The Week Ahead – Stats, Geopolitics, COVID-19, and the Jackson Hole in Focus

On the Macro

It’s a quieter week ahead on the economic calendar, with 42 stats in focus in the week ending 28^th August. In the week prior, 57 stats had been in focus.

For the Dollar:

It’s another busy week ahead on the economic data front.

In the 1^st half, August consumer confidence and July durable and core durable goods orders are due out.

Expect consumer confidence figures on Tuesday and core durable goods orders on Wednesday to be the key drivers.

The focus will then shift to 2^nd estimate GDP numbers and the weekly jobless claims figures on Thursday.

A decline in the jobless claims to sub-1m will be needed on the day… The markets will also be looking for an upward revision to GDP numbers.

On Friday, July inflation and personal spending figures and August’s Chicago PMI will be in focus.

Finalized consumer sentiment figures for August and July trade figures should have a muted impact.

On the monetary policy front, the Jackson Hole Symposium will be in focus on Thursday and Friday. Following last week’s FOMC meeting minutes and positive PMI numbers, Powell will draw plenty of attention.

Away from the economic calendar, geopolitics and the COVID-19 stimulus bill will also be of influence…

The Dollar Spot Index ended the week up by 0.16% to 93.247.

For the EUR:

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

On Tuesday, finalized 2^nd quarter GDP figures and August business sentiment figures are due out of Germany.

Upward revisions to 1^st estimate GDP numbers and steady business sentiment figures would be EUR positive.

The focus will then shift to German consumer confidence figures and finalized 2^nd quarter French GDP numbers on Friday.

As August comes to a rapid close, chatter on Brexit will also be a factor in the week.

The EUR/USD ended the week down by 0.38% to $1.1797.

For the Pound:

It’s also a particularly quiet week ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.

On the monetary policy front, BoE Governor Bailey is due to speak on Friday. Following some quite dire GDP figures for the 2^nd quarter, any chatter on monetary policy will influence. The good news for Bailey is that the private sector PMIs impressed last week…

Away from the economic calendar, Brexit chatter will likely build in the week and will be the key driver.

The GBP/USD ended the week up by 0.03% to $1.3090.

For the Loonie:

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

The markets will have to wait until Friday, however. 2^nd quarter GDP numbers are due out and will have a material impact on the Loonie.

The month-on-month and quarter-on-quarter figures will have the greatest influence.

Away from the economic calendar, sentiment towards the global economic outlook and geopolitics will remain key drivers.

The Loonie ended the week up by 0.67% to C$1.3177 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a quiet week ahead on the economic calendar. Key stats include 2^nd quarter construction work done and new CAPEX figures for the 2^nd quarter.

While we can expect the new CAPEX figures to influence, market risk sentiment will be the key driver.

COVID-19 figures from Australia and key economies including the EU and the U.S will need consideration. There is also U.S – China tension to factor in…

The Aussie Dollar ended the week down by 0.14% to $0.7161.

For the Kiwi Dollar:

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

2^nd quarter retail sales figures on Monday and July trade figures on Wednesday will provide the kiwi with direction.

Away from the calendar, expect chatter from Beijing and Washington to also influence.

The Kiwi Dollar ended the week down by 0.02% to $0.6541.

For the Japanese Yen:

It is a relatively quiet week ahead on the economic calendar.

August inflation figures are due out on Friday. The numbers are unlikely to have any impact on the Yen, however.

Geopolitics and COVID-19 will remain key drivers.

The Japanese Yen ended the week up by 0.75% to ¥105.80 against the U.S Dollar.

Out of China

It’s another quiet week ahead on the economic data front.

There are no material stats due out of China to provide direction.

A lack of stats will leave the Yuan in the hands of any chatter from Beijing and Washington. The markets will be looking for a resumption of trade talks…

The Chinese Yuan ended the week up 0.45% to CNY6.9194 against the U.S Dollar.

Geo-Politics

UK Politics:

Last week there was no progress on fisheries and trade suggesting that the deadlock will remain. With August rapidly coming to an end, one side of the table is going to need to compromise.

If the news wires from the weekend are anything to go by, however, the chances of a no-deal Brexit remain elevated.

We can expect plenty of chatter in the week ahead and influence on the Pound.

U.S Politics:

There were no talks on the weekend over the COVID-19 stimulus package. Negotiations have stalled since the 1^st week of the month.

We can expect more political wrangling in the week ahead, however. As the U.S Presidential Election nears, there is even less reason for either side to yield…

U.S – China Trade Talks

Beijing announced late last week that trade talks are set to resume in the coming days. The U.S administration, however, held back from confirming a return to the negotiating table.

A resumption of trade talks would ease some of the tension stemming from Trump’s attack on China’s tech companies.