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The dollar has maintained its position on the foreign exchange market after the publication of inflation data in the United States indicating its acceleration. Macro data published last week, in particular the data on retail sales volumes, also turned out to be positive, and the rhetoric of statements made by representatives of the Fed continues to remain moderately tough.
Now, many economists believe that the Fed may even postpone the interest rate cut until next year if the next inflation data, which will be released in mid-May, confirms the acceleration of inflation in the United States.
In the week of 22.04.2024 – 28.04.2024, market participants will pay attention to the publication of important macro statistics from Germany, the Eurozone, the US, the UK, Australia, Japan, as well as the results of the Bank of Japan’s meeting.
Note: During the coming week, new events may be added to the calendar and / or some scheduled events may be cancelled. GMT time
Monday, April 22
No important macro statistics scheduled to be released.
Tuesday, April 23
07:30 EUR Manufacturing and Services PMI according to S&P Global. Composite PMI according to S&P Global (preliminary release)
Manufacturing and services PMIs are important indicators of business conditions and the overall health of the German economy. These economic sectors form a significant part of Germany’s GDP. A result above 50 is seen as positive and strengthens the EUR, while a result below 50 is negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro.
Previous values:
- Manufacturing PMI: 41.9, 42.5, 45.5, 43.3, 40.8, 39.6, 38.8, 40.6, 43.2, 44.5, 44.7, 46 ,3, 47.3, 47.1, 46.2, 45.1, 47.8, 49.1, 49.3, 52.0, 54.8, 54.6,
- Services PMI: 50.1, 48.3, 47.7, 45.7, 48.2, 50.3, 52.3, 54.1, 57.2, 56.0, 53.7, 50 ,9, 50.7, 49.2, 46.1, 46.5, 45.0, 47.7, 49.7, 52.4, 55.0, 57.6, 56.1, 55.8 ,
- Composite PMI: 47.7, 46.3, 47.0, 47.4, 45.9, 46.4, 48.5, 50.6, 53.9, 54.2, 52.6, 50.7 , 49.9, 49.0, 46.3, 45.1, 45.7, 46.9, 48.1, 51.3, 53.7, 54.3, 55.1, 55.6.
08:00 EUR Eurozone Manufacturing and Services PMI according to S&P Global. Composite PMI according to S&P Global (preliminary release)
The Eurozone Manufacturing and Services PMI is an important indicator of the health of the entire European economy. A result above 50 is seen as positive and strengthens the EUR, while a result below 50 is negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro.
Previous values:
- Manufacturing PMI: 46.1, 46.5, 46.6, 44.4, 43.1, 47.2, 42.7, 43.4, 44.8, 45.8, 47.3, 48 .5, 48.8 (in January 2023),
- Services PMI: 51.5, 50.2, 48.4, 48.8, 47.8, 48.7, 50.9, 52.0, 55.1, 56.2, 55.0, 52 .7, 50.8 (in January 2023),
- Composite PMI: 50.3, 49.2, 47.9, 47.6, 46.5, 47.2, 48.6, 52.8, 54.1, 53.7, 52.0, 50.3 , 49.3 (in January 2023).
08:30 GBP UK Manufacturing and Services PMI according to S&P Global. Composite PMI according to S&P Global (preliminary release)
The UK Manufacturing and Services PMIs are important indicators of the health of the UK economy. The services sector employs the majority of the UK’s working population and contributes approximately 75% of GDP. The most important part of the service industry is still financial services. If the data turns out to be worse than the forecast and the previous value, then the pound will most likely decline sharply in the short term. Data better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is considered as positive and strengthens the GBP, while a result below 50 is negative for the GBP.
Previous values:
- Manufacturing PMI: 50.3, 47.5, 47.0, 46.2, 44.8, 44.3, 45.3, 46.5, 47.1, 47.8, 47.9, 49 ,3, 47.0, 45.3, 46.5, 46.2, 48.4,
- Services PMI: 53.1, 53.8, 54.3, 53.4, 49.5, 49.3, 51.5, 53.7, 55.2, 55.9, 52.9, 53 ,5, 48.7, 49.9, 48.8, 48.8, 50.0, 50.9, 52.6,
- Composite PMI: 52.8, 53.0, 52.9, 52.1, 48.7, 48.5, 50.8, 52.8, 54.0, 54.9, 52.2, 53.1 , 48.5 (in January 2023).
13:45 USD US Manufacturing and Services PMI according to S&P Global. Composite PMI according to S&P Global (preliminary release)
PMI indices in the most important sectors of the US economy prepared by S&P Global are important indicators of the state of the American 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 PMI indicator values:
- Manufacturing PMI: 51.9, 52.2, 50.7, 47.9, 50.0, 49.8, 49.0, 46.3, 48.4, 50.2, 47.3, 46, 9, 46.2, 47.7, 50.4, 52.0, 51.5,
- Services PMI: 51.7, 52.3, 52.5, 51.4, 50.6, 50.1, 52.3, 54.4, 54.9, 53.6, 50.6, 46, 8, 44.7, 46.2, 47.8, 49.3, 43.7, 47.3, 52.7, 53.4, 55.6.
- Composite PMI: 52.1, 52.5, 52.0, 50.9, 50.7, 50.2, 52.0, 53.2, 54.3, 53.4, 52.3, 50.1, 46.8 (in January 2023).
Wednesday, April 24
01:30 AUD RBA core inflation index using the trimmed mean method (for the 1st quarter). Consumer Price Index (1st quarter)
This indicator is published by the RBA and the Australian Bureau of Statistics. It reflects the dynamics of retail prices of goods and services included in the consumer basket. The simple trimmed mean method takes into account the weighted average kernel, the central 70% of the index components. Previous index values: +0.8% (+4.2% in annual terms) in the 4th quarter of 2023, +1.2% (+5.5% in annual terms) in the 3rd quarter, +1 .0% (+5.9% in annual terms) in the 2nd quarter, +1.2% (+6.6% in annual terms) in the 1st quarter of 2023, +1.7% (+6 .9% in annual terms) in the 4th quarter of 2022, +1.8% (+6.1% in annual terms) in the 3rd quarter, +1.5% (+4.9% in annual terms ) in the 2nd quarter of 2022, +1.4% (+3.7% in annual terms) in the 1st quarter of 2022, +1.0% (+2.6% in annual terms) in 4- 1st quarter, +0.7% (+2.1% in annual terms) in the 3rd quarter, +0.5% (+1.6% in annual terms) in the 2nd quarter, +0.3% (+1.1% in annual terms) in the 1st quarter of 2021.
The data suggests easing inflationary pressures. If the indicator value turns out to be worse than forecast, this will likely have a negative impact on the AUD. An increase in the indicator above the forecast should have a positive impact on the AUD in the short term.
Consumer Price Index (CPI) published by the RBA and the Australian Bureau of Statistics measures the dynamics of retail prices of goods and services in Australia. CPI is the most significant indicator of inflation and changes in consumer preferences. A high value of the indicator is a positive factor for the AUD, and a low value is a negative factor. Previous values of the indicator: +0.6% (+3.4% in annual terms) in the 4th quarter of 2023, +1.2% (+5.4% in annual terms) in the 3rd quarter, +0 .8% (+6.0% in annual terms) in the 2nd quarter, +1.4% (+7.0% in annual terms) in the 1st quarter of 2023, +1.9% (+7 .8% in annual terms) in the 4th quarter of 2022, +1.8% (+7.3% in annual terms) in the 3rd quarter, +1.8% (+6.1% in annual terms ) in the 2nd quarter of 2022, +2.1% (+5.1% in annual terms) in the 1st quarter of 2022, +1.3% (+3.5% in annual terms) in 4- 1st quarter, +0.8% (+3.0% in annual terms) in the 3rd quarter, +0.8% (+3.8% in annual terms) in the 2nd quarter, +0.6% (+1.1% in annual terms) in the 1st quarter of 2021.
The Australian central bank’s CPI inflation target is in the range of 2% – 3%. According to the minutes of one of the RBA’s most recent meetings, bringing inflation back to target may “require further interest rate increases over time” and “further steps will need to be taken in the coming months to normalize monetary conditions in Australia.”
It is worth noting that earlier the RBA minutes stated that “the Central Bank will not raise rates until it reaches the target CPI inflation level of 2-3% on a sustainable basis. This will not happen until 2024.” Now the RBA, like most of the world’s other major central banks, faces the challenge of high inflation.
The expected positive value is likely to support the AUD. If the indicator comes out with a value worse than the forecast, this will negatively affect the AUD in the short term.
12:30 USD Durable goods orders. Capital goods orders (ex defense)
Durable goods are solid products with an expected lifespan of more than 3 years, such as automobiles, computers, appliances, and aircraft. These products require significant investment to produce. Durable goods orders data is a leading indicator that reflects changes in the total value of new orders received by manufacturers. Rising orders for these products indicate that manufacturers are increasing activity to fill these orders.
Capital goods are durable goods used to produce other goods and services. The current indicator does not take into account goods produced in the defense and aviation sectors of the US economy.
Positive data strengthens the dollar, while negative data has a negative impact on the dollar. Any deterioration in the indicator compared to previous values and/or forecast may also have negative consequences for the dollar quotes, while better data than the forecast will have a positive impact on it.
- Previous values of the indicator “Durable goods orders” : +1.4%, -6.1%, +0.6%, +0.4%, -0.3% +0.4% +0.5% , +0.1%, +0.1%, +0.7%, -0.6%, +0.3%, +0.1%, +0.3% (in January 2023).
- Previous values of the indicator “Capital goods orders ex defense”: +2.2%, +0.1%, +0.3%, +1.0%, -0.6%, +0.5%, + 1.1%, -0.4%, -0.4%, +0.4%, +0.7%, -0.6%, -0.2%, +0.9% (in January 2023).
Thursday, April 25
12:30 USD US annual GDP for 1st quarter (first estimate)
GDP data is one of the key indicators (along with labor market and inflation data) for the Fed in terms of its monetary policy. A strong result strengthens the US dollar; A weak GDP report has a negative impact on the US dollar. In the previous 4th quarter of 2023, GDP grew by +3.4%, after growth of +4.9%, +2.1% in the 2nd quarter, +2.0%, +2.6%, + 3.2% in Q3 2022, down -0.6% in Q2, -1.6% in Q1, up +6.9% in Q4 2021 , +2.3% in the 3rd quarter; in the 2nd quarter, GDP grew by +6.7%, in the 1st quarter of 2021 – by +6.3%.
If data points to a contraction in GDP in the first quarter of 2024, the dollar will come under severe pressure. Positive GDP data will support the dollar and US stock indices.
23:30 JPY Consumer Price Index (CPI) in the Tokyo region. Core Consumer Price Index (ex food and energy prices) in the Tokyo region
Tokyo Consumer Price Indices are published by the Japan Bureau of Statistics and measure changes in the prices of a selected basket of goods and services over a given period. They are a key indicator for assessing inflation and changes in consumer preferences.
Previous values (annualized):
- Tokyo CPI: +2.6%, +2.6%, +1.6%, +2.4%, +2.6%, +3.3%, +2.8%, +2.9%, +3.2%, +3.2%, +3.2%, +3.5%, +3.3%, + 3.4%, +4.4% (in January 2023),
- Tokyo CPI (ex food and energy): +2.9%, +3.1%, +3.1%, +3.5%, +3.6%, +3.8%, +4 ,0%, +4.0%, +4.0%, +3.8%, +3.9%, +3.8%, +3.4%, +3.1%, +3.0 % (in January 2023).
An indicator value below the forecast and/or previous values may trigger a weakening of the yen.
Friday, April 26
After 01:00 (exact time unknown): JPY Bank of Japan interest rate decision. Bank of Japan press conference and monetary policy statement
The Bank of Japan will decide on the interest rate. Currently the prime rate in Japan is 0%. Most likely, it will remain at the same level. If the rate is cut and returns to negative territory, such a decision will cause a sharp decline in the yen on the foreign exchange market and growth on the Japanese stock market. In any case, during this period of time, a jump in volatility in yen quotes and in the Asian financial market is expected.
Since February 2016, the Bank of Japan has kept its deposit rate at -0.1% and its 10-year bond yield target at around 0%.
However, at a meeting on March 19, BOJ board members decided to raise interest rates by 10 basis points, from -0.1% to 0%, for the first time since 2007, ending a period of negative interest rates that began in 2016. At the same time, the target for long-term JGBs (YCC) was removed, although the Bank of Japan still intends to buy the same number of JGBs per month as before, just without a clear target. On the other hand, the bank will stop buying ETFs and REITs, and purchases of commercial paper and corporate bonds will be gradually reduced and will cease completely after 12 months.
The yen reacted negatively to this decision. Economists say a symbolic end to negative interest rates is unlikely to give it much of a boost to growth. Only if the Bank of Japan hints at further rate hikes, which would indicate a real rate hike cycle, will the yen receive significant support, in their opinion.
During the press conference, head of the Bank of Japan Kazuo Ueda will comment on the bank’s monetary policy. The Bank of Japan continues to maintain an ultra-loose monetary policy. As the former head of the Japanese Central Bank Haruhiko Kuroda has repeatedly stated, “it is appropriate for Japan to patiently continue the current loose monetary policy.” Markets usually react noticeably to the speeches of the head of the Bank of Japan. Surely, he will again touch on the topic of monetary policy during his speech, which will cause increased volatility not only in the yen trading, but throughout the Asian and global financial markets.
After 05:00 (exact time unknown): JPY Bank of Japan press conference
During the press conference, head of the Bank of Japan Kazuo Ueda, who replaced Haruhiko Kuroda in this post in April 2023, will comment on the bank’s monetary policy. Despite the bank’s earlier measures to stimulate the Japanese economy, inflation remains low, production and consumption are falling, which has a negative impact on export-oriented Japanese manufacturers. Markets usually react noticeably to the speeches of the head of the Japanese Central Bank. If he brings up monetary policy during his speech, volatility will increase not only in yen trading, but throughout Asian and global financial markets.
08:00 CHF Speech by head of the SNB Thomas Jordan
During the speech of head of the SNB Thomas Jordan, volatility in franc quotes increases, and traders are waiting for signals regarding the SNB’s further monetary policy plans. The Central Bank of Switzerland has previously consistently advocated a soft monetary policy in the country, and considered the exchange rate of the national currency to be “overvalued.” Now the situation is somewhat different, especially given the slowing inflation in the country.
Tough rhetoric of Jordan’s speech will help strengthen the franc. A soft tone of the speech and the SNB’s tendency to pursue a soft monetary policy will have a negative impact on the franc.
12:30 USD Personal Consumption Expenditures (PCE Core Price Index)
Personal consumption expenditure data measures the average amount of money consumers spend per month on durable goods, consumer goods and services. Core PCE price index does not include food and energy prices. Annual Core PCE is the Fed’s main measure of inflation.
In turn, the inflation rate (in addition to data from the labor market and GDP) is important for the Fed when determining the parameters of its monetary policy. Rising prices put pressure on the central bank to tighten its policy and raise interest rates.
PCE data above the forecast and/or previous values could push the US dollar higher, while a decrease in the indicator would most likely have a negative impact on the dollar.
Previous values (annualized): +2.8%, +2.8%, +2.9%, +3.2%, +3.5%, +3.7%, +3.8%, +4.3%, +4.3% +4.7%, +4.8%, +4.8%, +4.7%, +4.7%, +4.6%, +4, 8%, +5.1%, +5.2%, +4.9%, +4.7%, +4.8%, +4.7%, +4.9%, +5.2% , +5.3%, +5.2% (in January 2022).
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: 79.4 in March, 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 USDJPY in real time mode
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