in February, 119 thousand in January 2023). A relative increase in the indicator can have a positive impact on dollar quotes, while a relative decrease in the indicator can have a negative impact. The market reaction may be negative, and the dollar may decline if the data turns out to be worse than forecast.

Millions of Americans were previously laid off due to the coronavirus pandemic and related quarantine measures. The bulk of layoffs were concentrated in the tourism and retail sectors. Other important sectors of the economy were also affected. ADP previously reported that the most significant drop in employment was noted in the construction and financial services sectors.

Although the ADP report does not have a direct correlation with the official data of the US Department of Labor on the labor market, which will be published on Friday, the ADP report is often its harbinger having a noticeable impact on the market.

19:00 USD The Fed's interest rate decision. The Fed's monetary policy statement

In 2020, the dollar declined because investors withdrew funds from protective assets to buy riskier and more profitable assets of the stock market, which continued to grow despite the threat of a second wave of the coronavirus epidemic and the associated economic slowdown. The role of the dollar as a defensive asset was also declining. However, in 2021 the situation changed – the dollar strengthened.

Now market participants are waiting for the US central bank to either pause or begin a cycle of easing monetary policy. Economists' wildest predictions are that the Fed will begin cutting interest rates in May or even March 2024.

However, there is also the possibility of another interest rate hike at this meeting, as the Fed Chairman Jerome Powell has repeatedly warned about.

For now, the rate is widely expected to remain unchanged at 5.50% at this meeting.

During the publication of the rate decision, volatility may rise sharply throughout the financial market, primarily in the American stock market and in dollar quotes, especially if the rate decision differs from the forecast or unexpected statements are made by the Fed leaders.

Powell's comments could impact both short- and long-term USD trading. A more hawkish stance on Fed monetary policy is seen as positive and strengthens the US dollar, while a more cautious stance is seen as negative for the USD. Investors want to hear Powell's thoughts on the Fed's future plans for next year.

19:30 USD Press conference of the FOMC (United States Federal Open Market Committee)

The press conference of the US Federal Open Market Committee lasts about an hour. The first part reads the ruling, followed by a series of questions and answers that could increase market volatility. Any unexpected statements by Powell on the Fed's monetary policy will cause increased volatility in dollar quotes and the American stock market.

Thursday, February 1

01:45 CNY Caixin Manufacturing PMI

Caixin Purchasing Managers' Index (PMI) is a leading indicator of the health of China's manufacturing sector. China's economy is the second largest in the world, so the release of important macroeconomic indicators from China can have a strong impact on the entire financial market.

Previous values: 50.8, 50.7, 49.5, 50.6, 51.0, 49.2, 50.5, 50.9, 49.5, 50.0, 51.6, 49.2 (in January 2023).

A relative decrease in the value of the indicator and a deepening into the zone below 50 may negatively affect the yuan quotes, as well as the quotes of such commodity currencies as the New Zealand and Australian dollars; data better than the forecast/previous values will have a positive impact on them.

10:00 EUR Consumer Price Index. Core Consumer Price Index (preliminary release)

Consumer Price Index (CPI) is published by Eurostat and measures changes in the prices of a selected basket of goods and services over a given period. The index is a key indicator for assessing inflation and changes in consumer preferences. A positive result strengthens the EUR, a negative result weakens it.

Previous values (annualized): +2.9%, +2.4%, +2.9%, +4.3%, +5.2%, +5.3%, +5.5%, +6.1%, +6.1%, +7.0%, +6.9%, +8.5%, +8.6% (in January 2023), +9.2%, +10 ,1%, +10.6%, +9.9%, +9.1%, +8.9%, +8.6%, +8.1%, +7.4%, +7.4 %, +5.9%, +5.1% (in January 2022).

If the data turns out to be worse than forecast, the euro may decline sharply in the short term. Data better than the forecast and/or the previous value may strengthen the euro in the short term. The ECB's consumer inflation target is just below 2.0%, and data indicate that inflation in the Eurozone is still high, although there is also a slowing down trend.

Core Consumer Price Index (Core CPI) determines the change in prices of a selected basket of goods and services for a given period and is a key indicator for assessing inflation and changes in consumer preferences. Food and energy are excluded from this indicator to provide a more accurate estimate. A high result strengthens the EUR, while a low result weakens it.

Previous values (annualized): +3.4%, +3.6% +4.2%, +4.5%, +5.3%, +5.5%, +5.5%, + 5.3%, +5.3%, +5.6%, +5.7%, +5.6%, +5.3%, +5.2%, +5.0%, +5, 0%, +4.8%, +4.3%, +4.0%, +3.7%, +3.8%, +3.5%, +3.0%, +2.7% , +2.3% (in January 2022).

If data for January 2024 turns out to be weaker than the previous value or forecast, this could have a negative impact on the euro. If the data turns out to be better than the forecast or the previous value, then the euro will most likely react with an increase in quotations.

Judging by the data presented, inflation in the Eurozone is slowing down, although still at a very slow pace, and this is a negative (in normal economic conditions) factor for the euro.

12:00 GBP Bank of England's interest rate decision. Minutes of the meeting of the Bank of England. Planned volume of asset purchases by the Bank of England. Monetary policy report

Following its December 2021 meeting, the Bank of England unexpectedly raised its key interest rate to 0.25%, thus becoming the first leading central bank to increase borrowing costs since the outbreak of the coronavirus pandemic. In February, the interest rate was increased to 0.50%, in March – to 0.75%, in May – to 1.00%, in December – to 3.50%, and in August 2023 – to 5.25%. Members of the Monetary Policy Committee considered raising borrowing costs in a strong labor market to curb price increases to be appropriate. At the same time, further tightening of monetary policy may be required to bring inflation to the target level of 2.0%.

It is expected that at this meeting the Bank of England will again take a pause in increases, despite the high level of inflation in the country and the fact that positive macro data are coming from the UK, given the difficult geopolitical situation in Europe, in particular in Ukraine. Such a decision could cause the pound to weaken.

Also at this time, the minutes of the Monetary Policy Committee (MPC) of the Bank of England are published with the breakdown of votes for and against raising/lowering the interest rate. The main risks for the UK after Brexit are related to expectations of a slowdown in the country's economic growth, as well as a large current deficit in the UK's balance of payments.

Intrigue about the Bank of England's further actions remains. And in the trading of the pound and futures on the FTSE100 index, there are plenty of trading opportunities during the period when the bank's decision on rates is published.

Also at the same time, the Bank of England's monetary policy report will be published containing an assessment of the economic outlook and inflation. At this time, volatility in pound quotes may increase sharply. One of the main benchmarks for the Bank of England regarding the outlook for monetary policy in the UK, in addition to GDP, is the rate of inflation. If the tone of the report is soft, the British stock market will receive support and the pound will decline. Conversely, the report's tough rhetoric on curbing inflation implying further interest rate hikes in the UK, will lead to a stronger pound.

12:30 GBP Speech by head of the Bank of England Andrew Bailey

Financial market participants expect Andrew Bailey to clarify the situation regarding the future policy of the UK central bank. During speeches by the head of the Bank of England, volatility usually rises sharply in the pound and the London FTSE index if he gives any hints about tightening or easing the monetary policy of the Bank of England. It is likely that Andrew Bailey will also provide explanations regarding the Bank of England’s decision on the interest rate and will touch upon the state and prospects of the British economy after Brexit against the backdrop of a sharp rise in energy prices and inflation. If Bailey does not touch on monetary policy issues, then the reaction to his speech will be weak.

15:00 USD US Manufacturing PMI (from ISM)

The US Manufacturing PMI published by the Institute of Supply Management (ISM) is an important indicator of the health of the US economy as a whole. A result above 50 is considered positive and strengthens the USD, while a result below 50 is considered negative for the US dollar.

Previous indicator values: 47.4 in December, 46.7 in November, 46.7 in October, 49.0 in September, 47.6 in August, 46.4 in July, 46.0 in June, 46.9 in May, 47.1 in April, 46.3 in March, 47.7 in February, 47.4 (in January 2023).

The index is below 50, indicating a slowdown in this sector of the American economy. However, the relative rise is likely to support the dollar. If the indicator falls below the forecast and especially below 50, the dollar may sharply weaken in the short term.

Friday, February 2

13:30 USD Average hourly wages. Non-farm payrolls. Unemployment rate

These are the most important indicators of the state of the labor market in the United States in January.

Previous values: +0.4% in December and November, +0.2% in October, September and August, +0.4% in July and June, +0.3% in May, +0.5% in April , +0.3% in March, +0.2% in February, +0.3% in January and December, +0.6% in November, +0.4% in October, +0.3% in September and August, +0.5% in July, +0.3% in June, May and April, +0.4% in March, 0% in February, +0.7% in January 2022 / +216 thousand in December, +199 thousand in November, +150 thousand in October, +336 thousand in September, +0.187 million in August, +0.157 thousand in July, +0.105 million in June, +0.281 million in May, +0.217 million in April and March, +0.248 million in February, +0.472 million in January, +0.239 million in December, +0.290 million in November, 0.324 million in October, 0.350 million in September 2022 / 3.7% in December and November, 3.9% in October, 3.8% in September and August, 3.5% in July, 3.6% in June, 3.7% in May, 3.4% in April, 3.5% in March, 3.6% in February, 3.4% in January, 3.5% in December, 3.7% in November and October, 3.5% in September, 3.7% in August, 3.5 % in July, 3.6% in June, May, April and March, 3.8% in February, 4.0% in January 2022, respectively.

In general, the indicators can be described as positive. However, predicting the market reaction to the publication of indicators is often difficult because many indicators for previous periods may be revised. Now it will be even more difficult to do this as the economic situation in the US and many other major economies remains inconsistent, with risks of recession and still high inflation. In any case, when data from the US labor market is published, a surge in volatility is expected in trading not only in the USD but throughout the entire financial market. It is likely that the most cautious investors will choose to stay out of the market during this period of time.

15:00 USD University of Michigan Consumer Confidence Index (final release)

This indicator reflects the confidence of American consumers in the country's economic development. A high level indicates economic growth, while a low level indicates stagnation. Previous indicator values: 69.7 in December, 61.3 in November, 63.8 in October, 68.1 in September, 69.5 in August, 71.6 in July, 64.4 in June, 59.2 in May, 63.5 in April, 62.0 in March, 67.0 in February, 64.9 in January 2023, 59.7 in December, 56.8 in November, 59.9 in October, 58.6 in September, 58.2 in August, 51.5 in July, 50.0 in June, 58.4 in May, 65.2 in April, 59.4 in March, 62.8 in February, 67.2 in January 2022 of the year. An increase in the indicator will strengthen the USD, and a decrease in the value will weaken the dollar. Data indicate an uneven recovery of this indicator, which is negative for the USD. Data worse than previous values may have a negative impact on the dollar in the short term.

*) preliminary index value (for January) was 78.8.

Price chart of GBPUSD in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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