The Week Ahead – Monetary Policy, Economic Data, and COVID-19 in Focus

On the Macro

It’s busier week ahead on the economic calendar, with 54 stats in focus in the week ending 20^th August. In the week prior, 40 stats had also been in focus.

For the Dollar:

Retail sales figures will draw plenty of interest on Tuesday. Following impressive NFP numbers, the markets will be expecting positive numbers. Last week’s data, sent mixed messages, however, leaving uncertainty and increased volatility.

On Thursday, the weekly jobless claims data for the 1^st week of August will be in focus, along with Philly FED manufacturing data.

While the Philly FED numbers are key, expect the initial jobless claims data to be of greater influence.

On the monetary policy front, the FOMC Meeting Minutes on Wednesday will also provide plenty of direction. Any talk of tapering should labor market numbers improve would deliver Dollar support.

In the week ending 13^th August, the Dollar Spot Index fell by 0.30% to 92.518.

For the EUR:

It’s a quieter week on the economic data front.

2^nd estimate GDP numbers for the Eurozone will be in focus on Tuesday. Expect any downward revisions to test EUR support. The ECB has raised concerns over growth in the 3^rd quarter. Lowering the bar for the 2^nd quarter would deliver a gloomier outlook.

Finalized inflation figures for the Eurozone on Wednesday and wholesale inflation figures from Germany will also draw interest.

For the week, the EUR rose by 0.30% to $1.1797.

For the Pound:

It’s a busy week ahead on the economic calendar.

Claimant counts, employment change, and the unemployment rate will be in focus on Tuesday. Expect the unemployment rate and claimant count figures to be key.

Also of influence will be inflation and retail sales figures due out on Wednesday and Thursday.

The Pound ended the week down by 0.04% to $1.3866.

For the Loonie:

It’s a busier week ahead on the economic calendar.

Mid-week, inflation will be in focus ahead of ADP employment change and retail sales figures due out on Thursday and Friday.

After a quiet week on the economic data front in the week prior, expect plenty of interest in the numbers.

The Loonie ended the week up 0.31% to C$1.2515 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

Employment figures due out on Thursday will be the only stats for the markets to consider.

Weak numbers, linked to the rise in new COVID-19 cases and containment measures, would weigh on the Aussie Dollar.

On the monetary policy front, however, the RBA meeting minutes due out on Tuesday will also be key.

The Aussie Dollar ended the week up by 0.19% to $0.7370.

For the Kiwi Dollar:

It’s a quiet week ahead. There are no material stats due out of New Zealand to provide the Kiwi Dollar with direction.

While there are no stats to consider, the RBNZ monetary policy decision will have a material impact on Wednesday.

Economic data from New Zealand has been upbeat of late. The markets will be expecting hawkish chatter.

The Kiwi Dollar ended the week up by 0.46% to $0.7042.

For the Japanese Yen:

It’s a busier week ahead.

2^nd quarter GDP numbers will set the tone on Monday.

The focus will then shift to trade data and machinery orders due out on Wednesday.

Inflation figures wrap things up on Friday.

The Japanese Yen rose by 0.60% to ¥109.590 against the U.S Dollar.

Out of China

It’s also a busier week ahead.

Industrial production, retail sales, fixed asset investments, and the unemployment rate are due out on Monday.

Expect the retail sales and industrial production figures to be key.

On the monetary policy front, the PBoC will set the loan prime rates on Friday. The markets are expecting the PBoC to stand pat, however.

The Chinese Yuan ended the week up by 0.03% to CNY6.4774 against the U.S Dollar.

Geo-Politics

Iran and China continue to be the main areas of interest for the markets. News updates from the Middle East, in particular, will need continued monitoring…