Review of the main events of the Forex economic calendar for the next trading week (04.03.2024 – 10.03.2024)

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 February after an increase of 107 thousand in January, 158 thousand in December, 101 thousand in November, 106 thousand in October, 89 thousand in September, 180 thousand in August, 312 thousand in July, 455 thousand in June, 267 thousand in May, 291 thousand in April, 142 thousand in March, 261 thousand in February, 119,000 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 the forecast.

Millions of Americans were previously laid off due to the coronavirus pandemic and related quarantine measures. The bulk of layoffs were concentrated in the tourism and retail sectors. Other important sectors of the economy were also affected. ADP previously reported that the most significant drop in employment was noted in the construction and financial services sectors.

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.

14:45 CAD Bank of Canada’s interest rate decision. Accompanying statement from the Bank of Canada

Following the meetings held in 2022 and 2023, the Bank of Canada decided to increase the interest rate (to 5.00% currently) and spoke out in favor of further increases.

However, since the September 2023 meeting, Bank of Canada policymakers have kept the interest rate at 5.00%.

They also recognized that the uncertainty caused by high geopolitical tensions in the world, as well as the slowdown of the world’s largest economies – Chinese, American, European – which will be accompanied by a decrease in demand for oil, Canada’s main export, could weaken economic growth amid the high inflation.

It is possible that the Bank of Canada will take a break again at its meeting on Wednesday.

The tough tone of the Bank of Canada’s accompanying statement regarding rising inflation and the prospect of further tightening of monetary policy will cause the Canadian dollar to strengthen. If the Bank of Canada signals the need for loose monetary policy, the Canadian currency will decline.

Thursday, March 7

00:30 AUD Balance of Trade

The indicator 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): 10.959 in February, 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 (for June ), AUD 10.497 billion (for May), AUD 10.454 billion (for April), AUD 14.974 billion (for March), AUD 14.129 billion (for February), AUD 10.963 billion (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.

13:15 EUR ECB’s rate decision

The ECB will publish its decision on the key rate and the deposit rate. The ECB’s tough position on inflation and the level of key interest rates helps to strengthen the euro, while a soft position and rate cuts weaken the euro. Given the high level of inflation in the Eurozone, according to the ECB management, the balance of risks to the economic prospects of the Eurozone “remains skewed in the negative direction.”

“The Governing Council believes that interest rates will still need to be raised significantly… to ensure a timely return of inflation to the medium-term target of 2%,” the ECB said in a statement following its December meeting.

According to ECB leaders, “inflation is too high” and “the ECB intends to reduce it to 2% in a timely manner.”

The ECB believes that GPP growth may decline due to the energy crisis in the EU, high uncertainty, weakening global economic activity, and tightening financing conditions. However, the recession should not drag on too long, although strong growth should not be expected either.

Thus, if we follow these signals from the ECB leaders, at the end of this meeting the key interest rate and the ECB rate on deposits for commercial banks will remain at the same level. Although, the option of a tougher decision and an increase in interest rates up to 4.75% and 4.25%, respectively, and a pause in increases cannot be ruled out.

This decision (pause) is supported, for example, by the fact that consumer inflation in the Eurozone is still gradually slowing down, while the threat of recession in the region remains.

13:45 EUR ECB press conference. ECB monetary policy statement

The press conference will be of primary interest to market participants. During the conference, a surge in volatility is possible not only in euro quotes, but throughout the entire financial market if the ECB leaders make unexpected statements. The ECB leaders will assess the current economic situation in the Eurozone and comment on the bank’s decision on rates. In previous years, following the results of some ECB meetings and subsequent press conferences, the euro exchange rate could move by 3%-5% in a short time.

A soft tone of the statements will have a negative impact on the euro. Conversely, a tough tone from the ECB leaders regarding the central bank’s monetary policy will strengthen the euro.

Friday, March 8

10:00 EUR Eurozone GDP for the 4th quarter (3rd estimate)

GDP is considered an indicator of the overall health of the economy. The rising trend of the GDP indicator is considered positive for the EUR; a weak result weakens the EUR.

Recently, macro data from the Eurozone have been indicating a gradual recovery in the growth rate of the European economy after a sharp decline at the beginning of 2020.

Previous values: -0.1% (0% in annual terms) in the 3rd quarter, +0.1% (+0.5% in annual terms) in the 2nd quarter, -0.1% (+1 .0% in annual terms) in the 1st quarter of 2023, 0% (+1.9% in annual terms) in the 4th quarter of 2022, growth of +0.7% (+4.0% in annual terms) in the 3rd quarter, +0.8% (+4.1% in annual terms) in the 2nd quarter of 2022, +0.6% (+5.4% in annual terms) in the 1st quarter, +0.3% (+4.6% in annual terms) in the 4th quarter, +2.2% (+3.9% in annual terms) in the 3rd quarter, +2.2% (+ 14.3% in annual terms) in the 2nd quarter and a fall of -0.3% (-1.3% in annual terms) in the 1st quarter of 2021.

If the data turns out to be weaker than the forecast and/or previous values, the euro may decline. Data better than forecast may strengthen the euro in the short term, although the European economy is still far from fully recovering even to pre-crisis levels.

Forecast for the 4th quarter of 2023: 0% (+0.1% in annual terms). The preliminary estimate was 0% (+0.1% in annual terms).

13:30 CAD Unemployment rate in Canada

Statistics Canada will publish data on the country’s labor market for February. Since 2020, unemployment has increased in Canada, including amid widespread business closures due to coronavirus and layoffs. Unemployment rose from the usual 5.6% – 5.7% to 7.8% in March and to 13.7% in May 2020.

In January 2024, unemployment was at 5.7% against 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.

13:30 USD Average hourly wages. Non-farm payrolls. Unemployment rate

The most important indicators of the state of the labor market in the US for February.

Previous values: +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 / +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 / 3.7% 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 still 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