The Week Ahead: Trade, Stats and the G7 Summit to Drive the Majors

It’s a particularly busy week ahead. The markets will need to monitor updates from the G7 summit, chatter on trade, Brexit and the stats.
Bob Mason
Currencies Symbols

On the Macro

For the Dollar

It’s a packed week ahead on the economic calendar, following a relatively quiet week last week.

July durable goods orders get the week going on Monday, ahead of consumer confidence figures due out on Tuesday.

Expect Dollar and market sensitivity to core orders, which is forecast to be on the softer side. On Tuesday consumer confidence will need to hold steady to avert fears of a slump in spending.

The markets will then need to wait until Thursday for 2nd estimate GDP numbers, pending home sales and trade data.

Barring a material jump, we would expect the jobless claims figures to have a muted impact on the Dollar.

Closing out the week, the FED’s Core PCE Price Index numbers are due out on Friday. Personal spending and Chicago’s August PMI will also influence.

We would expect finalized consumer sentiment figures to have a muted effect, however, on Friday.

Outside of the stats, geopolitics and any FOMC member chatter will also need to be monitored.

The Dollar Spot Index ended the week down up 0.63% to $97.587.

For the EUR

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

Germany’s IFO business sentiment figures are due out on Monday. Any weak numbers will pin the EUR back ahead of 2nd estimate GDP numbers out of Germany on Tuesday.

Expect EUR sensitivity to any downward revisions.

Focus then shifts to German consumer sentiment and employment numbers due out on Wednesday and Thursday. Also of influence is French consumer spending figures on Thursday.

The ECB has stated that there is a material reliance consumer spending, supported by a strong labor market.

Stats on Friday will also influence, with German retail sales figures and Eurozone unemployment numbers due out.

We would expect inflation figures out of Spain, Italy, and the Eurozone to have a relatively muted impact on the EUR. French jobseeker figures from Tuesday and 2nd estimate French GDP figures on Thursday will also likely be brushed aside by the markets.

The EUR/USD ended the week up by 0.49% to $1.1144.

For the Pound

It’s a particularly quiet week ahead on the economic calendar.

There are no material stats due out of the UK to provide the Pound with direction.

The lack of stats leaves the Pound in the hands of Brexit chatter and British politics.

Boris Johnson has sought legal advice on shutting Parliament down for 5-weeks…

The GBP/USD ended the week up by 0.96% to $1.2266.

For the Loonie

It’s a relatively busy week ahead on the data front.

The markets will have to wait until Friday for the stats, however.

2nd quarter GDP and July’s RMPI will provide direction at the end of the week.

Ahead of the numbers, market sentiment towards the global economic outlook and trade war chatter will continue to influence.

The Loonie ended the week down 0.11% to C$1.3283 against the U.S Dollar.

Out of Asia

For the Aussie Dollar

It’s another quiet week ahead on the Economic data. Data is limited to 2nd quarter new capital expenditure figures due out on Thursday and July private sector credit numbers due out on Friday.

Construction work done and building approvals, due out on Wednesday and Friday, will have less influence on the Aussie.

On the geopolitical front, expect the U.S – China trade war and sentiment towards monetary policy and the global economy to also provide direction.

The Aussie Dollar ended the week down by 0.34% to $0.6756.

For the Japanese Yen

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

Core inflation, prelim July industrial production, and July retail sales figures are due out on Friday.

Ahead of the numbers, market risk appetite and sentiment towards monetary policy will continue to provide direction.

The Japanese Yen ended the week up 0.93% to ¥105.39 against the U.S Dollar.

For the Kiwi Dollar

It’s a relatively busy week ahead.

Key stats include July trade figures due out on Monday and August business confidence figures due out on Thursday.

Off less influence on the Kiwi will be building consent numbers due out on Friday.

The Kiwi Dollar ended the week down 0.37% to $0.6405.

Out of China

It’s a quiet week ahead on the economic data front. There are no material stats due out of China until Saturday.

Any further chatter on trade and moves by the Chinese government to support the economy will influence in the week.

On Saturday, private sector PMIs are due out that will set the tone for the following week.

The Yuan ended the week down by 0.75% to CNY7.0956 against the Greenback.

Geo-Politics

Italy Snap General Election: Italy President Mattarella gave party leaders an additional 4-days to form a stable government. The next meeting on Tuesday will likely result in a decision on whether a snap general election is the only way forward. Political uncertainty and a weakening economy is a bad combo…

Trade Wars:  The trade war hit new levels on Friday and, while Trump looks to pass the blame to FED Chair Powell, the pressure will build on the U.S President. Will there be more blows or a change in tactics?

UK Politics: News of British PM seeking legal advice on shutting down parliament for 5-weeks won’t do the Pound any good. With Johnson at the G7 Summit, Brexit chatter will continue to rile the Pound. There’s also the threat of a vote of no confidence to consider. MPs are due back on 3rd September…

G7 Summit: We can expect plenty of chatter from the G7 Summit in France. Trade and Brexit will likely be high on the list. Boris Johnson has an opportunity to discuss further Brexit, while world leaders will also want to focus on trade.

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