.jpg)
Next week, market participants will focus on fresh inflation data from the United States. As you know, inflation data (along with data on GDP dynamics and the state of the labor market) are key for the Fed when planning its monetary policy. Considering the latest macro data coming from the United States, which also indicates a continued slowdown in inflation, the Fed is expected to begin a policy easing cycle in the second half of the year. If the decline in inflation slows down or stops, this will force the Fed leadership to delay easing monetary policy. This is an important fundamental factor in favor of the dollar.
In the week 03/11/2024 – 03/17/2024, market participants will also pay attention to the publication of important macro statistics for Germany, Great Britain, and the Eurozone.
We also note that on the night of Sunday, March 10, North America switches to daylight saving time, which you need to pay attention to.
Note: During the coming week, new events may be added to the calendar and / or some scheduled events may be cancelled. Time is GMT
Sunday, March 10
23:50 JPY Japan GDP 4Q 2023 (final estimate)
GDP is considered an indicator of the overall health of a country’s economy and assesses its growth or decline rate. The Gross Domestic Product report published by the Japanese Cabinet of Ministers expresses in monetary terms the total value of all final goods and services produced by Japan over a given period of time. A growth trend in the GDP indicator is considered a positive factor for the national currency (yen), while a low result is considered negative (or bearish).
In the previous 3rd quarter, the country’s GDP decreased by -0.7% (-2.9% in annual terms) after growing by +1.2% (+4.8% in annual terms) in the 2nd quarter, + 0.9% (+2.7% in annual terms) in the 1st quarter of 2023, zero growth (+0.1% in annual terms) in the 4th quarter of 2022, a decrease of -0.2% ( -0.8% in annual terms) in the 3rd quarter, growth of +0.9% (+3.5% in annual terms) in the 2nd quarter, decline of -0.1% (-0.5% in annual terms) in the 1st quarter of 2022, growth by +1.1% (+4.6% in annual terms) in the 4th quarter of 2021, decline by -0.9% (-3.6% in annual terms) in the 3rd quarter, growth in the 2nd quarter by +0.5% (+1.5% in annual terms) and a fall in the 1st quarter of 2021 by -1.0% (-3 .7% in annual terms).
Data shows a bumpy recovery for Japan’s economy after it collapsed due to the coronavirus pandemic in 2020. Data better than the forecast and previous values will support the yen and Japanese stock indices.
The preliminary estimate was -0.1%.
Monday, March 11
No important macro statistics scheduled to be released.
Tuesday, March 12
07:00 EUR Harmonized Index of Consumer Prices (HICP) in Germany (final release)
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: +3.1% in January, +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 down, 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 data for February turns out to be better than previous values, the euro may strengthen in the short term.
The preliminary estimate was +2.7%.
07:00 GBP Report on the average wages of the British over the last 3 months. Unemployment rate
Every month, the UK Office for National Statistics (ONS) publishes a report on average wages covering the period for the last 3 months, with and without bonuses.
This report is a key short-term indicator of the dynamics of changes in the wages of employees in the UK. Wages growth is a positive factor for the GBP, while a low indicator is negative. Forecast: The March report suggests that average wages with bonuses rose again in the last 3 months calculated (November-January) after rising +5.8%, +6.5%, +7.2%, +7 .9%, +8.1%, +8.5%, +8.2%, +6.9%, +6.5%, +5.8%, +5.9%, +6.0 %, +6.5%, +6.%, +6.1%, +5.5%, +5.2%, +6.4%, +6.8%, +7.0%, + 5.6%, +4.8%, +4.3%, +4.2% in previous periods); wages without bonuses also increased after the growth of +6.2%, +6.6%, +7.3%, +7.7%, +7.8%, +7.8%, +7.8%, + 7.3%, +7.2%, +6.7%, +6.6%, +6.6%, +6.7%, +6.5%, +6.1%, +5, 8%, +5.5%, +5.2%, +4.7%, +4.4%, +4.2%, +4.2%, +4.1%, +3.8% , +3.7%, +3.8% in previous periods). Thus, the data indicates continued growth in wages, which is positive for the pound. If the data turns out to be better than the forecast and/or previous values, the pound is likely to strengthen on the foreign exchange market. Data worse than forecast/previous values will have a negative impact on the pound.
Also at this time, unemployment data in the UK is published. It is expected that for 3 months (November-January) unemployment was at 3.8% (against 4.2%, 4.2%, 4.2%, 4.2%, 4.3%, 4.2% , 4.0%, 3.8%, 3.9%, 3.8%, 3.7%, 3.7%, 3.7%, 3.7%, 3.6%, 3.5% , 3.6%, 3.8%, 3.8%, 3.8%, 3.7%, 3.8%, 3.9%, 4.1%, 4.2%, 4.3% , 4.5%, 4.6%, 4.7%, 4.8%, 4.7%, 4.8%, 4.9%, 5.0%, 5.1%, 5.0% in previous periods).
Since 2012, the UK unemployment rate has fallen steadily (from 8.0% in September 2012). This is a positive factor for the pound; rising unemployment is a negative factor.
If data from the UK labor market turns out to be worse than the forecast and/or the previous value, the pound will be under pressure.
In any case, at the time of publication of data from the British labor market, volatility is expected to increase in the pound quotes and on the London Stock Exchange.
12:30 USD Consumer price indices
Consumer Price Index (CPI) determines changes in the prices of a selected basket of goods and services over a given period and is a key indicator for assessing inflation and changes in consumer preferences. Food and energy are excluded from the Core CPI to provide a more accurate estimate.
A high result strengthens the US dollar because the likelihood of a Fed rate hike increases, while a low result weakens it.
Previous values (annualized):
- CPI: +3.1%, +3.4%, +3.1% +3.2%, +3.7%, +3.7%, +3.2%, +3.0%, + 4.0%, +4.9%, +5.0%, +6.0%, +6.4% (in January 2023),
- Core CPI: +3.9%, +3.9%, +4.0%, +4.0%, +4.1%, +4.3%, +4.7%, +4.8% , +5.3%, +5.5%, +5.6%, +5.5%, +5.6% (in January 2023)
The presented data indicate a continuing slowdown in consumer inflation. It’s also well below the values of 2022, when annual U.S. inflation hit a 40-year high of 9.1% in June. On the other hand, the US inflation is still well above the Fed’s target level of 2%, which will force US Central Bank officials to maintain interest rates at high levels.
If the data is confirmed or turns out to be weaker than forecast, the dollar will most likely react with a short-term decline. The stronger-than-expected data will strengthen the dollar, as it will increase the likelihood of the Fed keeping interest rates at high levels for a longer period of time.
Wednesday, March 13
No important macro statistics scheduled to be released. However, traders should still pay attention to the publication of data on industrial production and GDP in the UK at 07:00. Gross GDP indicates improving economic conditions, which could lead to tighter monetary policy as inflation rises. This usually has a positive effect on the quotes of the national currency. The release of this report usually causes increased volatility in the pound quotes. If the data is worse than expected/previous values, this will have a negative impact on the pound exchange rate.
The volume of industrial production in the UK is an important indicator of the state of the entire country’s economy. The manufacturing sector accounts for a significant share of the British GDP. Improved data compared to forecast and previous values, as well as strong performance will have a positive impact on the pound. If the data turns out to be worse than the forecast and previous values, the pound is likely to decline.
Thursday, March 14
12:30 USD Producer Price Index (PPI). Retail sales. Retail control group
Producer Price Index estimates the average change in wholesale prices determined by manufacturers at all stages of production. It is one of the leading indicators of inflation in the United States measuring the average change in wholesale producer prices.
As rising production costs increase wholesale prices, this ultimately increases consumer inflation. An increase in inflation (in normal economic conditions) usually puts upward pressure on the quotes of the national currency, since it implies a tighter monetary policy of the Central Bank.
Previous values: +0.3% (+0.9% in annual terms) in February, -0.1% (+1.0% in annual terms) in January 2024, 0% (+0.9% in annual terms) in December 2023, -0.5% (+1.3% in annual terms), +0.5% (+2.2% in annual terms), +0.7% (+1.6 % in annual terms), +0.3% (+0.8% in annual terms), +0.1% (+0.2% in annual terms), -0.3% (+0.9% in annual terms), +0.2% (+2.3% in annual terms), -0.5% (+2.7% in annual terms), -0.1% (+4.9% in annual terms), +0.7% (+5.7% in annual terms) in January 2023.
If the data turns out to be better than expected (above forecast values), the dollar is likely to strengthen. And, conversely, data below the forecast and previous values will put pressure on the Fed when it makes its next decision on monetary policy in the direction of easing, which will have a negative impact on the dollar.
Retail sales. This Census Bureau report reflects the total sales of the US retailers of all sizes and types. Changes in retail sales are a leading indicator of consumer spending. The report is a leading indicator and the data may be subject to significant revisions in the future. A high result strengthens the US dollar, a low result weakens it. A relative decrease in the indicator may have a short-term negative impact on the dollar, while an increase in the indicator will have a positive impact on the USD. In the previous month (January), the indicator value was -0.8% (after +0.6% in December 2023, +0.3%, -0.1% +0.7%, +0.6%, + 0.7%, +0.2%, +0.3%, +0.4%, -1.0%, -0.6%, +3.2%, -0.8%, -1, 1%, +1.1%, -0.2%, +0.7%, -0.4%, +1.0% in previous months).
Retail sales are the leading indicator of consumer spending in the United States measuring changes in retail sales. Retail Contol Group measures volume across the entire retail industry and is used to calculate price indices for most products. A strong result strengthens the US dollar, and conversely, a weak report weakens the dollar. A slight increase in indicators is unlikely to accelerate the growth of the dollar. Data worse than the values of the previous period (-0.4% in January 2024, +0.8%, +0.4%, +0.2%, +0.6%, +0.1%, +1.0 %, +0.6%, +0.2%, +0.7%, -0.3%, +0.5%, +2.3%, -0.3%, -0.5%, +0.4%, +0.5%, +0.4%, +1.1% in the previous months of 2022) could negatively affect the dollar in the short term.
Friday, March 12
14:00 USD University of Michigan Consumer Confidence Index (preliminary release)
This indicator reflects the confidence of American consumers in the country’s economic development. A high level indicates economic growth, while a low level indicates stagnation. Previous indicator values: 76.9 in February, 79.0 in January 2024, 69.7 in December 2023, 61.3 in November, 63.8 in October, 68.1 in September, 69.5 in August, 71.6 in July, 64.4 in June, 59.2 in May, 63.5 in April, 62.0 in March, 67.0 in February, 64.9 in January 2023, 59.7 in December, 56.8 in November, 59.9 in October, 58.6 in September, 58.2 in August, 51.5 in July, 50.0 in June, 58.4 in May, 65.2 in April, 59.4 in March, 62.8 in February, 67.2 in January 2022. An increase in the indicator will strengthen the USD, and a decrease in the value will weaken the dollar. Data indicate an uneven recovery of this indicator, which is negative for the USD. Data worse than previous values may have a negative impact on the dollar in the short term.
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.
