TOP 5 FOREX TRADING EVENTS NEXT WEEK – SUMMARY POINTS
- The Forex Economic Calendar is chalk full of high-impact event risk next week and puts USD, EUR, AUD, NZD and CNH currency pairs in the spotlight
- Forex traders will likely watch upcoming China GDP, Eurozone ZEW, US consumer sentiment, New Zealand CPI and Australian employment data closely
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CHINA GDP (Q2) | MONDAY JULY 15 | 2:00 GMT
China Q2 GDP will kick off next week’s economic data dump and looks to set the tone for risk appetite. Traders will get a glance at the impact that an ongoing trade war with the United States has had on the Chinese economy after a flareup in tension between the world’s two largest economies in early May.
While escalating US-China trade conflict has reportedly simmered since the most recent G20 Summit Trump-Xi meeting, the adverse effects from trade policy uncertaintyhas already shown signs of taking its toll judging by leading indicators like the Caixin Manufacturing and Services PMIs. According to Bloomberg’s median consensus, markets are expecting the year-over-year headline China GDP figure to cross the wires at 6.2%, down from a reading of 6.4% in the first quarter.
NEW ZEALAND CPI (Q2) | MONDAY JULY 15 | 22:45 GMT
New Zealand Q2 CPI data, which came in at a cool 1.5% annualized rate last quarter, has potential to sway the RBNZ’s looming decision on cutting interest rates for the second time this year at its next monetary policy meeting. The market estimate for Q2 inflation is for the metric ticking up a bit higher to 1.7%.
If realized or topped, the rebound in inflation may alleviate some pressure on the RBNZ to lower its overnight cash rate. This could reduce rate cut bets from the current level of 86.3%, whereas a miss on the CPI number might make another RBNZ rate cut even more probable.
EUROZONE ZEW SENTIMENT (JUL) | TUESDAY JULY 16 | 9:00 GMT
On Tuesday, the latest ZEW survey of expectations and economic sentiment out of the Eurozone could provide a jolt to EUR crosses. If Euro area sentiment continues to point to persistently bleak or further deterioration in outlook among survey respondents, it could provide the ECB with extra ammunition to justify additional monetary stimulus. The May ZEW drastically disappointed with a reading of -20.2 compared to the previously reported -1.6.
AUSTRALIA UNEMPLOYMENT RATE & EMPLOYMENT CHANGE (JUN) | THURSDAY JULY 18 | 1:30 GMT
Jumping to Thursday, the Australian Dollar and RBA will be put in the hot seat as traders await and digest updated Aussie jobs data. Bloomberg forecast respondents are predicting the unemployment rate to hold steady at 5.2% while adding a net 9.0k jobs.
Overnight swaps are pricing an 83.7% probability that the RBA stands pat seeing that the central bank shifted to a neutral stance after cutting rates at its last two policy meetings. If lower interest rates fail to “assist with faster progress in reducing unemployment,” the RBA and Governor Lowe may have to juice the economy a bit more with another reduction in its overnight cash rate which threatens the Aussie.
US CONSUMER SENTIMENT(JUL) | FRIDAY JULY 19 | 14:00 GMT
As for Friday, the UofMich consumer sentiment survey could also provide insight into America’s perception on trade wars and how it might impact business decisions, consumption and the US economy as a whole. Interestingly, the last reported survey of consumers detailed that 45% of respondents in the top third income distribution mentioned the negative impact of tariffs which was up from 30% in the prior period.
The Fed could be nudged closer toward an aggressive 50bps rate cut later this month if the consumer sentiment report comes in below the Bloomberg consensus estimate of 98.6. Rate traders are currently pricing in an 18.5% probability that the FOMC cuts rates by half a percent. Moreover, it may not bode well for consumer spending prospects if sentiment and expectations continue to drift lower.
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