Weekly Outlook, Jun 21 – 25, 2021: Top Economic Events to Watch This Week

The broad-based US dollar is going to end this week on the bullish track, hovering near 2-month highs, after US Federal Chairman Jerome Powell surprised markets by projecting a hike in interest rates and an end to emergency bond-buying sooner than expected. Apart from this, the upticks in the US dollar could also be associated with the downbeat market sentiment, which increased the safe-haven demand in the market and contributed to the gains in the greenback. In addition to this, the previously released downbeat printouts of US data, namely the Weekly Jobless Claims and Philadelphia Fed Manufacturing Survey, failed to leave any meaningful bearish impact on the US dollar.

Looking ahead into the coming week, the series of Retail Sales and Monetary Policy Statements, along with the German Flash Manufacturing PMI and Flash Manufacturing PMI, will determine the direction of the market during the week. Meanwhile, the talk concerning the US stimulus package and headlines on geopolitical tensions will also be closely followed, as they could play a key role in determining risk levels in the market.

Top Economic Events to Watch This Week

1 – AUD Retail Sales (MoM) – Monday 2:30 GMT

2 – Fed Chair Powell Testifies – Tuesday – 19:00 GMT

Federal Reserve Chair Jerome Powell testifies before Congress, providing a broad overview of the economy and monetary policy. Powell’s prepared remarks are published ahead of his appearance on Capitol Hill. A hawkish outlook is good for the USD. Conversely, a dovish view is seen as bearish for the US currency.

3 – German Flash Manufacturing PMI – Wednesday – 8:30 GMT

The German Flash Manufacturing PMI data is typically released by Markit economics. It examines business conditions in the manufacturing sector. The manufacturing PMI is a leading indicator of business conditions and the overall economic conditions in Germany, as the manufacturing sector manages a large part of the total GDP. A result above 50 is seen as positive or bullish for the Euro. Conversely, an output below 50 is seen as bearish or negative for the EUR currency.

Previous Release
ACTUAL: 64.4
DEV: 0.15
CONS: 64
DATE: Tue Jun 1, 2021 12:55

ii) – The French Flash Services PMI data is usually released by Markit Economics, based on the data of many business executives in private sector manufacturing and services companies. This data is typically released on the 3rd working day of each month. Each result is weighted according to the size of the firm and its contribution to the total manufacturing or services output accounted for by the sub-sector to which that company belongs. Results are presented according to questions asked, and they show the percentage of respondents who have reported an improvement, a deterioration or no change since the previous month. A result above 50.0 indicates industry development. On the flip-side, a figure below 50.0 shows industry contraction.

Previous Release
ACTUAL: 52.8
DEV: 0.00
CONS: 52.8
DATE: Thu Jun 3, 2021 12:55

4 – Flash Manufacturing PMI – Wednesday – 14:45 GMT

The Flash Manufacturing PMI data is also typically released by Markit Economics. It provides a measure of business conditions in the manufacturing sector. As the manufacturing sector controls a large part of the total GDP, the manufacturing PMI is an important indicator of business conditions and the overall economic conditions in the United States. If it comes in above 50, it is viewed as positive (or bullish) for the US currency. Conversely, if it is below 50, it is considered bearish for the currency.

ii) – Flash Services PMI

The Flash Services PMI is usually released by Markit Economics. It measures business conditions in the services sector. As the services sector controls a large part of the total GDP, the services PMI is an essential indicator of the overall economic conditions in the US. Once again, a figure above 50 is viewed as positive (or bullish) for the US currency, and anything below 50 is seen as bearish.

Previous Release
ACTUAL: 70.4
DEV: 0.16
CONS: 70,1
DATE: Tue Jun 1, 2021 18:45

5 – German Ifo Business Climate – Thursday – 9:00 GMT

This data is typically released by the Ifo Institute, which is highly respected due to its large sample size and historical correlation with economic conditions in Germany and the broader Eurozone. The release of the figures tends to create a strong market impact. It is also worth mentioning that it is a key indicator of economic health, as businesses react instantly to market conditions. Changes in their sentiment can be an early sign of future economic activity, such as spending, investment and hiring. Apart from this, the Institute surveys more than 7,000 companies to assess the business situation and their short-term planning. Positive economic growth is seen as bullish for the EUR and a low reading, on the other hand, is understood as negative for the Euro.

This data is released by the Bank of England. It contains the results of their vote on interest rates and other policy measures, along with a commentary about the economic conditions that influenced their votes. Apart from this, it also discusses the economic outlook and offers clues on the results of future votes.ii) – BoE Interest Rate Decision – This decision is typically announced by the Bank of England. If the BoE takes a hawkish stance regarding the economic outlook in the UK, and raises the interest rates, it is considered as positive or bullish for the GBP. Conversely, if the BoE has a dovish outlook on the UK economy and retains the ongoing interest rate, or cuts it, it is understood as negative or bearish for the GBP currency.

Previous Release
ACTUAL: 0.1 %
DEV: 0.00
CONS: 0.1 %
DATE: Thu May 6, 2021 16:00