ForexBall Education: Major market moving events for 35th week of 2015
After Chinese central bank's unexpected move to devalue Yuan, a broad-based sell-off in the US equity markets and continuously falling crude-oil prices reinforced expectations of a more patient Federal Reserve. Expectations that the Fed might be moving away from announcing first rate-hike since 2006 on Sept. 17 dragged the overall US Dollar Index (I.USDX), which measures US Dollar performance against a basket of six major currencies, lower for second consecutive week. Gold and JPY rallied on safe-haven demand while unwinding Dollar long positions lifted EUR to a two-month high level.
Moving to the last full trading week of the month, second release of GDP data from the US and UK are likely to be dominant releases from this week's economic calendar. Other prominent economic releases that could also drive the Forex market includes durable goods, new and pending home sales data for the month of July and the Conference Board's Consumer Confidence index for the month of August. Let's have a brief outlook of some important market moving events lined-up during the course of the week.
This week's prime focus from the US would on the preliminary release (second estimate) of US GDP for the second quarter of 2015, scheduled for release on Thursday. According to the Commerce Department's initial estimates, the US economy grew by 2.3% annualized pace in the second quarter of 2015. Economists are expecting an upward revision of the GDP to show that an annualized economic growth of 3.2%.
The US economic calendar begins with the release of Conference Board's Consumer Confidence index for the month of August and new home sales data for the month of July, both scheduled for release on Tuesday. For the month of July the CB consumer confidence index missed forecast of 100.1 and dropped to 90.9, the lowest level since Nov. 2014, from 101.4 recorded in June. Even amid the current turmoil witness in global financial markets, US consumers are expected to have remained positive during the month of August with the index expected to move higher to 92.8.
From the US housing sector, the release of new home sales data on Tuesday and a forward-looking indicator, pending home sales data, will provide further cues over the health of US housing market. After last week's encouraging US housing data, economists anticipate a pick-up in new home sales during the month of July with consensus estimating the new home sales to reach to a seasonally adjusted annual pace of 512,000 units. Meanwhile, pending home sales data, scheduled for release on Thursday, is also expected to reinforce the strong recovery in the housing sector with is now expected to show a rise of 1.3% in July.
Investors will also have a look at the US manufacturing sector from durable goods orders data for the month of July. Data pertaining to durable goods orders will be keenly watched to further support the optimistic views of the economic growth-trend to continue for the rest of 2015. Durable and core durable goods (excluding transportation items) orders data are scheduled for release on Wednesday. Orders for durable goods, which also includes transportation items, is expected to decline by 0.5% while core durable goods are predicted to gain 0.3%.
From UK, key highlight would be the release of second estimate of UK GDP for the second-quarter of 2015, scheduled for release on Friday. Following a disappointing first-quarter, second-quarter growth figure is expected to reflect continuation of UK economic recovery. The second estimate of UK economic growth for Q2 2015 is expected to match the preliminary release reflecting a growth of 0.7%.
Other economic releases to watch for some short-term trading moves includes German Ifo Business Climate, scheduled for release on Tuesday and data from New-Zealand that includes the release of inflation expectation and trade balance data on Tuesday and Wednesday respectively. Also watch-out for second-quarter release of the Swiss GDP data on Friday, which is expected to register a minor up-tick but still show contraction for second straight quarter. The Swiss GDP is expected to have contracted by 0.1% in Q2 2015 as compared to 0.2% contraction in the previous quarter.
Given the recent fall in the US Dollar, incremental negative news in terms of disappointing US economic data would further reinforce expectations of a delay in the Fed's rate-hike decision, thus paving way for additional near-term weakness for the US Dollar.
Senior Market Analyst
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