Important Economic Events In The Week Ahead

Last week the US Dollar continued with its losing streak against other major currencies despite of better than expected economic releases from the US and even as comments from various US Fed officials hinted that the Fed might be stepping closer to begin tapering its bond-purchase program later this year.

This week, investor spotlight will fall back on a bunch of economic indicators from the US ranging from retail sales, inflation, manufacturing and  housing. Here is an outlook on major economic indicators from the upcoming week’s US economic calendar that could drive currency markets in the week ahead.

US Retail Sales – US Retail sales in June came in softer than expected, while core retail sales that excludes auto sales remained flat as compared to previous month. The US Department of Commerce is scheduled to release July Retail Sales figures on Tuesday. This time around, economists are anticipating retail sales to rise by 0.2% and core retail sales is expected to register a gain of 0.4% for the month of July.

Inflation Data – US headline inflation number measured by Consumer Price Index (CPI) picked-up in June, rising by 0.5%, while core CPI (excluding food and energy) remained stable at 0.2%. The government is scheduled to release July inflation figures on Thursday. This time around both, the headline inflation (CPI) and core CPI, are expected to have advanced 0.2% for the month of July.

Also watch for Producer Price Index (PPI), scheduled for release on Wednesday. Economists expect PPI to show a rise of 0.4% in July, while core PPI, that excludes food and energy is expected to remain muted and rise 0.2%.

Manufacturing Data – In addition to the inflation data, Thursday’s economic data releases include regional manufacturing indices for August and industrial production data for the month of July. The Empire State Manufacturing Index, scheduled for release on Thursday by the New-York Fed, is expected to show a reading of 10.2 for the month of August after rising to 9.5 in July. Further, the Philly Fed Manufacturing Index, scheduled for release on Thursday, is also expected to show improving manufacturing conditions in Philadelphia region and after rising to 19.8 in July, economists are now expecting August month reading of the index to come-in at 15.6. The Industrial Production data, meanwhile, is expected to show a month-on-month growth of 0.5% for the month of July.

Housing Data – The Commerce Department is scheduled to release Building Permits and Housing Starts data on Friday. Building Permits for June slipped to an annualized rate of 0.91 million units from 0.97 million units in May. For the month of July, building permits are expected to rise to 0.95 million annualized rate. Meanwhile, after plunging to 0.84 million units in June, Housing Starts for July are expected to bounce back to a 0.91 million units annual pace.

Other important economic data from the US include Preliminary University of Michigan’s Consumer Sentiment Index, scheduled for release on Friday. The Index’s preliminary reading for August is expected to have improved further to 85.6 from a revised reading of 85.1 in July.

• Absence of any positive news from the US would force US Dollar to continue trending lower. However, stronger than expected economic data could provide some relief for the US Dollar, which has been lagging since the beginning of July.

 

Important economic event from the Euro-zone economic calendar features the ZEW Economic Sentiment (German and Euro-zone). The German ZEW economic sentiment for July showed a weaker reading of 36.3 as compared to 38.5 in June and consensus estimate of 39.8. The German ZEW economic sentiment, scheduled for release on Tuesday, is now expected to show expanding further, rising to 40.3 for the month of August. Meanwhile, the overall Euro-zone index is also expected to advance to 37.4 in August after an unexpected rise to 32.8 in July.

GDP Data – On Wednesday, second quarter GDP figures from Euro-zone’s two largest economies, France and Germany, and composite Euro-zone figures are scheduled for release. After contracting for four consecutive quarters, the flash version of the 17-nation composite GDP data is expected to show a growth of 0.2% in the second quarter of 2013. Meanwhile, Euro-zone’s two largest economies, France and Germany, are expected to have expanded by 0.1% and 0.6% respectively.

Other important economic data to watch from the Euro-zone include Industrial Production, scheduled for release on Tuesday and is expected to register a gain of 1.1% for the month of June.

• Given Euro’s pull-back against USD from around 1.2750 levels in July to 1.3400 in August, recent flow of positive economic indicators from the Euro-zone, signaling improving prospects of economic recovery, already seems to have been priced-in by the market. Moreover, concerns over the prospects of Fed tapering its monetary stimulus is likely to cap any major upside for EURUSD currency pair. Also read: EURUSD – Trading in an Ascending Channel

 

Key economic releases featuring the upcoming UK economic calendar features CPI inflation data for the month of July, labor market reports, retail sales data and minutes of the BoE’s latest policy meeting.

UK CPI has been holding steady near above the 2.5% mark since the beginning of 2013 with the exception of April when the CPI slowed marginally to 2.4%, but still above the BoE’s target to of 2%. The inflation figure for the month of July, scheduled for release on Tuesday, is anticipated to hold steady at 2.8%.

Key events scheduled for release on Wednesday features minutes of BoE’s latest policy meeting that would be keenly watched for a breakdown of MPC votes on the size of BoE’s Asset Purchase Facility and interest rate decision. Further, Labor market reports (claimant count change and unemployment rate) are also scheduled for release on Wednesday and consensus estimates UK unemployment rate to remain elevated at 7.8%, above the 7.0% threshold adopted by the BoE’s.

Given BoE’s guidance on its future monetary policy decisions, a stronger than expected UK CPI and(or) slight improvement in the unemployment rate could possibly trigger further strength for GBP. Also read: GBPUSD Trading Above 200-day SMA Resistance

Original Article: Admiral Markets and hyper link Admiral Markets with http://www.admiralmarkets.com/