Here are this week’s key economic releases broken down by days of the week, and by the currency to be impacted.
CAD – Canadian Building Permits m/m for May is forecast to have grown 3.1%, after a gain of 1.1% in April. After January gain of 8.5%, building permits have been sliding. After a 1.1% rebound in April, a 3.1% growth in May should help support the CAD. Canadian Ivey PMI for June is forecast to rebound to 51.3, after a reading of 48.3 in May. A reading above 50 represents growth, while a reading below reflects contraction. We have seen the Ivey PMI slow drifting lower. A return to 51.3 is likely to have limited impact, but if the reading misses 50, it would be the 1st 2-straight-months of decline since 2009.
NZD – The NZIER Business Confidence data reflects the optimism or pessimism on the economy. This survey has shown improvement since 2012, and a reading above Q2’s 52 would continue this trend. A reading above 0 reflects optimism, and the 52 reading can be considered extremely strong. A reading in the 40s should still remind the market New Zealand’s economy is looking up and can continue to support the strong NZD. It will take a couple of bad quarters to start putting a dent into the 2-year rise.
AUD – NAB Business Confidence came in at 7 for May. The reading in 2014 has so far been oscillating around 6. A reading that breaks above 10 should support a stronger AUD. Below 4, however there would still be optimism, but it would be least optimistic reading in 2014, and can put AUD in consolidation mode.
GBP – UK Manufacturing Production m/m for May is forecast to have grown 0.5% after April registered at 0.4% reading. Continuing growth in manufacturing has been helping economic outlook, and moving closer the prospect of BoE raising rates in 2014.
China – CPI data for June is forecast to show an annual inflation rate of 2.4%, which would be a tick lower than the 2.5% reading for May.
FOMC Meeting Minutes will reveal whether or not Fed members are concerned about Q2 growth, and whether this/ or lack thereof, effects the prospect of a rate hike, which is currently projected to mid-2015.
AUD – Employment Change, Unemployment Rate: The Australian Dollar has a chance to continue its bullish stance with strong jobs data. We saw a dip in May, with a loss of about 4,800 jobs. Economists forecast an addition of 12,300 jobs in June. The unemployment rate is expected to edge higher to 5.9% from 5.8% shown in May.
EUR – ECB Monthly Bulletin will likely be the lone key release for the EUR. Key points to monitor will be the ECB’s assessment of inflation, which has been soft. Last week, we saw Eurozone’s annual inflation rate drop back to 0.5% in June, which is the rate Draghi had said would be this year’s bottom. If the monthly bulletin expresses outlook of inflation lower than that, traders might continue to keep expectations of further stimulus measures, which would continue to pressure the EUR.
GBP – The Bank of England will meet and deliver its Monetary Policy Announcement on Thursday. This is the main event risk for the pound this week. Traders are going to need further confirmation of a possible 2014 rate hike if the GBP is to continue its uptrend. Even if a rate hike is forecast to be after the turn of the year, the GBP could still be supported against the USD and EUR, but might enter into a period of consolidation before further gains.
USD – Jobless Claims is forecast to be around 316K for the week, which is about the same as the previous week’s 315K. The strong NFP for June gives traders hope that the FOMC will raise rates mid-2015. If we start to get consecutive weeks of under-300K reading, then we might see the USD start to strengthen. Otherwise, it should remain pressured against most majors, except against the EUR.
CAD – Employment Change, Unemployment Rate: Economists forecast an addition of 26.2K jobs in June., which is similar to the 25.8K in May. The unemployment rate is expected to be 7.0%, the same as in May.
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