The Week Ahead: Economic Data; Trade; and UK Politics Will Be in Focus

It’s another action-packed week ahead. Central bank chatter, trade, UK politics, and economic data will keep the markets on their toes.
Bob Mason
Currency exchange notice board

On the Macro

For the Dollar:

It’s a particularly busy week ahead for the Greenback.

The April JOLTs job openings report kicks things off on Monday, with the latest nonfarm payroll numbers creating greater interest into Monday’s numbers.

May wholesale inflation and consumer price numbers due out on Tuesday and Wednesday will also drive the Dollar. FED Chair Powell had spoken last week and the markets will look for any signs of softer inflation.

Following a relatively quiet Thursday, it’s a busy day on Friday.

May retail sales and industrial production numbers are due out along with April business inventory figures. Later in the day, prelim June inflation figures are also due out.

We can expect the Wednesday inflation figures and Friday retail sales figures to have the greatest impact on the week.

Outside of the stats, sentiment towards trade and FED monetary policy will influence through the week.

The Dollar Spot Index ended the week down 1.23% to $96.544.

For the EUR:

It’s a quieter week ahead.

May prelim inflation figures are due out of Spain, Germany, France, and Italy through the week. Forecasts are for a pickup in inflationary pressures that would be EUR positive.

The Eurozone’s April industrial production figures are due out on Thursday and will also provide the EUR with direction.

Outside of the stats, geopolitical risk will play a hand in the EUR’s path through the week.

The EUR/USD ended the week up 1.48% to $1.1334.

For the Pound:

It’s a busy first half of the week.

April industrial and manufacturing production figures are due out on Monday alongside April’s trade data and GDP numbers. The focus will be on the production and GDP figures at the start of the week.

Employment and wage growth figures due out on Tuesday will also have a material impact on the Pound.

May house price figures due out on Thursday will have a lesser influence on the Pound.

Outside of the stats, expect Brexit chatter and the race to become the next British PM to also influence on the week.

The GBP/USD ended the week up 0.86% to $1.2737.

For the Loonie:

It’s a relatively quiet week ahead. Economic data is limited to housing sector figures that will likely have a muted impact on the Loonie.

China trade data and industrial production figures due out on Monday and Friday will impact crude oil prices and ultimately the Loonie.

On the oil front, OPEC and the IEA’s monthly reports will also have a hand in the Loonie’s week.

On the political front, expect trade war chatter to also influence.

The Loonie ended the week up 1.84% to C$1.3267 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively busy week ahead.

Business confidence and consumer sentiment figures are due out on Tuesday and Wednesday.

With the RBA’s concerns over consumer consumption, we can expect the consumer sentiment number to have a greater impact.

Rounding off the week, May employment numbers due out on Thursday will also provide the Aussie Dollar with direction.

From outside of Australia, China’s trade data, due out on Monday and industrial production figures due out on Friday will also influence.

The Aussie Dollar ended the week up 0.91% to $0.7001.

For the Japanese Yen:

Finalized 1st quarter GDP numbers due out on Monday will provide further evidence of the impact of the ongoing U.S – China trade war on the Japanese economy.

Later in the week, the BSI Large Manufacturing Conditions Index for the 2nd quarter and April industrial production figures are due out on Thursday and Friday.

While the stats will give an idea of what lies ahead, the Yen will continue to reflect risk market sentiment on the week.

The Japanese Yen ended the week up 0.09% to ¥108.19 against the U.S Dollar.

For the Kiwi Dollar:

It’s a relatively quiet week ahead.

May electronic card retail sales figures are due out on Wednesday, which will provide direction for the Kiwi.

At the end of the week, May Business PMI figures will also influence.

Outside of the stats, expect economic data out of China to also provide direction on the week.

The Kiwi Dollar ended the week up 2.05% to $0.6665.

Out of China:

May trade data due out on China will provide the global financial markets with direction on Monday.

We can expect both, import and export figures to influence.

May inflation figures will have a more muted impact ahead of Friday’s industrial production, fixed asset investment and retail sales figures.

We expect the markets to watch the industrial production and retail sales figures closely.

Outside of the numbers, trade war chatter will remain the key driver. Any hint of progress would offset any negative numbers.

Geo-Politics

Trade Wars:  Further action is expected in the week. The U.S and Mexico resolved their differences on Friday, placing attention firmly back on China ahead of the G20 Summit later this month.

UK Politics: There’ll be plenty of attention placed on UK Parliament. Front runners to replace Theresa May will continue to keep Brexit a hot topic in the week.

The Rest

Monetary Policy:

RBA Governor Kent speaks on Wednesday morning, with ECB President Draghi speaking later in the day. Following last week’s ECB press conference and EUR gains, Draghi may look to put pressure on the EUR…

Later in the week, BoE Governor Carney is also scheduled to speak. The markets will be looking for any signs of a shift in forward guidance. Carney had only recently spoken of a likely need to push rates higher at a more aggressive pace to curb inflation.

Crude Oil:

Both OPEC and the IEA will release their monthly reports in the week ahead. While the U.S – China trade war and sentiment towards the economic outlook continues to pressure crude oil prices, supply numbers will come into the picture and could ease the pressure…

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