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After the Fed meeting on June 12, the dollar has remained stable, and the attention of market participants is on the actions of other major world central banks. While the expectations regarding the start of the Fed’s monetary policy easing cycle shifted towards the end of the year, the Central Banks of Canada and the Eurozone have already moved to soften their policies. In the conditions of increasing divergence of the curves reflecting the dynamics of interest rates of the Federal Reserve and other major world central banks, the dollar will get an advantage.
As for the events of the upcoming week 24.06.2024 – 30.06.2024, the last week of June, in the 2nd quarter and in the 1st half of the year the attention of investors will be on the important macro data from Canada, Australia, the US, Japan, Germany, and the UK.
Note: During the coming week, new events may be added to the calendar and / or some scheduled events may be cancelled. GMT time
Monday, June 24
No important macro statistics is expected.
However, traders should attention to the speech by the head of the Bank of Canada Tiff Macklem (at 17:00 GMT). The Canadian economy, like the entire global economy, has been slowing since 2020 (first due to the coronavirus pandemic). Previously, Macklem said that the country’s economy is quite stable. However, the situation rapidly changed, and not for the better. It will now be interesting to hear Macklem’s opinion regarding the stability of the Canadian economy and the monetary policy of the central bank in the context of declining inflation: in April, the annual Canadian CPI was at +2.7% after +2.9%, +2.8%, +2.9 %, +3.4%, +3.1% in previous months, with the Bank of Canada’s inflation target in the range of 1% – 3%.
By the way, the next inflation data in Canada will be presented on Tuesday at 12:30 (GMT).
If Tiff Macklem touches on the topic of the Bank of Canada’s monetary policy, then the volatility in the Canadian dollar quotes will increase sharply. A tough tone of his speech will help strengthen the Canadian dollar. A soft rhetoric of Macklem’s speech and the tendency to pursue a soft monetary policy will negatively affect the CAD quotes.
He will also likely explain the recent Bank of Canada interest rate decision and could provide some guidance for investors ahead of the next central bank meeting, likely next month.
Tuesday, June 25
12:30 CAD Consumer price indices in Canada
Consumer Price Index (CPI) reflects the dynamics of retail prices of the corresponding basket of goods and services, and the core indicator (Core CPI) does not take into account fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transport, and tobacco products. The inflation target for the Bank of Canada is in the range of 1% – 3%. An increase in the CPI indicator is a harbinger of a rate increase and a positive factor for the CAD.
Previous values:
- Consumer Price Index: +0.5% (+2.7% in annual terms), +0.6% (+2.9% in annual terms), +0.3% (+2.8% in annual terms) ), 0% (+2.9% in annual terms), -0.3% (+3.4% in annual terms), +0.1% (+3.1% in annual terms), +0, 1% (+3.1% in annual terms), -0.1% (+3.8% in annual terms), +0.4% (+4.0% in annual terms), +0.6% (+3.3% in annual terms), +0.1% (+2.8% in annual terms),
- Core Consumer Price Index (from the Bank of Canada): +0.2% (+1.6% in annual terms), +0.5% (+2.0% in annual terms), +0.1% (+2 .1% in annual terms), +0.1% (+2.4% in annual terms), -0.5% (+2.6% in annual terms), +0.1% (+2.8 % in annual terms), +0.3% (+2.7% in annual terms), -0.1% (+2.8% in annual terms), +0.1% (+3.3% in annual terms), +0.5% (+3.2% in annual terms), -0.1% (+3.2% in annual terms).
Data indicate a continued slowdown in inflation, which puts pressure on the Canadian Central Bank to decide on a looser monetary policy. If the expected data turns out to be worse than previous values, this will negatively affect the CAD. Data stronger than previous values will strengthen the Canadian dollar.
14:00 USD Consumer confidence level
The Conference Board survey report of nearly 3,000 US households asks respondents to assess current and future economic conditions, as well as the overall economic situation in the United States. American consumers’ confidence in the country’s economic development and the stability of their economic situation is a key indicator of consumer spending, which plays an important role in overall economic activity. A high level of consumer confidence indicates economic growth, while a low level indicates stagnation.
Previous indicator values: 102.0, 97.0, 104.7, 106.7, 114.8, 110.7, 102.0, 102.6, 103.0, 106.1, 117.0, 109, 7, 102.3, 101.3, 104.2.
An increase in the indicator will support the dollar, while a decrease in the value will weaken it.
Wednesday, June 26
01:30 AUD Consumer price index
Consumer Price Inflation 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: +3.6%, +3.5%, +3.4%, +3.4% (in January 2024).
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 still 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.
20:30 USD Bank stress test results
Bank stress tests prepared by the Board of Governors of the Federal Reserve reflect the reaction of the largest US banks to various artificially created financial and market situations.
The results of these stress tests help determine the strength of banks and the ability to repay government borrowings, influencing the monetary policy of the central bank.
Thursday, June 27
01:30 AUD Retail sales index
The Retail Sales Index is published monthly by the Australian Bureau of Statistics and measures overall retail sales. The index is often considered an indicator of consumer confidence and consumer spending, also reflecting the health of the retail sector in the near term. Domestic consumption, in turn, is one of the main components of GDP growth in countries with developed economies.
Therefore, a deterioration in this indicator may also indicate problems with the country’s GDP growth in the future. And this, in turn, is a negative factor for the national currency, since a slowdown in the economy may force the national central bank to soften monetary conditions for business, in particular, cut interest rates.
The index growth is usually a positive factor for the AUD.
Previous index value (for April) +0.1% (after -0.4%, +0.3% +1.1%, -2.7%, +2.0%, -0.4%, + 0.9%, +0.3%, +0.5%, -0.8%, +0.8%, 0%, +0.4%, +0.2%, +1.9%, -3.9%, +1.7%, +0.4%, +0.6%, +0.6%, +1.3%, +0.2% in previous months). If the data turns out to be weaker than the previous value, then the AUD may sharply decline in the short term; if it’s above the previous values, the AUD is likely to strengthen.
12:30 USD US annual GDP for the 1st quarter (final estimate). Durable goods orders. Capital goods orders (ex defense). Jobless claims
GDP data is one of the key indicators (along with labor market and inflation data) for the Fed in terms of its monetary policy. The 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.
The first estimate was +1.6%, and the second was +1.3%.
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 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 American 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 data better than the forecast will have a positive impact on it.
- Previous values of the indicator “durable goods orders” : +0.6%, +0.8%, +0.7%, -6.9%, -0.3% (in December 2023),
- Previous values of the indicator “capital goods orders ex defense”: +0.2%, -0.1%, +0.4%, -0.4%, -0.6% (in December 2023).
Also at the same time, the US Department of Labor will publish a weekly report on the state of the American labor market with data on the number of primary and secondary applications for unemployment benefits. The state of the labor market (along with GDP and inflation data) is a key indicator for the Fed in determining the parameters of its monetary policy.
The result is higher than expected and the increase in the indicator indicates a weak labor market, which negatively affects the US dollar. A drop in the indicator and its low value is a sign of recovery in the labor market and may have a short-term positive impact on the USD.
The number of initial and repeated claims for unemployment benefits is expected to remain at lows corresponding to the lows of the period before the coronavirus pandemic, and this is also a positive factor for the dollar indicating the stability of the American labor market.
- Previous (weekly) values based on data on initial applications for unemployment benefits: 242 thousand, 229 thousand, 221 thousand, 216 thousand, 223 thousand.
- Previous (weekly) values based on data on repeated applications for unemployment benefits: 1820 thousand, 1790 thousand, 1790 thousand, 1787 thousand, 1786 thousand, 1781 thousand, 1768 thousand.
23:30 JPY Consumer Price Index (CPI) in the Tokyo region. Core Consumer Price Index (Core CPI) in the Tokyo region (ex food and energy prices)
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: +2.2%, +1.8%, +2.6%, +2.5%, +1.8%, +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 (excluding food and energy): +2.2%, +1.8%, +2.9%, +3.1%, +3.3%, +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, June 28
06:00 EURRetail sales
Retail sales are the main indicator of consumer spending in Germany showing changes in the volume of sales in the retail sector. A high result strengthens the euro, and vice versa, a low result weakens it.
Previous values: -1.2% (-0.6% in annual terms), +1.8% (+0.3% in annual terms), -1.9% (-2.7% in annual terms) , -0.4% (-1.4% in annual terms) in January 2024, -1.6% (-1.7% in annual terms), -2.5% (-2.4% in annual terms), +1.1% (-0.1% in annual terms), -0.8% (-4.3% in annual terms), -1.2% (-2.3% in annual terms) , -0.8% (-2.2% in annual terms), -0.8% (-1.6% in annual terms), +0.4% (-2.1% in annual terms), + 0.8% (-4.3% in annual terms), -2.4% (-8.6% in annual terms), -1.3% (-7.1% in annual terms), -0, 3% (-3.8% in annual terms) in January 2023.
The data shows an uneven recovery and, in some months, a slowdown in this sector of the German economy. Data better than the forecast and/or the previous value will likely have a positive impact on the euro, but in the short term.
06:00 GBP UK GDP Q1 (final estimate)
GDP is considered an indicator of the overall health of the British economy. The rising trend of the GDP indicator is considered positive for the GBP. The UK’s GDP was one of the highest in the world until 2016, when the Brexit referendum took place. Subsequently, its growth slowed down, and with the onset of the global coronavirus pandemic, the British GDP growth rate completely moved into negative territory.
Previous GDP values: -0.3% in the 4th quarter, -0.1% in the 3rd quarter, 0% in the 2nd quarter, +0.2% in the 1st quarter of 2023, +0, 1% in 4Q 2022, -0.1% in 3Q, +0.1% in 2Q, +0.5% in 1Q 2022, +1.5% (in the 4th quarter of 2022).
The main factors that could force the Bank of England to keep rates low are weak GDP and labor market growth, as well as low consumer spending. If GDP data turns out to be worse than significantly previous values, this will put downward pressure on the pound. A strong GDP report will strengthen the pound.
The first estimate was: +0.6%.
12:30 USD Personal Consumption Expenditure (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 (in annual terms): +2.8%, +2.8%, +2.8%, +2.9% (in January 2024), +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 (Final Edition)
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: 69.1 in May, 77.2 in April, 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.
The preliminary score was: 65.6.
Price chart of EURUSD in real time mode
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