Review of the main events of the Forex economic calendar for the next trading week (22.08.2022 – 28.08.2022)
The dollar continues to advance and has fully recovered from the losses of the previous 3 weeks. The DXY dollar index tested the mark and the local resistance level of 108.00again during the European trading session last Friday. The minutes of the July meeting of the Fed published last Wednesday confirmed the intention of the leaders of the American central bank to fight inflation by consistently tightening monetary policy.
The dollar is also restoring demand as a defensive asset, taking away this advantage from other popular defensive assets – gold, yen, and franc.
It seems that the upward correction of the American stock market has also ended: last week its main indices closed in the red.
Next week, market participants will study macro statistics from Germany, the Eurozone, the UK, New Zealand, the US, as well as follow the annual economic forum in Jackson Hole (Wyoming). It will begin on Thursday, August 25, and will be attended by representatives of the world’s leading central banks and economists. Their statements can have a significant impact on the dynamics of financial markets.
* during the coming week, new events may be added to the calendar and / or some scheduled events may be cancelled.
** GMT time
Monday, August 22
01:30 CNY People’s Bank of China interest rate decision
Since May 2012, the People’s Bank of China has been steadily lowering the interest rate, providing support to Chinese manufacturers. The last time the bank lowered the rate was in January 2022 (by 0.1% to 3.70% at the moment).
In 2020, in the context of international trade conflicts and a slowdown in the global economy, the world’s largest central banks took the path of easing their monetary policies in order to support national economies and increase the competitiveness of goods exported from these countries.
The People’s Bank of China is also in line with this process. The depreciation of the yuan has become especially relevant in the last 4-5 years, when the confrontation between the two most powerful economies in the world began. One of the measures to offset the negative consequences of increased duties on the import of Chinese goods into the United States was the depreciation of the national currency of China. Such a measure was intended, among other things, to maintain the previous volumes of imports of Chinese products to the United States, which would be cheaper for American buyers due to the difference in the exchange rates of the national currencies of the United States and China.
Coronavirus has become an additional strong negative factor.
Probably, at this meeting, the People’s Bank of China will keep the interest rate at the same level of 3.70%, although unexpected decisions are not ruled out.
If the People’s Bank of China makes unexpected statements or decisions, volatility could increase throughout the financial market. Investors will also be interested in the bank’s assessment of the consequences of the coronavirus for the Chinese economy and its policies in the near future.
Tuesday, August 23
07:30 EUR Germany Manufacturing PMI according to S&P Global (preliminary release). Composite PMI according to S&P Global (preliminary release)
Manufacturing PMI is an important indicator of the business environment and the general state of the German economy. This sector of the economy forms a significant part of Germany’s GDP. A result above 50 is considered positive and strengthens the EUR, while one below 50 is considered negative for the euro.
Previous monthly values: 49.3, 52.0, 54.8, 54.6, 56.9, 58.4, 59.8, 57.4, 57.4, 57.8, 58.4, 62, 6, 65.9, 65.1, 64.4, 66.2, 66.6, 60.7, 57.1, 58.3, 57.8. The growth of the indicator above the previous values will support the euro (in the short term). Data worse than the forecast and / or the previous value will have a negative impact on the euro.
Composite PMI is an important indicator of business conditions and the overall health of the German economy. A result above 50 is considered positive and strengthens the EUR, while one below 50 is considered negative for the euro. Previous monthly values: 48.1, 51.3, 53.7, 54.3, 55.1, 55.6, 49.9, 52.2, 52.0, 55.5, 60.0, 62, 4, 60.1, 56.2, 55.8, 57.3, 51.1, 50.8, 52.0, 51.7. Data worse than the forecast and / or the previous value will have a negative impact on the euro.
08:00 EUR Composite Manufacturing PMI of the Eurozone economy according to S&P Global (preliminary release)
Manufacturing PMI is an important indicator of the state of the entire European economy. A result above 50 is considered positive and strengthens the EUR, while one below 50 is considered negative for the euro. Previous monthly values: 49.9, 52.0, 54.8, 55.8, 54.9, 55.5, 52.3, 53.3, 55.4, 54.2, 56.2, 59.0, 60.2, 59.5, 57.1, 53.8, 53.2, 62.5, 48.8, 47.8, 49.1, 45.3. Data worse than the forecast and / or the previous value will have a negative impact on the euro.
08:30 GBP UK Services PMI according to S&P Global (preliminary release)
UK services PMI is an important indicator of the state of the British economy. The service sector employs the majority of the UK’s working-age population and generates approximately 75% of GDP. The most important part of the services industry is still financial services. If the data turns out to be worse than the forecast and the previous value, the pound is likely to fall sharply in the short term. Data better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is considered positive and strengthens the GBP, while one below 50 is considered negative for the GBP.
Previous values of the indicator: 52.6 in July, 54.3 in June, 53.4 in May, 58.9 in April, 62.6 in March, 60.5 in February, 54.1 in January, 53.6 in December, 58.5 in November, 59.1 in October, 55.4 in September, 55.0 in August, 59.6 in July, 62.4 in June 2021 after falling to levels of 29.0 in May, 13.4 in April, 34.5 in March 2020.
Wednesday, August 24
12:30 USD Durable goods orders. Capital goods orders (ex defense and aviation)
This indicator reflects the value of orders received by producers of durable goods and capital goods (capital goods are durable commodities used to produce durable goods and services) involving large investments. Goods produced in the defense and aviation sectors of the US economy are not included in this indicator. A high result strengthens the USD. Previous values of the indicator Durable Goods Orders: +1.9% in June, +0.8% in May, +0.5% in April, +1.1% in March, -2.1% in February , +1.6% in January 2022.
Previous values of the indicator Capital Goods Orders ex defense and aviation: +0.5% in June, +0.6% in May, +0.4% in April, +1.3% in March, -0, 2% in February, +0.9% in January 2022.
In theory, the relative growth of the indicator has a positive impact on the dollar, and the decline of the indicator is negative. The market reaction to its negative value may also be negative for the dollar in the short term. Data worse than the previous value and/or the forecast will also have a negative impact on dollar quotes.
Better-than-expected data will have a positive impact on the dollar.
22:45 NZD Retail sales (2nd quarter)
The retail sales report is published by the Bureau of Statistics of New Zealand. The volume of retail sales is usually considered an indicator of consumer expenses. In general, a high value of the indicator is a positive factor for NZD, and a low value is a negative factor. In the 3rd quarter of 2021, the volume of retail sales decreased by -8.1% due to quarantine restrictions in connection with Covid-19, and in the 4th-increased by 8.6%. The NZD will strengthen if the data is better than previous values. A weak report will negatively affect the NZD.
Thursday, August 25
Annual economic symposium in Jackson Hole (Wyoming), which is organized and sponsored by the Fed. At the symposium, representatives of world central banks and economists discuss issues of the global economy and the prospects for the monetary policy of central banks. Statements of representatives of central banks can have a significant impact on national currencies, including the US dollar. The degree of this influence will depend on the tone of the speeches of representatives of the Central Bank.
12:30 USD US annual GDP for the 2nd quarter (second estimate)
GDP data are one of the key indicators (along with the data on the labor and inflation market) for the Fed from the point of view of its monetary policy. A strong result strengthens the US dollar; a weak GDP report negatively affects the US dollar. In the previous 1st quarter, GDP decreased by -1.6% after an increase of +6.9% in the 4th quarter of 2021, +2.3% in the 3rd quarter, in the 2nd quarter of GDP grew by +6, 7%, in the 1st quarter of 2021 – by +6.3%. If the data indicates a decrease in GDP in the 2nd quarter of 2022, the dollar will be under pressure. Positive GDP data will support the dollar and US stock indices.
Forecast: -0.9% (preliminary estimate was -0.9% with a forecast +0.9%).
Friday, August 26
Annual economic symposium in Jackson Hole
14:00 USD Consumer Confidence Index from the University of Michigan (final release)
This indicator reflects the confidence of American consumers in the country’s economic development. A high level indicates an increase in the economy, while a low value indicates stagnation. Previous indicator values: 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. The growth of the indicator will strengthen USD, and a decrease in the value will loosen the dollar. The data indicate the uneven restoration of this indicator, which is negative for the USD. Data worse than previous values can negatively affect the dollar in the short term. Forecast for August: 55.1 (the first rating was 55.1 with a forecast of 52.0).
Price chart of EURUSD in real time mode
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