August 10, 2018

IronFX, Weekly Market Report - European Inflation Data and GDP’s to get the market’s focus

In the coming week a number of financial data releases could get the attention of the markets.

This article is originally referred from IronFX News.

  • On Monday, no major releases are expected.
  • On Tuesday, German CPI (MoM). German ZEW Economic Sentiment, UK Unemployment Rate
  • On Wednesday, UK CPI (YoY), US Core Retail Sales (MoM).
  • On Thursday, Australia’s Unemployment Rate, UK’s Retail Sales (MoM).
  • On Friday, Canada’s Core CPI (MoM)

In the coming week a number of financial data releases could get the attention of the markets.

IronFX’s team handpicked the ones which it considers as the most influential and discusses their possible (current) forecasts and their respective effects on various currencies.

Monday, August 13th

On Monday, no major financial releases are expected.

Tuesday, August 14th

On Tuesday, in the Asian session, China is to release its Industrial Production which is expected to accelerate to +6.3% yoy from previous reading of +6.0% yoy.

At the same time we also get China’s Retail Sales growth rate forecasted to remain on hold at +9.0% yoy.

Should the pre mentioned news be released as expected we could see support for CNH, AUD and NZD.

China, during the previous week announced new tariffs on US products and tripled its product list count to 333 from previous count of 140 products in June.

Moving on to a very busy European morning, we get the German GDP for (Q2) expected to move higher to +2.6% yoy since previous +1.6% yoy.

At the same time we get the German CPI rate forecasted to remain on hold at +0.3%.

If the outcome of the news is as expected we could see the EUR strengthening.

Later on we get the UK’s Unemployment rate for June which is expected to remain on hold at +4.2%.

Should the outcome be released as forecasted the market could view a rather muted event .Although, any different outcome than the one expected could create volatility for GBP pairs.

Please note GBP is highly sensitive to any developments on Brexit and this issue has weakened the British Pound significantly during the past months.

If a no Brexit deal is confirmed within the next week we may see the pound dropping even further.

A little later from the Eurozone we get the German ZEW Economic sentiment expected to drop from previous read of -24.7 to -19.1.

This scenario could also prove to be good news for the EUR. This indicator measures optimism.

The bigger the number released the bigger the optimism for the economy.

Wednesday, August 15th

On Wednesday, during the Asian session we get Australia’s Wage Price Index figure for (Q2).

The figure is forecasted to advance to +0.6% qoq from previous +0.5% qoq.

Should the actual figure meet the forecast we could see the AUD and NZD strengthening.

The main reasons behind a possible strengthening of the Aussie and the Kiwi, would be Australia’s wage growth continues to be low and stable across most industries in Australia.

This was noted as a mater in RBA’s statement in August 2018 and so an advanced figure could be evidence the situation is improving.

In the European morning the UK Inflation data is to be released.

The CPI figure is forecasted to increase from previous +2.4% yoy to 2.5% yoy indicating the economy has grown since last year.

However, the monthly figure is forecasted to drop to -0.1% from previous +0.4% which blurs the picture somewhat.

The mixed financial data could create volatility on GBP and in our opinion the yearly figure could be more dominant for the outcome of the news.

In the US session we get the American Core Retail sales and the Retail sales both for July.

The Core Retail sales are expected to remain on hold at +0.4% mom but the Retail sales are expected to decelerate to +0.3% mom from previous reading of +0.5% mom.

If the outcome is released as forecasted we could see a weakening of the USD.

Moving on to the European session we get UK Retail Sales which are expected to accelerate to +0.2% mom from previous reading of -0.5%mom.

This scenario could help support the GBP.

Thursday, August 16th

On Thursday, early in the Asian session we get Australia’s Unemployment Rate.

The rate is widely expected to remain on hold at +5.4%. The news could be a no event scenario as the reading does not change much of the picture.

Later in the American session, we get the US Housing Starts for July.

The indicator is expected to increase to 1.250M from previous 1.173M displaying some upward undertaking of construction.

The expected outcome could help boost the greenback.

A note could be made here as in the latest sessions the greenback seemed to regaining some strength it lost at the beginning of the week.

Analyst stated the greenback is superior over emerging market currencies even as the trade wars carry on.

Friday, August 17th

On a quiet Friday, we get Canadas Core CPI rate for July.

The figure is expected to remain on hold at 0.1%.

If the forecast is to be realized the market may perceive it as a muted event.

Original Source: IronFX News

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