ForexBall Education: Major market moving events for the upcoming 25th week of 2015

Author Haresh Menghani Category Fundamental Analysis 15 Jun 2015 Updated at 01:44 CET
Last week the US Dollar Index (I.USDX), which measures USD strength against other major currencies, registered its second consecutive week of losses, shrugging off some better-than-expected reading on consumer sentiment and retail sales. Even negotiation between Greece and its creditors that ended in disarray and S&P's downgrade of Greece sovereign credit rating to "CCC" failed to extend any support to the broadly weakening US Dollar. Meanwhile, GBP ended the week with strength supported by positive economic data and AUD too registered gains on the back of good employment report. On the other hand, NZD fell sharply after RBNZ's surprise rate-cut announcement.
 
Moving forward, investor’s focus this week moves to the very important FOMC meeting, which takes the center stage in determining the near-term direction in the Forex market. In addition to the FOMC decision, US economic data, BoJ and SNB monetary policy decisions and development over Greece crisis might continue spurring volatility across financial markets. Here is a brief overview on important events that are likely to impact this week's movement in the Forex market.
 
FOMC Decision
The outcome of the Federal Reserve's two-day monetary policy meeting, starting Tuesday, where consensus is not expecting any rate hike, is scheduled to be announced on Wednesday. Market participants, however, expect the Fed to sound optimistic in the accompanying rate statement. The Fed will also update its projections for inflation and economic growth for the next 2 years. This would be followed by a press conference by the Fed Chairwoman Janet Yellen, where an upbeat economic sentiment led by recent wave of positive economic data and reaffirmation of a rate hike in 2015 would prove positive for the US Dollar.
 
US Housing Data
Investors will also get an update on the US housing sector as the Commerce Department is scheduled to release reports on building permits and housing starts for the month of May on Tuesday. Continuing with its recovery, although at a slower pace, economists are expecting building permits in May to come-in at a seasonally adjusted annual rate of 1.11 million units, while housing starts are also expected to have slowed to 1.10 million units pace in May.
 
Data from US Manufacturing Sector
From the US manufacturing sector, investors will confront the release of two regional manufacturing indices, namely - Empire State Manufacturing Index and Philly Fed Manufacturing Index, scheduled for release on Monday and Thursday respectively. Following a lower-than-expected rise to 3.1 in May, the Empire State manufacturing index is expected to rise and reach 5.8 for June. Meanwhile, the recent sharper-than-anticipated drop in Philly Fed manufacturing index is expected to halt this time, with consensus estimating a minor recovery to 8.1 in June. Also watch out for industrial production data for the month of February, also scheduled for release on Monday.
 
US Inflation Data
The latest reading on US headline inflation, consumer price inflation (CPI), for the month of May is scheduled for release on Thursday. Off late, although minor but a rise in inflation could possibly be signs of a slow but gradual move towards the Fed's target of 2%. Hence, economists this time are expecting CPI to have risen by 0.5% on a month-on-month basis. Meanwhile, the core CPI number, which excludes the volatile food and energy prices, is expected to decline marginally to 0.2% from 0.3% recorded in the previous month.
Important UK Economic Data
From UK, minutes from Bank of England's (BoE) latest monetary policy meeting, UK employment report, inflation data and retail sales data are likely to probe some volatile moves for GBP pairs in the week ahead.
 
BoE Minutes and UK Employment Report
Apart from the Fed, BoE is the only other central bank from major economies to have hinted towards normalizing its monetary policy. Market participants, however, are expecting a unanimous vote for not raising near-term interest rate from this week's minutes, scheduled for release on Wednesday. Meanwhile, should the minutes provide some clues over the timing of a possible rate-hike by the central bank, it could possibly boost near-term demand for GBP pairs, thus triggering a short-term rally. The UK labor market report, also scheduled for release on Wednesday, is expected to show the number of people claiming for unemployment related benefits to decline by 12,500 and the unemployment rate is expected to hold steady at 5.5%.
 
UK Inflation and Retail Sales Data
The latest print of the UK inflation data, which turned negative in April for the first time ever, is scheduled for release on Tuesday. This time, economists are expecting a minor rebound in May with consensus forecast a rise of 0.1%. Meanwhile, consumer spending, which remains supportive pillar of UK's economic recovery, is scheduled for release on Thursday. After rebounding sharply in April, the indicator is expected to show 0.0% growth for the month of May.
 

 
 
 
Other Economic Events / Releases
 
Elsewhere, following an unexpected announcement by RBNZ to cut its benchmark interest rates, quarterly release of New-Zealand GDP, scheduled for release on Wednesday, will be of importance to determine further direction for NZD pairs. This week's GDP data for the first-quarter of 2015 is expected to show economy growing at a slower pace of 0.6% as compared to 0.8% in the last-quarter of 2014.
 
In addition to this, investors will closely scrutinize ECB President Mario Draghi's testimony before the European Parliament's Economic and Monetary Affairs Commity, on Monday. Also the Swiss National Bank (SNB) is scheduled to announce its monetary policy decision and release its quarterly Monetary Policy Assessment on Thursday and this will be followed a press conference by SNB Chairman and Governing Board Members. Traders will also watch-out for monetary policy meeting minutes from RBA and German ZEW economic sentiment, both scheduled for release on Tuesday. The BoJ's is also scheduled to release its monetary policy statement on Friday, but is likely to prove as a non-event for the Forex market. 

 
 
 
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