25-29 July 2016 news of the week

Weekly Market Summary

 

Global central banks and investors are still cautious as the financial markets are still trying to shake off the fear on a global economic slowdown caused by Brexit. The analysts expect that in few months, the European and the Asian central banks might expand their monetary stimulus packages to rebound from the economic hitches that followed Britain’s decision to leave EU.

 

While the major currencies were losing strength over speculations on further monetary easing, the US Dollar gained at the end of the week amid speculations that US Federal Reserve Bank may be planning to raise the interest rates once more before the year is over. The speculation was sparked by the recent streak of better-than-expected reports from the US.

 

US Federal Reserve Bank is expected to have a Federal Funds Rate meeting this Wednesday at 7pm (GMT). There is a general consensus among the market analysts that Fed will not increase the interest rates this month, and wait for Brexit wind to fade off instead. However, traders will keep an eye on Federal Open Market Committee Statement (FOMC) for signals and ideas on Fed’s attitude towards anothber rate hike, and when it might possibly happen.

 

Important Events of the Week

 

Tuesday

  • CB Consumer Confidence // USA // 3pm (GMT)

United States of America is to publish CB Consumer Confidence report which is the leading consumer spending indicator. The analysts forecast the confidence index to drop from 98.0 to 95.6 which can cause USD to fall.

 

Wednesday

  • CPI (q) // Australia // 2.30am (GMT)

Australia will release their quarterly Consumer Price Index which shows the change in the price of goods and services purchased by consumers. The analysts forecast this important inflation data to show improvement with 0.4% increase after last month’s 0.2% drop, which might lift AUD.

 

  • Prelim GDP (q) // UK // 9.30am (GMT)

United Kingdom is going to publish their preliminary Gross Domestic Product report for second quarter in 2016. GDP is one of the most important data as it is the widest measure of economic health and activity in the country. The analysts forecast an improvement from 0.4% to 0.5%, which can help GBP to climb back from its recent fall.

 

  • Fed Interest Rate Decision & Statement // USA // 7pm (GMT)

US Federal Reserve Bank is expected to hold a meeting tto decide whether they will make any changes in the interest rates. While the analysts do not forecast any hikes, the central bank will issue a statement which traders will focus on to find clues regarding any future hike decisions. High volatility is expected.

 

Thursday

  • Unemployment Claims // USA // 1.30pm (GMT)

United States of America will release their weekly Unemployment Claims data on Thursday afternoon. Indicating the number of people who applied government for jobless benefits, Unemployment Claims report is one of the most traded event in markets. The analysts are expecting an increase after last week’s surprise drop. An increase in the unemployment may cause USD to weaken against its major counterparts.

 

Friday

  • BoJ Outlook Report // Japan //6am (GMT)

Bank of Japan is expected to publish their economic outlook which will be followed with a press conference. BoJ Outlook Report shows the central bank’s approach to the current global developments and economic conditions, helping investors to get ideas regarding further monetary policy actions of BoJ. High volatility is expected on JPY.

 

  • GDP (m) // Canada // 1.30pm (GMT)

Canada will publish their monthly Gross Domestic Product report which will show the change in the economic activity in the country. The analysts are forecasting a drop back to negative area from last month’s 0.1% to -0.5%, which can cause CAD to lose strength across the markets.

 

  • Advance GDP (q) // USA // 1.30pm (GMT)

USA is going to release their Advance Gross Domestic Product report which shows the annualized change in the inflation-adjusted values of all goods and services produced by the country. The analysts are forecasting the improvement trend to continue with 2.6% increase from last quarter’s 1.1% improvement, which can help USD to finish the week in the positive area.

 

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