The Week Ahead: The G20, the Middle East and Stats in FocusA G20 summit, talks of military strikes in the Middles East and economic data will keep the markets on their toes in the week ahead.
On the Macro
For the Dollar:
It’s a busy week ahead for the Greenback.
June consumer confidence figures, due out on Tuesday, will get things started. A hold onto 130 levels would be considered positive.
Durable goods orders on Wednesday will also provide direction ahead of finalized 1st quarter GDP numbers due out on Thursday.
It’s a busier day on Friday with the FED’s preferred May inflation figures, personal spending and Chicago PMI numbers due out.
While of less influence, housing sector figures due out through the week will also need to be monitored. Mortgage rates have been on the slide, so any dire numbers could raise some red flags…
Barring material deviation from the forecast, we would expect the Michigan Consumer Sentiment index figures and the weekly jobless claims numbers to have a muted impact on the Greenback.
The Dollar Spot Index ended the week down by 1.39% to $96.220.
For the EUR:
It’s a relatively week ahead.
The week kicks off with a bang, with Germany’s IFO Business Climate Index figures due out on Monday. Germany’s consumer climate figures due out on Wednesday will also influence in a quiet 1st half of the week.
Eurozone business confidence numbers on Thursday and French consumer spending figures on Friday will also need to be tracked.
Through the 2nd half of the week, prelim June inflation numbers for Spain, Germany, France, Italy, and the Eurozone will also provide direction. Expect the Eurozone’s annual rate of core inflation on Friday to be the key driver from an inflation perspective.
The EUR/USD ended the week up 1.44% to $1.1369.
For the Pound:
It’s also a relatively quiet week ahead.
The markets will have to wait until Friday for finalized 1st quarter GDP and business investment figures. Barring any shift from prelim, the numbers will likely have a muted impact on the Pound.
April economic indicators have already raised some concerns over what lies ahead, which would likely offset positives from the 1st quarter.
The GBP/USD ended the week up 1.18% at $1.2737.
For the Loonie:
It’s a relatively quiet week ahead.
April wholesale sales figures, due out on Tuesday, will provide direction ahead of a busier Friday. A lack of stats mid-week will leave the Loonie in the hands of market sentiment towards the weekend’s U.S – China trade talks.
Stats due out on Friday include April GDP and May RMPI figures. The GDP number will be the key driver on Friday.
Outside the stats, the BoC will also release its Business Outlook Survey. Expect some movement, though the BoC is unlikely to consider a rate hike any time soon. A rate cut, however…
The Loonie ended the week up 1.43% to C$1.3222 against the U.S Dollar.
Out of Asia
For the Aussie Dollar:
It’s a particularly quiet week ahead. The markets will need to wait until Friday for May private sector credit figures.
Throughout the week, market risk sentiment and U.S economic data will provide direction.
The Aussie Dollar ended the week up 0.79% to $0.6926.
For the Japanese Yen:
May retail sales figures due out on Thursday will provide direction ahead of June inflation figures on Friday.
Prelim industrial production figures, also due out on Friday, will also need to be considered.
The stats will unlikely influence the Yen, however, with market risk appetite remaining the key diver.
We can expect chatter ahead of the G20 Summit to be of material influence on the week. There’s also rising tension in the Middle East to consider.
The Japanese Yen ended the week up 1.14% ¥107.32 against the U.S Dollar.
For the Kiwi Dollar:
It’s a busy week ahead.
Economic data is limited to May trade figures due out on Tuesday and June business confidence figures due out on Thursday.
With the stats are on the lighter side, the market focus will be on Wednesday’s RBNZ monetary policy decision.
The economy held up well in the 1st quarter, suggesting that the RBNZ may hold steady until there is greater clarity on the timing of a FED rate cut.
While the stats are on the lighter side, expect Kiwi Dollar sensitivity to the numbers…
The Kiwi Dollar ended the week up 1.49% to $0.6589.
Out of China:
There are no material stats, leaving the G20 Summit in focus.
Trade Wars: The G20 Summit is scheduled to start on 28th June. Trump and Xi have scheduled to meet. Any chatter ahead of the meeting will impact risk sentiment in the week.
UK Politics: The leadership race is down to the final 2. Domestic woes could make things a little more interesting after Johnson hit the headlines for all the wrong reasons.
Iran: Tensions have risen and the U.S is sending troops to the Middle East. While few expect Iran to cross the line, anything is possible…
For the Kiwi Dollar: The RBNZ monetary policy decision will be in focus. While rates are expected to be left unchanged, will the RBNZ signal the need for further support?
For the Japanese Yen: The BoJ’s May monetary policy meeting minutes, due out on Tuesday, will have a muted impact on the Yen.