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The past trading week was a cross in connection with Good Friday in Catholic countries. Banks and stock exchanges were closed that day. In short, this will be the upcoming trading week: on Monday, banks and exchanges in Catholic countries will also not work, which will affect trading volumes – they will be lower than usual.
However, volatility in the market may increase sharply today, as follows from the publication of important macro statistics from the United States and the Eurozone. This pandemic volatility will peak on Friday with US and Canadian labor market data for March at 12:30 pm (GMT).
The dollar remains stable and generally has positive dynamics, while market participants still adhere to the results of the March Fed meeting and monitor its monetary policy. Despite the contradictory rhetoric from Fed officials, market participants are still counting on 3 interest rate cuts this year and 1 or 2 more next year.
Also in the week 04/01/2024 – 04/07/2024, market participants will pay attention to the publication of important macro statistics for China, Germany, Switzerland, and Australia.
Note: During the coming week, new events may be added to the calendar and / or some scheduled events may be cancelled. Time is GMT
Monday, April 1
In Catholic countries of the world, Christians celebrate Easter Monday. Banks and exchanges are closed there, which will affect trading volumes – they will be lower than usual.
01:45 CNY Caixin Manufacturing PMI
Caixin Manufacturing Purchasing Managers’ Index (PMI) is a leading indicator of the health of China’s manufacturing sector. China’s economy is the second largest in the world, so the release of important macroeconomic indicators from China can have a strong impact on the entire financial market.
Previous values: 50.9, 50.8, 50.8, 50.7, 49.5, 50.6, 51.0, 49.2, 50.5, 50.9, 49.5, 50.0 , 51.6, 49.2 (in January 2023).
A relative decrease in the value of the indicator and a deepening into the zone below 50 may negatively affect the yuan quotes, as well as the quotes of such commodity currencies as the New Zealand and Australian dollars. However, data better than the forecast/previous values will have a positive impact on the quotes.
Forecast for March: 50.9.
14:00 USD US Manufacturing PMI (from ISM)
The US Manufacturing PMI published by the Institute of Supply Management (ISM) is an important indicator of the health of the US economy as a whole. A result above 50 is considered positive and strengthens the USD, while a result below 50 is considered negative for the US dollar.
Previous indicator values: 47.8, 49.1 in January 2024, 47.4 in December, 46.7 in November, 46.7 in October, 49.0 in September, 47.6 in August, 46.4 in July, 46.0 in June, 46.9 in May, 47.1 in April, 46.3 in March, 47.7 in February, 47.4 in January 2023.
The index is below 50, indicating a slowdown in this sector of the American economy. However, the relative rise is likely to support the dollar. If the indicator falls below the forecast and especially below 50, the dollar may sharply weaken in the short term.
Forecast for March: 48.0.
Tuesday, April 2
00:30 AUD Minutes from the last meeting of the Reserve Bank of Australia
This document is published two weeks after the meeting and the decision on the interest rate. If the RBA is positive about the state of the country’s labor market, GDP growth rates, and is also hawkish about the inflation outlook for the economy, markets view this as a higher likelihood of a rate hike at the next meeting, which is a positive factor for the AUD. The bank’s soft rhetoric regarding inflation primarily puts pressure on the AUD.
During the recent (March 2024) meeting, the RBA took a pause again, keeping the interest rate at 4.35%. However, the RBA signaled the possibility of a further increase if inflation begins to accelerate.
Currently, annual inflation in Australia remains at 4.1%. However, the leaders of the Australian Central Bank expressed hope that the current restrictive policy will contribute to the return of inflation to target levels in the range of 2.0% – 3.0%.
“Whether further tightening of monetary policy will be required to ensure inflation returns to target within a reasonable time frame will depend on incoming data and evolving risk assessments,” they said.
If the published minutes contain unexpected information regarding the RBA’s monetary policy issues, the volatility in AUD quotes will increase.
12:00 EUR Harmonized Index of Consumer Prices (HICP) in Germany (preliminary estimate)
This index is published by the EU Statistics Office and is calculated on the basis of statistical method agreed between all EU countries. It is an indicator for assessing inflation and is used by the Governing Council of the ECB to assess the level of price stability. A positive result strengthens the EUR, a negative result weakens it.
Previous indicator values: +2.7%, +3.1% in January 2024, +3.8% in December, +2.3% in November, +3.0% in October, +4.3% in September, +6.4% in August, +6.5% in July, +6.8% in June, +6.3% in May, +7.6% in April, +7.8% in March, +9.3% in February, +9.2% in January, +9.6% in December, +11.3% in November, +11.6% in October, +10.9% in September, +8 .8% in August, +8.5% in July, +8.2% in June, +8.7% in May, +7.8% in April, +7.6% in March, +5.5 % in February, +5.1% in January 2022 (annualized).
The data suggests inflation in Germany continues to slow, which in turn puts pressure on the ECB to ease its monetary policy. Data weaker than the previous value will likely have a negative impact on the euro. And, conversely, the resumption of inflation growth could provoke a strengthening of the euro. The growth of the indicator is a positive factor for the euro. If the data for March turns out to be better than previous values, the euro may strengthen in the short term.
Wednesday, April 3
01:45 CNY Caixin Services PMI
Caixin Purchasing Managers’ Index (PMI) is a leading indicator of the health of China’s services sector. China’s economy is the second largest in the world, so the release of important macroeconomic indicators from China can have a strong impact on the entire financial market.
Previous values: 52.5, 52.7 (in January 2024), 52.9, 51.5, 50.4, 50.2, 51.8, 54.1, 53.9, 57.1, 56 ,4, 57.8, 55.0, 52.9 (in January 2023).
Although a value above 50 indicates growth, a relative decrease in the indicator may negatively affect the yuan quotes.
09:00 EUR Consumer price index. Core Consumer Price Index (preliminary release)
Consumer Price Index (CPI) is published by Eurostat and measures changes in the prices of a selected basket of goods and services over a given period. The index is a key indicator for assessing inflation and changes in consumer preferences. A positive result strengthens the EUR, a negative result weakens it.
Previous values (annualized): +2.6%, +2.8% (in January 2024), +2.9%, +2.4%, +2.9%, +4.3%, +5.2%, +5.3%, +5.5%, +6.1%, +6.1%, +7.0%, +6.9%, +8.5%, +8 .6% (in January 2023), +9.2%, +10.1%, +10.6%, +9.9%, +9.1%, +8.9%, +8.6 %, +8.1%, +7.4%, +7.4%, +5.9%, +5.1% (in January 2022).
If the data turns out to be worse than forecast, the euro may decline sharply in the short term. Data better than the forecast and/or the previous value may strengthen the euro in the short term. The ECB’s consumer inflation target is just below 2.0%, and data indicate that inflation in the Eurozone is still high, although there is also a slowing down trend.
Core Consumer Price Index (Core CPI) determines the change in prices of a selected basket of goods and services for a given period and is a key indicator for assessing inflation and changes in consumer preferences. Food and energy are excluded from this indicator to provide a more accurate estimate. A high result strengthens the EUR, while a low result weakens it.
Previous values (annualized): +3.1%, +3.3% (in January 2024), +3.4%, +3.6% +4.2%, +4.5%, + 5.3%, +5.5%, +5.5%, +5.3%, +5.3%, +5.6%, +5.7%, +5.6%, +5, 3%, +5.2%, +5.0%, +5.0%, +4.8%, +4.3%, +4.0%, +3.7%, +3.8% , +3.5%, +3.0%, +2.7%, +2.3% (in January 2022).
If data for March 2024 turns out to be weaker than the previous value or forecast, this could have a negative impact on the euro. If the data turns out to be better than the forecast or the previous value, then the euro will most likely react with an increase in quotations.
Judging by the data presented, inflation in the Eurozone is slowing down, although still at a very slow pace, and this is a negative factor for the euro (in normal economic conditions).
12:15 USD ADP National Employment Report
Typically, the ADP report on private sector employment has a strong impact on the market and dollar quotes. An increase in the value of this indicator has a positive effect on the dollar. Another increase in the number of employees in the US private sector is expected in March after an increase of 140 thousand in February, 111 thousand (in January 2024), 158 thousand in December, 104 thousand in November, 111 thousand in October, 137 thousand in September, 135 thousand in August, 307 thousand in July, 543 thousand in June, 206 thousand in May, 293 thousand in April, 103 thousand in March, 275 thousand in February, 131 thousand (in January 2023).
A relative increase in the indicator can have a positive impact on dollar quotes, while a relative decrease in the indicator can have a negative impact. The market reaction may be negative, and the dollar may decline if the data turns out to be worse than forecast.
Although the ADP report does not have a direct correlation with the official data of the US Department of Labor on the labor market, which will be published on Friday, the ADP report is often its harbinger, having a noticeable impact on the market.
14:00 USD Services PMI (from ISM)
This indicator assesses the state of the services sector in the US economy. This sector accounts for about 80% of American GDP. The share of production of material goods is approximately 20% of GDP (of which 1% is for agriculture and 18% for industrial production). Therefore, the publication of services sector data has a significant impact on the dynamics of the dollar. A result above 50 is considered a positive factor for the USD.
Previous values: 52.6 in February, 53.4 (in January 2024), 50.6 in December, 52.7 in November, 51.8 in October, 53.6 in September, 54.5 in August, 52 .7 in July, 53.9 in June, 50.3 in May, 51.9 in April, 51.2 in March, 55.1 in February, 55.2 (in January 2023), 49.6 in December , 56.5 in November, 54.4 in October, 56.9 in August, 56.7 in July, 55.3 in June, 55.9 in May, 57.1 in April, 58.3 in March, 56 .5 in February, 59.9 (in January 2022).
Another increase in the indicator should have a positive impact on USD quotes. However, a relative decline in the index, especially below 50, could have a short-term negative impact on the dollar.
Thursday, April 4
06:30 CHF Consumer Price Index
Consumer Price Index (CPI) reflects the dynamics of retail prices for a group of goods and services included in the consumer basket. The CPI index is a key indicator of inflation. Active movement of the franc in the foreign exchange market will occur around its publication.
In the previous reporting month (February), consumer inflation increased by +0.6% (+1.2% in annual terms) after growing in January by +0.2% (+1.3% in annual terms), December by +1.7%, in November by +1.4% and in October by +1.7% (in annual terms).
An indicator value below the forecast/previous value could provoke a weakening of the franc, since low inflation will force the Swiss Central Bank to adhere to a loose monetary policy. Conversely, a strong result will be a bullish factor for the CHF.
Friday, April 5
00:30 AUD Balance of trade
The indicator (balance of trade) evaluates the relationship between the volumes of exports and imports. Increased exports from Australia lead to a larger trade surplus, which has a positive impact on the AUD. Previous values (billion Australian dollars): 11.027 in February, 10.959 in January, 11.437 in December, 7.129 (for October), 6.184 (for September), 10.161 (for August), 7.324 billion Australian dollars (for July), 10.268 billion Australian dollars dollars (for June), 10.497 billion Australian dollars (for May), 10.454 billion Australian dollars (for April), 14.974 billion Australian dollars (for March), 14.129 billion Australian dollars (for February), 10.963 billion Australian dollars (for January 2023). A decline in the trade surplus could have a negative impact on the Australian dollar. Conversely, an increase in the trade surplus is a positive factor for the AUD.
09:00 EUR Retail sales in the Eurozone
Retail sales are the main indicator of consumer spending showing changes in sales volume in the retail industry. A high result strengthens the euro, and vice versa, a low result weakens it.
Previous values: +0.1% (-1.0% annualized) in January 2024, -1.1% (-0.8% annualized) in December, -0.3% (-1. 1% annualized) in November, +0.1% (-1.2% annualized) in October, -0.3% (-2.9% annualized) in September, 1.2% ( -2.1% annualized) in August, -0.2% (-1.0% annualized) in July, -0.3% (-1.4% annualized) in June, 0% (-2.4% annualized) in May, -1.2% (-2.9% annualized) in April, -0.8% (-3.3% annualized) in March, + 0.3% (-2.4% annualized) in February, -2.7% (-1.8% annualized) in January, +0.8% (-2.8% annualized) in December 2022.
The data suggests that retail sales not only have not reached pre-coronavirus levels after falling sharply in March-April 2020, when strict quarantine measures were in effect in Europe, but are declining again. However, the better-than-expected data will likely have a positive impact on the euro.
12:30 CAD Unemployment rate in Canada
Statistics Canada will publish data on the country’s labor market for March. Since 2020, unemployment has increased in Canada amid widespread business closures due to coronavirus and layoffs among other things. Unemployment rose from the usual 5.6% – 5.7% to 7.8% in March and to 13.7% in May 2020.
In February 2024, unemployment was at 5.8% against 5.7% in January, 5.8% in December and November 2023, 5.7% in October, 5.5% in September, August and July, 5 .4% in June, 5.2% in May, 5.0% in April, March, February, January, December, 5.1% in November, 5.2% in October and September, 5.4% in August , 4.9% in July and June, 5.1% in May, 5.2% in April, 5.3% in March, 5.5% in February, 6.5% in January 2022.
If unemployment continues to rise, the Canadian dollar will decline. If the data turns out to be better than the previous value, the Canadian dollar will strengthen. A decrease in the unemployment rate is a positive factor for the CAD, while an increase in unemployment is a negative factor.
12:30 USD Average hourly wages. Non-farm payrolls. Unemployment rate
These are the most important indicators of the state of the labor market in the United States in March.
Previous values: +0.1% in February, +0.6% in January 2024, +0.4% in December and November 2023, +0.2% in October, September and August, +0.4% in July and June, +0.3% in May, +0.5% in April, +0.3% in March, +0.2% in February, +0.3% in January and December, +0, 6% in November, +0.4% in October, +0.3% in September and August, +0.5% in July, +0.3% in June, May and April, +0.4% in March, 0% in February, +0.7% in January 2022 / +275 thousand in February, +353 thousand in January 2024, +216 thousand in December 2023, +199 thousand in November, +150 thousand in October, +336 thousand in September, +0.187 million in August, +0.157 thousand in July, +0.105 million in June, +0.281 million in May, +0.217 million in April and March, +0.248 million in February , +0.472 million in January, +0.239 million in December, +0.290 million in November, 0.324 million in October, 0.350 million in September 2022 / 3.9% in February, 3.7% in January 2024, December and November 2023, 3.9% in October, 3.8% in September and August, 3.5% in July, 3.6% in June, 3.7% in May, 3.4% in April, 3.5 % in March, 3.6% in February, 3.4% in January, 3.5% in December, 3.7% in November and October, 3.5% in September, 3.7% in August, 3, 5% in July, 3.6% in June, May, April and March, 3.8% in February, 4.0% in January 2022, respectively.
In general, the indicators can be described as positive. However, predicting the market reaction to the publication of indicators is often difficult, because many indicators for previous periods may be revised. Now it will be even more difficult to do this, because the economic situation in the US and many other major economies remains inconsistent with risks of recession and high inflation. In any case, when data from the US labor market is published, a surge in volatility is expected in trading not only in the USD, but throughout the entire financial market. It is likely that the most cautious investors will choose to stay out of the market during this period of time.
Price chart of EURUSD in real time mode
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.
