Economic calendar for the week 20.05.2024 – 26.05.2024

The US stock market remains bullish and the dollar retains positive dynamics despite the fact that the market still expects 2 interest rate cuts this year. This coming week, minutes of the May meeting of the US Central Bank will be published, and market participants will probably be able to better understand the prospects for its monetary policy.

As some Fed officials previously stated, if consumer inflation in the United States stabilizes above the target of 2.0% or continues to grow significantly, the leaders of the Central Bank will be ready to tighten monetary policy again.

In addition, during the week 20.05.2024 – 26.05.2024, market participants will pay attention to the publication of important macro statistics from Canada, New Zealand, China, the US, the UK, the Eurozone, as well as the results of meetings of the Central Banks of China and New Zealand.

Note: During the coming week, new events may be added to the calendar and / or some scheduled events may be cancelled. GMT time

Monday, May 20

In some European countries banks will be closed to celebrate Catholic Holy Spirit Day. Trading volumes will be lower than usual. No important macro statistics is expected to be released.

01:15 CNY People’s Bank of China interest rate decision

Since May 2012, the People’s Bank of China has been steadily reducing interest rates to support Chinese manufacturers. The bank last lowered the rate in August 2023 (by 0.1% to 3.45% currently).

Starting around 2021, the world’s largest central banks began to tighten their monetary policies amid rising inflation. What will the Chinese Central Bank do this time after policy easing and pauses starting in September 2023?

It is likely that at this meeting, the People’s Bank of China will keep the interest rate at the same level of 3.45%, although other decisions are not off the table.

If the People’s Bank of China makes unexpected statements, volatility may increase throughout the financial market, especially in Asia. Investors will also be interested in the bank’s assessment of the prospects for the Chinese economy and its policies in the near future.

Tuesday, May 21

01:30 AUD Minutes of the last meeting of the RB of Australia

This document is published two weeks after the meeting and the decision on the interest rate. If the RBA is positive about the state of the country’s labor market and GDP growth rates, and is also hawkish about the inflation outlook for the economy, markets view this as a higher likelihood of a rate hike at the next meeting, which is a positive factor for the AUD. The bank’s soft rhetoric regarding inflation primarily puts pressure on the AUD.

During the recent (May 2024) meeting, the RBA took a pause again, keeping the interest rate at a 12-year high at 4.35%. However, the RBA signaled the possibility of a further increase if inflation begins to accelerate.

While annual inflation in Australia has slowed to 3.6% from 4.1% previously, it is not expected to fall below the Reserve Bank of Australia’s target range of 2% to 3% until 2025. This suggests the central bank will have to keep rates higher for longer than previously expected. However, the leaders of the Australian Central Bank expressed hope that the current restrictive policy will contribute to the return of inflation to target levels in the range of 2.0% – 3.0%.

“Whether further tightening of monetary policy will be required to ensure inflation returns to target within a reasonable time frame will depend on incoming data and evolving risk assessments,” they said.

If the published minutes contain unexpected information regarding the RBA’s monetary policy issues, the volatility in the AUD quotes will increase.

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: +0.6% (+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): +0.5% (+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).

If the expected data turns out to be worse than previous values, this will negatively affect the CAD. Data better than previous values will strengthen the Canadian dollar.

17:00 GBP Speech by head of the Bank of England Andrew Bailey

Financial market participants are waiting for Andrew Bailey to clarify the situation regarding the future policy of the UK central bank. During speeches by the head of the Bank of England, volatility usually rises sharply in the pound and the London FTSE index if he gives any hints about tightening or easing the monetary policy of the Bank of England. It is likely that Andrew Bailey will also provide explanations regarding the Bank of England’s decision on the interest rate and will touch upon the state and prospects of the British economy against the backdrop of high energy prices and inflation. If Bailey does not touch on monetary policy issues, the reaction to his speech will be weak.

Wednesday, May 22

02:00 NZD RB of New Zealand’s on the interest rate. Accompanying statement. RBNZ monetary policy statement

Following the meetings held in October and November 2021, the Reserve Bank of New Zealand (for the first time in 7 years) raised the key interest rate to 0.50% and then to 0.75%. The interest rate was raised again to 1.5% in February and April 2022 to ease inflation and contain rapidly rising house prices. Currently the RBNZ interest rate is 5.50%.

The RBNZ previously stated that the economy no longer needed the current level of monetary stimulus.

In April 2024, the RBNZ again left the official interest rate at 5.50% for the sixth time in a row. The RBNZ stated the need for monetary policy to remain restrictive to maintain downward pressure on inflation. Bank executives need to find a balance while annual inflation hovers around 5.0%, well above the target of 1.0% – 3.0%.

At this meeting, the RBNZ may either raise the interest rate again, and its leaders may also speak out in favor of further increasing the interest rate at subsequent meetings, or leave the rate at the current level. Market participants monitoring NZD quotes should be prepared for a sharp increase in volatility during this time period.

In the accompanying statement and comments, the RBNZ management will provide an explanation of the interest rate decision and comments on the economic conditions that contributed to this decision.

At this time, volatility in New Zealand dollar quotes may increase sharply.

Let us note that following the results of the July 2023 meeting, the leaders of the Central Bank of New Zealand kept the interest rate at 5.50%. This was the first pause since the RBNZ began tightening monetary policy in August 2021. In theaccompanying statement, the RBNZ noted that the current parameters of monetary policy are already restrictive.

03:00 NZD RBNZ press conference

Head of the RBNZ Adrian Orr will comment on the decision on rates. Typically, during this process the volatility in NZD quotes increases. Orr’s speeches often serve as an unofficial source of information about the future direction of the RBNZ’s monetary policy. In his opinion, the country’s monetary policy should correlate both with the dynamics of employment and financial stability of the state, and with inflation.

06:00 GBP Consumer Price Index. Core Consumer Price Index

Consumer Price Index (CPI) reflects the dynamics of retail prices for a group of goods and services included in the British consumer basket. The CPI index is a key indicator of inflation. Its publication causes active movement of the pound on the foreign exchange market, as well as the London Stock Exchange FTSE100 index.

In the previous reporting month (March), consumer inflation increased by +0.6% (+3.2% in annual terms) after +0.6% (+3.4% in annual terms), -0.6% (+ 4.0% in annual terms) in January 2024, +0.4% (+4.0% in annual terms) in December. The data suggests that inflationary pressures still remain in the UK, which is likely to support the pound, especially if the data turns out to be higher than expected.

An indicator value below the forecast/previous value could trigger a weakening of the pound, as low inflation will force the Bank of England to maintain a loose monetary policy.

Core Consumer Price Index (Core CPI) is published by the Office for National Statistics and measures changes in the prices of a selected basket of goods and services (excluding food and energy) over a given period. It is a key indicator for assessing inflation and changes in consumer preferences. A positive result strengthens the GBP, a negative result weakens it.

In March, the growth rate of Core CPI also slowed down, amounting to +4.2% (in annual terms) after +4.5%, +5.1% in January 2024, December and November, after growth of +5.7% + 6.1%, +6.2% 3 months earlier. It is likely that the publication of the indicator will have a short-term positive impact on the pound if its value is higher than the forecast and previous values. An indicator value below the forecast and/or previous values may trigger a weakening of the pound.

18:00 USD Minutes of the May meeting of the Federal Open Market Committee

The publication of the minutes is extremely important for determining the course of the current Fed policy and the prospects for raising interest rates in the United States. The volatility of trading in financial markets during the publication of the minutes usually increases, since the text of the minutes often contains either changes or clarifying details regarding the results of the last FOMC meeting of the Federal Reserve.

Following the meeting that ended on May 1, 2024, the leaders of the central bank decided to keep the federal funds rate unchanged in the range of 5.25% – 5.50%.

The accompanying statement said the Fed does not believe it would be appropriate to cut rates until there is greater confidence that inflation is moving sustainably toward its 2% target. “The decline in inflation numbers is welcome, but we need to see further evidence that we are returning to target,” and “if necessary, we (at the Fed) are prepared to maintain the current rate for longer,” the Fed Chairman Jerome Powell said at the press conference following the recent meeting.

Market expectations regarding the Fed’s June interest rate cut have diminished. They have now shifted mainly to the 2nd half of the year, although markets still expect 2 interest rate cuts this year.

A soft tone of the minutes will have a positive impact on stock indices and a negative impact on the US dollar. Tough rhetoric from Fed officials regarding the outlook for monetary policy could push the dollar higher.

Thursday, May 23

07:30 EUR Germany Manufacturing and Services PMI according to S&P Global. Composite PMI according to S&P Global (Preliminary Release)

The PMIs for the manufacturing and services sectors of the German economy are an important indicator 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 as 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: 42.5, 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: 53.2, 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: 50.6, 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 are important indicators 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 as 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: 45.7, 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: 53.3, 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: 51.7, 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 services 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 as negative for the GBP.

Previous values:

•      Manufacturing PMI: 45.7, 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: 53.3, 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: 54.1, 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 business activity indices in the most important sectors of the US economy prepared by S&P Global,are an important indicator 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 values:

•     Manufacturing PMI: 50.0, 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: 51.3, 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: 51.3, 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).

22:25 NZD Speech by head of the RBNZ Adrian Orr

Speeches by the head of the RBNZ often serve as an unofficial source of information about the future direction of the central bank’s monetary policy. It is likely that head of the RBNZ Adrian Orr will reaffirm the bank’s penchant for pursuing tight monetary policy to curb high inflation unwilling to fall towards the target range between 1.0% and 3.0%, which could support the New Zealand dollar. A soft rhetoric of his statements will cause continued pressure on the New Zealand currency.

23:30 JPY National Consumer Price Index

The largest portion of overall inflation comes from consumer prices. If prices rise, the Central Bank is forced to raise interest rates to curb inflation. In the opposite cases, when inflation decreases or there are signs of deflation (when the purchasing power of money increases and the prices of goods and services fall), the Central Bank usually seeks to devalue the national currency by lowering interest rates to stimulate aggregate demand.

The National Consumer Price Index (CPI) is a key indicator for assessing inflation and changing consumer preferences in Japan.

A high value of this indicator is favorable for the Japanese Yen (JPY), while a low value represents a negative (bearish) factor.

Previous values (annualized):

•      CPI: +2.7%, +2.2%, +2.6%, +2.8%, +3.3% +3.2%, +3.5%, +3.2%, + 3.3%, +4.3% (in January 2023),
•      Core CPI (excluding food and energy prices): +2.9%, +3.5%, +3.7%, +3.8%, +4.0%, +4.2%, +4.3% , +4.3%, +4.2%, +4.3%, +4.1%, +3.8%, +3.5%, +3.2% (in January 2023)

Fruday, May 24

06:00 GBP Retail sales

The economic indicator Retail Sales tracks the level of consumer demand and is the most important indicator influencing the market and quotes of the national currency. It is also an indirect indicator of inflation, thus being of interest both to the country’s central bank and to market participants.

The Retail Sales Report is produced by the UK Office for National Statistics. Changes in retail sales are generally considered an indicator of consumer spending. In general, a high indicator is a positive factor for the GBP, while a low value is a negative factor.

Previous index values: +0.8%, -0.4%, +0.7%, -2.4% (in January 2024), +1.3% (in December 2023), 0%, – 1.1%, +0.4%, -1.1%, +0.6%, +0.1%, +0.5%, -1.2%, +1.0%, +1, 3 (in January 2023) and +0.1%, -2.5%, -1.0%, -1.3%, -3.1%, -1.6%, -2.3%, -3.4%, -3.9%, -3.5%, -5.2 (in January 2023) in annual terms.

12:30 USD Durable goods orders. Capital goods orders (ex defense)

Durable goods are solid goods 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. This 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 better-than-forecasted data will have a positive impact on it.

•      Previous values of the “durable goods orders” indicator: +2.6%, +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 “capital goods orders ex defense” indicator: +2.3%, +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).

14:00 USD University of Michigan Consumer Confidence Index (final 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: 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 estimate for May was 67.4.

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