ForexBall Education: Major market moving events for 29th week of 2015

Author Haresh Menghani Category Fundamental Analysis 13 Jul 2015 Updated at 02:19 CET
Following a 'No' vote on the creditors' bailout plan in the Greek referendum, last week too Greece continued to make headlines with Greece submitting its latest reform proposal. Eventually on Monday, Greece reached an agreement with its creditors over the reforms needed for the country to receive a third bailout. Last week’s optimism helped the shared currency, Euro, to finish the week higher against the US Dollar. The US Dollar weakness against EUR, however, was negated by its strength against other major currencies, thus helping the overall US Dollar Index (I.USDX) to finish the week with only a marginal loss.
Meanwhile, economic data from the US were mixed with the ISM non-manufacturing index rising in June suggesting improving activity in the US services sector while widening trade balance indicated that a strong dollar might continue hurting exports in the foreseeable future. The US Dollar bulls, however, found some support from FOMC meeting minutes that showed committee members supporting a rate-hike but also expressed their concerns over Greece debt crisis and remained cautious.
As the new trading week begins, investors turn their focus to this week's economic calendar which is full of important market moving releases / events and is likely to provide some trigger for volatile moves in the Forex market. Let's have a look at some important highlights line-up during the course of the week.
US Releases
From the US, release of monthly retail sales figures, inflation data, regional manufacturing indices, housing data accompanied with the Fed Chair Janet Yellen's testimony stand out as the important market moving events for the upcoming week.
On Wednesday and on Thursday, investors will be focusing on Federal Reserve Chair Janet Yellen's semi-annual testimony on monetary policy before the House of Financial Services Committee and the Senate Banking Committee, respectively. The testimony is likely to reiterate the outlook revealed in the FOMC minutes. Investors, however, will scrutinize the question and answer session, to be held following the testimony, in order to seek clarity over the timing of the first interest-rate hike announcement by the Fed.
On economic data front, even as the US economy failed to register any growth in the first quarter of 2015, monthly retail sales data for the month of June is expected to point towards a stronger performance by the US economy in the second quarter of 2015. Following a big jump by 1.2% in May, even surpassing optimistic forecast of 1.1%, retail sales data, scheduled for release on Tuesday, is expected to post a healthy 0.4% rise in June. Meanwhile, core retails sales that excludes automobile sales is also expected to register a gain of 0.7%, down from 1.0% growth recorded in May.
The latest reading on US headline inflation, consumer price inflation (CPI), is scheduled for release on Friday. After a slightly lower-than-expected reading in May, consensus estimate CPI to drop further to register a 0.3% gain in June while core CPI, which excludes the volatile food and energy, is predicted to show a month-on-month rise of 0.2%.
Moving on to the manufacturing data, this week's US economic calendar features the release of industrial production data and two regional manufacturing surveys namely, Empire State Manufacturing Index and Philly Fed Manufacturing Index. The Empire State Manufacturing for July and industrial production data for June are is scheduled for release on Wednesday while Philly Fed Manufacturing Index for the month of July is scheduled for release on Thursday. US manufacturing data is always watched closely in order to gauge the health of manufacturing sector in the world's largest economy.
The release of government's report on building permits and housing starts for the month of June are scheduled for release on Friday. Economists expect the positive momentum in the US housing sector to continue with the number of building permits anticipated to come-in at an annual pace of 1.11 million units and housing starts data to hold steady above the 1.00 million mark to print a reading of 1.09 million units annualized rate.
Positive US economic data, coupled with an up-tick in CPI, would further fuel speculations of a possible rate-hike in September. This would ultimately strengthen the prospects of continuing broad US Dollar rally and would further reinforce the well-established medium-term bullish trend for the US Dollar.
BoJ, ECB and BoC Monetary Policy Decisions
Apart from the US economic data, monetary policy decision announcements from various major central banks namely the Bank of Japan, European Central Bank (ECB) and Bank of Canada (BoC) will also be on investors watch list for the upcoming week.
ECB is scheduled to announce its monetary policy decision on Thursday. Although, ECB is not expected to make any major announcement, a subsequent press conference will be closely scrutinized for the central bank's assessment on inflation and economic growth along with questions on its role in the Greek crisis, which might lead to some volatile move for EUR pairs.
Ahead of the ECB, BoJ is scheduled to announce its monetary policy decision on Wednesday. Considering that the Japanese economic recovery continues to face headwinds, the central bank is unlikely to announce any major changes to its current easy monetary policy and hence is likely to prove as a non-event for the Forex market. The announcement will be followed by a press-conference where market participants will be keen to see BoJ's evaluation of the current economic conditions.
BoC is also scheduled to announce its monetary policy decision on Wednesday where the central bank is unlikely to announce a change to its current monetary policy stance and leave interest rates unchanged. Further, considering the recent Greek drama and scheduled ECB monetary policy decision announcement on Thursday, BoC monetary policy decision is unlikely to have any major impact on the Forex market.
Other Important Releases
Notable economic releases that could have a material impact on GBP includes UK employment reports, scheduled for release on Wednesday. This week's UK labor market report is expected to show the number of people claiming unemployment-related benefits during the month of June declining by 9,300 as compared to a lower-than-expected decline of only 6,500 during May. The unemployment rate is expected to hold steady at 5.5%.
Elsewhere, economic data that could materially impact the Australian Dollar (AUD) includes Chinese GDP data for the second quarter of 2015, scheduled for release on Wednesday. The Chinese GDP is expected to continue pointing towards economic slowdown with consensus estimating a further drop in the year-on-year GDP growth rate to 6.9%, down from 7.0% recorded in the first quarter of 2015.
In addition to this, traders will also watch for inflation data from UK on Tuesday, New-Zealand and Euro-zone on Thursday and from Canada on Friday for some trading opportunities in the respective pairs. Also watch-out for German ZEW Economic Sentiment, scheduled for release on Tuesday.
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