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Economic calendar for the week 25.04.2022 – 01.05.2022

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Review of themain events of the Forex economic calendar for the next trading week  (25.04.2022 – 01.05.2022)

Last Friday the DXY dollar index again rose above the psychologically significant level of 101.00, also ending the week with an increase for the 3rd week in a row. At the same time, the yield on 10-year and 2-year US Treasury bonds reached their high since December 2018. The dollar received an additional momentum from Fed Chairman Jerome Powell, who spoke last Thursday and confirmed the intention of the central bank to raise interest rates by 0.50% at the next meeting (May 3-4). He also made it clear that such increases may be required in the future. “I think it’s appropriate to move a little more quickly,” Powell said, also noting that “the market is overheated.”

Investors now expect the Fed to raise rates by 50 basis points over the next two meetings (in May and June), and the growing divergence of the Fed’s and other world’s largest central banks’ conditional monetary policy curves will further strengthen the dollar and lift the DXY index, economists say.

This week turned out to be extremely volatile, and investors preferred the dollar against other popular defensive assets – the yen, the franc, and gold.

Next week, market participants will pay attention to the publication of important macro statistics from the US, Australia, Germany, the Eurozone, as well as the speeches of the heads of central banks of Switzerland, Japan, Canada and the results of the meeting of the Bank of Japan.

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

**GMT time

Monday, April 25

No important macro statistics scheduled to be released. However, market participants who follow the CAD quotes should pay attention to the speech of the head of the Bank of Canada Tiff Macklem. It is scheduled for 15:00 (GMT). If Macklem touches upon the subject of the monetary policy of the Bank of Canada, the volatility in the quotes of the Canadian dollar will increase sharply. The tough tone of his speech will help strengthen the Canadian dollar. The soft rhetoric of Tiff Macklem’s speech and the tendency to pursue a loose monetary policy will negatively affect the CAD quotes.

Tuesday, April 26

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

This indicator reflects the value of orders received by producers of durable goods and capital goods (capital goods are durable commodities used to produce durable goods and services) involving large investments. Goods produced in the defense and aviation sectors of the US economy are not included in this indicator. A high result strengthens the USD. Durable Goods Orders indicator’s previous values: -2.1% in February, +1.6% in January, +1.2% in December, +2.6% in November, -0.4% in October , -0.3% in September 2021.

Capital Goods Orders ex defense and aviation indicator’s previous values: -0.2% in February, +0.9% in January, +0.4% in December, -0.1% in November, +0, 7% in October, +0.8% in September 2021.

In theory, the relative growth of the indicator has a positive impact on the dollar, and the decline of the indicator is negative. The market reaction to its negative value may also be negative for the dollar in the short term. Data worse than the previous value and/or the forecast will also have a negative impact on dollar quotes.

Forecast for March: +1.0% (durable goods orders), +0.5% (capital goods orders ex defense and aviation).

Better-than-expected data will have a positive impact on the dollar.

Wednesday, April 27

01:30 AUD RBA Core Inflation Index by Trimmed Mean Method (for the 1st quarter). Consumer Price Index (for the 1st quarter)

This indicator is published by the RBA and the Australian Bureau of Statistics. It reflects the dynamics of retail prices for goods and services included in the consumer basket. The simple trimmed mean method takes into account the weighted average kernel, the central 70% of the index components. Previous index values: +1.0% (+2.6% YoY) in Q4, +0.7% (+2.1% YoY) in Q3, +0.5 % (+1.6% YoY) in Q2, +0.3% (+1.1% YoY) in Q1 2021. According to the forecast, the value of the indicator for the 1st quarter of 2022 is expected to be +1.2% (+3.4% in annual terms). Despite the continued positive dynamics, this is still a weak value. If the value of the indicator turns out to be worse than the forecast, this is likely to have an even more negative impact on the AUD. The data speaks of low inflationary pressure in the country. The growth of the indicator above the forecast should have a positive impact on the AUD in the short term.

The Consumer Price Inflation Index (CPI) published by the RBA and the Australian Bureau of Statistics evaluates the dynamics of retail prices for goods and services in Australia. CPI is the most significant indicator of inflation and changes in consumer preferences. A high value is positive for the AUD, while a low value is negative. Previous values ​​of the indicator: +1.3% (+3.5% in annual terms) in the 4th quarter, +0.8% (+3.0% in annual terms) in the 3rd quarter, +0.8 % (+3.8% YoY) in Q2, +0.6% (+1.1% YoY) in Q1 2021. According to the forecast, the value of the indicator for the 1st quarter of 2022 is expected to be +1.7% (+4.6% in annual terms). The Australian central bank’s CPI inflation target is in the range of 2% – 3%. As follows from the minutes of one of the latest meetings of the RBA, “The Central Bank will not raise rates until it reaches the CPI inflation target of 2-3% on a sustainable basis. It won’t happen before 2024.”

Thus, the expected positive value of the indicator is likely to support the AUD. If the indicator comes out with a value worse than the forecast, this will negatively affect the AUD in the short term.

Thursday, April 28

03:00 JPY Bank of Japan’s interest rate decision. Bank of Japan’s press conference and comments on monetary policy

The Bank of Japan will decide on the interest rate. At the moment, the main rate in Japan is in negative territory, amounting to -0.1%. Most likely, the rate will remain at the same level. If it is cut and deepens into negative territory, such a decision will cause a sharp decline in the yen in the foreign exchange market and an increase in the Japanese stock market. In any case, a jump in volatility in trading in the yen and in the Asian financial market is expected during this period of time.

Since February 2016, the Bank of Japan has kept the deposit rate at -0.1%. The yield target for 10-year bonds is currently in the 0% region. One of the recent accompanying statements from the Bank of Japan said that the bank’s management will continue to “increase the monetary base until inflation is stable above 2%.” “We will not hesitate to take additional easing measures if necessary,” the bank also traditionally said in a statement.

During the press conference, head of the Bank of Japan Haruhiko Kuroda will comment on the bank’s monetary policy. The Bank of Japan continues to adhere to its ultra-soft monetary policy. As Kuroda has repeatedly stated before, “it is appropriate for Japan to patiently continue the current loose monetary policy.” Markets usually react actively to Kuroda’s speeches. For sure, he will again touch upon the topic of monetary policy during his speech, which will cause an increase in volatility not only in yen trading, but throughout the Asian and global financial markets.

If bank officials decide that the Japanese economy is stable and inflation momentum towards the 2% target is not diminishing, they will refrain from changing policy.

06:00 JPY Bank of Japan’s press conference

During the press conference, the head of the Bank of Japan Haruhiko Kuroda will comment on the bank’s monetary policy. Despite earlier measures taken by the bank to stimulate the Japanese economy, inflation remains low, production and consumption are falling, which negatively affects export-oriented Japanese manufacturers. Markets usually react actively to Kuroda’s speeches. If he touches on the topic of monetary policy during his speech, volatility will increase not only in trading on the yen, but throughout the Asian and global financial markets.

12:00 EUR German Harmonized Index of Consumer Prices (HICP) (preliminary release)

This index is published by the EU Statistics Office and is calculated on the basis of a statistical method agreed between all EU countries. It is an indicator for assessing inflation and is used by the Governing Council of the ECB to assess the level of price stability. A positive result strengthens the EUR, a negative result weakens it.

Previous indicator values: +7.6% in March, +5.5% in February, +5.1% in January, +5.7% in December, +6.0% in November, +4.6% in October, +4.1% in September, +3.4% in August, +3.1% in July, +2.1% in June, +2.4% in May, +2.1% in April, +2.0% in March, +1.6% in January and February, -0.7% in December and negative values ​​in the second half of 2020 (in annual terms). If the April data turns out to be better than the previous values, the euro may strengthen in the short term. The growth of the indicator is a positive factor for the euro. The data points to mounting inflationary pressures in Germany. Data worse than the previous value will have a negative impact on the euro. Forecast: +7.6% in April (according to preliminary estimates).

12:30 USD US annual GDP for the 1st quarter (preliminary estimate)

GDP data is one of the key indicators (along with data on the labor market and inflation) for the Fed in terms of its monetary policy. A strong result strengthens US dollar; a weak report on GDP has a negative impact on the US dollar. In the previous 4th quarter, GDP grew by +6.9%, by +2.3% in the 3rd quarter, in the 2nd quarter of GDP – by +6.7%, in the 1st quarter of 2021 by +6.3%. If the data points to a decline in GDP in the 1st quarter of 2022, the dollar will come under pressure. Positive data on GDP will support the dollar and US stock indices. Forecast: +1.0%.

Friday, April 29

06:00 EUR Germany GDP for the 1st quarter (preliminary release)

GDP is considered the most important indicator of the overall health of the economy. The growing trend of the GDP indicator is considered positive for the national currency. The German economy is the locomotive of the entire European economy. A high value of the GDP indicator is considered a positive factor for the EUR, and a low value is considered a negative one.

The growth of the European and German economies slowed down sharply in 2019, and in 2020 the European economy has already entered a recession in many respects. The risk of the coronavirus pandemic, and then the military conflict in Ukraine, were added to domestic political risks after Brexit.

If the GDP data turns out to be weaker than the forecast, this will put even more downward pressure on the euro. Better-than-expected data may strengthen the euro in the short term. However, the risks for the euro are directed towards its further weakening.

Forecast: German GDP grew in the 1st quarter of 2022 by +0.2%.

08:00 CHF Speech by head of the SNB Thomas Jordan

During the speech of SNB Chairman Thomas Jordan, the volatility of CHF trading increases, and traders are waiting for signals regarding the further plans of the SNB monetary policy. The Central Bank of Switzerland has consistently advocated a loose monetary policy in the country, and the national currency is traditionally considered “overpriced”. Jordan’s tough rhetoric will help strengthen the franc. The soft tone of the speech and the propensity to continue the extra loose monetary policy of the SNB will have a negative impact on the franc.

09:00 EUR Eurozone GDP for the 1st quarter (preliminary estimate). Consumer Price Index. Core CPI (preliminary release)

GDP is considered an indicator of the overall health of the economy. The growing trend of the GDP indicator is considered positive for the EUR; a low result weakens the EUR.

Recently, macro data from the Eurozone have been indicating a gradual recovery in the growth rate of the European economy after a sharp drop in early 2020.

Thus, according to the forecast of economists, GDP growth in the Eurozone is expected in the 1st quarter of 2022 by +0.3% (+5.1% in annual terms) after an increase of +0.3% (+4.6% in annual terms ) in Q4, +2.2% (+3.9% YoY) in Q3, +2.2% (+14.3% YoY) in Q2 and falling -0.3% (-1.3% YoY) in Q1 2021, -0.7% (-4.9% YoY) in Q4 2020, growth +12.5% ​​(-4.3% year-over-year) in Q3, -11.8% (-14.7% year-on-year) fall in Q2 and – 3.6% (-3.1% YoY) in Q1 2020.

If the data turns out to be weaker than the forecast and / or previous values, the euro may decline. Better-than-expected data may strengthen the euro in the short term, although the full recovery of the European economy, even to pre-crisis levels, is still far away.

The Consumer Price Index (CPI) is published by Eurostat and measures the change in prices of a selected basket of goods and services over a given period. The index is a key indicator for assessing inflation and changing consumer preferences. A positive result strengthens the EUR, a negative result weakens it.

Forecast for April 2022: +7.5% (yoy) against +7.4% in March, +5.9% in February, +5.1% in January, +5.0% in December. If the data turns out to be worse than the forecast, the euro may short-term, but sharply decline. Data better than the forecast and / or the previous value may strengthen the euro in the short term. The target level of consumer inflation of the ECB is slightly below 2.0%, and the data indicate an acceleration of inflation in the Eurozone.

Core Consumer Price Index (Core CPI) determines the change in prices of a selected basket of goods and services over a given period and is a key indicator for assessing inflation and changing consumer preferences. Food and energy are excluded from this indicator for a more accurate estimate. A high result strengthens the EUR, while a low result weakens it. In December 2021, Core CPI increased by +2.6% (in annual terms), in January – by +2.3%, in February – by +2.7%, in March – by +2.9%. If the data for April 2022 turns out to be worse than the previous value or forecast, this may negatively affect the euro. If the data turns out to be better than the forecast or the previous value, the euro is likely to react with an increase in quotations. Core inflation in the Eurozone is accelerating, which is positive (under normal economic conditions) for the euro. Forecast for April: +3.1%.

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 LiteFinance. 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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