Economic calendar for the week 05.10.2020 – 11.10.2020

Economic calendar for the week 05.10.2020 – 11.10.20202020-10-04 2020-10-04 Jana Kanelogo2020-10-04 2020-10-04 Economic calendar for the week 05.10.2020 – 11.10.2020Jana Kanelogo

Review of the main events of the Forex economic calendar for the next trading week (05.10.2020 – 11.10.2020)

Trading on key Forex news: next week we expect the publication of important macro statistics from the Eurozone, the US, Australia, Canada, as well as the results of the RBA meeting.

Financial market participants were rather restrained in their reaction to the publication of data from the American labor market last Friday. The Labor Department reported growth in non-farm payrolls by 661,000 in the US in September, with an unemployment rate of 7.9%. The economy has recovered just over half of the jobs lost since the start of the coronavirus pandemic. At the same time, the American consumer sentiment continued to rise. The University of Michigan reported last Friday that consumer sentiment rose to 80.4 in September against the forecast of 79.0, preliminary estimate of 78.9 and the August value of 74.1.

Meanwhile, pressure on stock indices intensified after news that US President Donald Trump had contracted coronavirus. Observers say the news is adding uncertainty to Trump's campaign and the outcome of the election. Economists believe that under Biden, stronger fiscal stimulus measures can be expected, which will be highly relevant to economic recovery in the near term, while under Trump, the prospect of a long period of extremely low interest rates is more likely. This will support business activity over a longer period of time, and this is extremely important for buyers of high-yield and risky stock assets, betting on the further growth of the American stock market.

One way or another, the dollar closed last week in negative territory, while US stock indices rose, which nevertheless speaks of maintaining positive investor sentiment.

The focus of investors next week will be on the publication of important macro data on the Eurozone, the US, Australia, Canada, as well as the RBA meeting. October 1 to October 7, China celebrates the national holiday – the National Day of the People's Republic of China; banks and stock exchanges of the country will be closed.

Traders should pay attention to the publication of the following macro indicators:

*during the coming week, new events may be added to the calendar and / or some scheduled events may be canceled

**GMT time

Monday, October 5

09:00 EUR Retail sales in the Eurozone

Retail sales is the main consumer spending indicator that shows the change in retail sales. A high result strengthens the euro, and vice versa, a low result weakens it. August forecast: +0.9% and +0.6% (YoY) against +1.3% (+0.4% yoy) in July. It is difficult to predict the euro's reaction to the publication of these values, since data suggests that while retail sales rose in August, it has yet to reach pre-coronavirus levels after falling sharply in March-April, when Europe was under tight quarantine measures.

14:00 USD ISM Services PMI

This indicator assesses the state of the services sector in the US economy. These services sectors (in contrast to the manufacturing sector) have practically no impact on the country's GDP.

In August, this indicator came out with a value of 56.9. A result above 50 is seen as positive for the USD. However, a relative decline in the index could negatively affect the dollar in the short term. Outlook for September: 56.0, which is likely to have a positive overall effect on the USD.

Tuesday, October 6

00:30 AUD Balance of trade

This indicator measures the relationship between Australia's export and import volumes. Growth in exports from Australia leads to an increase in the trade surplus, which has a positive impact on the AUD. Previous value (August): AU$ 4.294 billion. A decrease in the trade surplus may negatively affect the Australian dollar.

03:30 AUD Interest rate decision. The RBA's accompanying statement

In March, the RBA made 2 rate cuts, bringing it to the current level of 0.25%, and launched a quantitative easing program. At the same time, for 3-year government bonds of Australia, the target level of yield is set at 0.25%. The RBA has launched a program to lend to the banking system in the amount of at least A$90 billion and intends to buy bonds for A$5 billion.

The negative forecasts of economists suggest that the Australian economy will contract by 6% in 2020, which will be the sharpest annual GDP contraction since the Great Depression of the 1920s. The unemployment rate is likely to rise to around 8.5%.

Some economists have talked about Australia entering its first recession in nearly 30 years, which could turn into a depression.

“We live in extraordinary and difficult times,” said central bank governor Philip Lowe. In his opinion, "further stimulation is needed." He stated this during a press conference on March 19, when the RBA lowered the interest rate during its unscheduled meeting.

Philip Lowe has repeatedly stated that the central bank is ready to cut the rate again if necessary, although the likelihood of introducing negative rates, in his opinion, is "extremely small."

The main negative factors for the Australian economy are weak wages growth, a weak labor market and a slowdown in growth. Annual inflation has remained below the 2-3% target set by the RBA for almost four years.

Unemployment in the country remains above the 5% level for many years, unwilling to decline. Now the coronavirus pandemic has been added to the aforementioned negative factors, which has hurt the tourism and transport sectors. The RBA also expresses concerns that unemployment may rise to 8%, or even 10%.

In this regard, one cannot eliminate the possibility that on Tuesday, October 6, the RBA may again cut the rate, although most economists believe that the bank will leave the key rate unchanged at this meeting, at 0.25%, while expressing concerns about the outlook for the global economy due to the ongoing coronavirus epidemic.

In an accompanying statement, the RBA executives will explain the reasons for the rate decision. If the RBA signals the possibility of further easing of monetary policy in the near future, the risks of a fall in the Australian dollar will increase.

(Time of publication unknown) AUD Publication of budget plan

During the Asian trading session, the Australian government will publish an annual budget plan, which is likely to cause more volatility in the Australian dollar. However, it should be borne in mind that the exact time of publication is unknown.

14:40 USD Speech by the Fed Chairman Jerome Powell

Powell's comments could affect both short-term and long-term USD trading if he again touches on the Fed's monetary policy. A more hawkish stance on the Fed's monetary policy is seen as positive and strengthens the US dollar, while a more cautious position is seen as negative for the USD.

If he makes unexpected statements, the volatility in trading in the financial markets may increase.

"I think the 'new norm' now is lower interest rates, lower inflation, and possibly weaker economic growth," Powell said earlier, adding that "very, very low and even negative rates that observed in the countries of the world, unacceptable for our economy. " Despite calls by US President Donald Trump for zero or even negative interest rates, the Fed leaders are trying to resist pressure from the president. Financial market participants will carefully study his speech in order to catch signals regarding the further actions of the Fed.

Wednesday, October 7

12:10 EUR Speech by President of the ECB Christine Lagarde

The market usually reacts strongly to the speeches of the head of the ECB, which follow immediately after the ECB's monetary policy meeting. At least this was the case under Mario Draghi. Other speeches by Mario Draghi elicited less market reaction.

During her first press conference as President of the ECB, Christine Lagarde noted that there are initial signs of stabilization of the European economy and acceleration of core inflation.

Earlier in September, Lagarde announced concerns about the side effects of providing cheap financing and signaled that the ECB would undertake a lengthy overhaul of its strategy and toolbox. The revision is expected to take several months. It could lead to a change in the inflation target, which is now just below 2%, or impose restrictions on the use of negative rates or large-scale purchases of bonds.

"(ECB's) goal to complete it by the end of 2020". If Christine Lagarde makes unexpected statements regarding the recent ECB meeting and the bank's monetary policy, it will again trigger a surge in volatility in the euro and European stock indices.

18:00 USD Minutes of the 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.

Recently, more and more statements from the Fed leaders have been indicating the Fed's inclination to continue its policy of supporting the American economy, which has been badly hit by the coronavirus.

Following its regular meeting in September, the Fed left interest rates unchanged and reaffirmed its intention to support the American economy amid the coronavirus pandemic. The US Federal Reserve Chairman Jerome Powell also reiterated that the central bank will use all of its tools for "as long as necessary" to ensure the strongest possible economic recovery and limit long-term economic damage. The Fed chairman noted the extremely uncertain economic outlook for the United States, expressing concern that the increase in the number of cases of coronavirus is negatively affecting business activity in the country.

The soft tone of the minutes will have a positive effect on stock indices and negatively on the US dollar. The tough rhetoric of the Fed leaders regarding the prospects for monetary policy will push the dollar to further growth.

Thursday, October 8

09:30 CHF Speech by chairman of the SNB Thomas Jordan

Volatility of CHF trading increases during speeches by the SNB Chairman Thomas Jordan, and traders are waiting for signals regarding further plans of the SNB's monetary policy. The central bank of Switzerland has consistently advocated a soft monetary policy in the country, and traditionally considers the rate of the national currency "overvalued". Jordan's tough rhetoric will strengthen the franc. The soft tone of the speech and the intention to continue the extra soft monetary policy of the SNB will negatively affect the franc.

12:30 CAD Speech by the Governor of the Bank of Canada Tiff Macklem

Tiff Macklem succeeded Stephen Poloz as Governor of the Bank of Canada on June 3, 2020. Macklem faces essentially the same tasks as his predecessor on this post.

The Canadian economy, as well as the entire global economy, is showing signs of a slowdown, which is due to the downturn in business activity due to the coronavirus pandemic. Earlier this year, Stephen Poloz said that the Canadian economy is robust enough to keep rates unchanged despite the worsening global economy. However, the situation is changing rapidly and not for the better. It will be interesting now to learn McLeam's opinion on the sustainability of the Canadian economy and the monetary policy of the central bank.

If Tiff Macklem touches on the topic of the monetary policy of the Bank of Canada, the volatility in the quotes of the Canadian dollar will rise sharply. His tough tone will help strengthen the Canadian dollar. The soft rhetoric of Macklem's speech and the intention to pursue soft monetary policy will negatively affect the CAD quotes.

Probably, it can also provide some guidelines for investors ahead of the next meeting of the Bank of Canada, which will be held at the end of this month (October 28).

Friday, October 9

12:30 CAD Unemployment rate in Canada

Statistics Canada is to publish data on the country's labor market for September.

Unemployment has risen in Canada in recent months amid massive business closings due to coronavirus and layoffs. Unemployment rose from the usual 5.6% – 5.7% to 7.8% in March and to 13.7% in May. If unemployment continues to rise, the Canadian dollar will decline. If the data is better than the previous value, the Canadian dollar will strengthen. A decrease in the unemployment rate is a positive factor for the CAD, an increase in unemployment is a negative factor. Unemployment is expected to be at 10.1% in September (after 10.2%, 10.9%, 12.3%, 13.7%, 13.0% in previous months).

Price chart of EURUSD in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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