Weekly review for 23 - 27 May 2016 by LiteForex
Volatility in the pairs with the USD is expected to rise due to the data scheduled for the release this week.
After the release of the minutes of the FOMC meeting last Wednesday, the USD significantly strengthened against the major currencies last week, with the exception of the pair GBP/USD, which has reached 2-week highs after the release of the British retail sales data and online survey, which showed that 50% of the British population is against the country’s exit from the EU.
The minutes of FOMC meeting says that if the data in Q2 shows economic growth in the country, improvements in the labor market and approach of inflation to the target of 2%, it will be appropriate to raise interest rate in June.
Now, investors try to work out action plan in case the US Fed will adopt such decision, while Fed executives try to convince market participants that chances of the interest rate increase in June are high.
Last week the USD has strengthened against major counterparts and oil prices have grown.
Important statistics of this week are as follows:
05:05 (GMT+2) – Speech by the head of RBA Glenn Stivens.
08:00 – German GDP for Q1. German economy is the driving force of economy of Eurozone. German macro-economic statistics have a strong impact on the price of Euro and European stock indices.
11:00 – Index of business expectations and ZEW sentiment index of Germany and Eurozone.
22:30 – American Petroleum Institute (API) will issue report on changes in oil inventories over the past week.
00:45 – New Zealand’s trade balance for April.
08:00 – Consumer confidence index in Germany for June.
10:00 – Index of economic expectations and business optimism in Germany for May.
11:00 – ZEW index of economic expectations in Switzerland for May. This index and the indicator of consumption UBS, which will be released earlier (08:00) can affect Franc if they do not coincide with the forecast.
16:00 – Interest rate decisions by the Bank of Canada. Changes are not expected and the rate is likely to be left at the previous level of 0.5%, and in the following up comments the Bank of Canada may confirm its adherence to the soft monetary policy.
16:30 – US Department of Energy will issue weekly report on oil inventories in the US warehouses.
09:15 – Industrial production in Switzerland in Q1. Swiss economy is slowing down. The level of industrial production in the previous quarter fell by 4.5% (-7.7% on the annual basis).
10:30 – British preliminary GDP for Q1. It is expected that GDP in the UK will rise by 0.4% (+2.1% on annual basis). Negative data will have a negative impact in the price of Pound.
14:30 – The data on orders for durable goods in the USA. This data shows the price of orders, received by the manufacturers of the durable goods in April, which makes provisions for the large investments. This is an important indicator of the state of the US economy, which affects the USD.
15:00 – speech by Deputy president of RBA, Mr. Debelle.
16:00 – pending home sales in the USA. This index shows the state of the US real estate market. Positive data will add momentum to the rise in the USD.
00:30 – Speech by RBA deputy Mr. Debelle.
01:05 – British consumer price index for May.
01:30 – Important Japanese statistics for April – May.
14:30 – Preliminary US statistics for Q1, including price index GDP, annual GDP, price index and personal consumption expenditures. In advance of the Fed meeting in 14-15 June, this data will have a strong impact on the interest rate decisions by the US Fed.
16:30 – Speech by Janet Yellen, the head of the US Fed.
At the end of this trading week, volatility is expected to be high due to the statistic releases and speeches by the Banks’ representatives. Note that this is the last week of May. Next week, market participants will await the release NFPR for May.