Weekly Forex Forecast: August 10 – 14
The Australian dollar emerged on the top of the list this week gaining over 1.67% for the week beating all its peers. With the exception of the unemployment rate ticking higher for the month, retail sales beat expectations and the Aussie gained further as the RBA struck a neutral tone while keeping interest rates unchanged. AUDUSD closed the week with gains of over 122 pips. The Kiwi dollar was lagging behind closing the week with gains of 0.48%. There was not much of economic data from New Zealand last week with the exception of the quarterly and monthly unemployment data which was mixed, making the bounce in NZD which has been weaker for the past few months, more of a profit taking than anything else.
The Swiss Franc was the weakest currency last week as it lost over -1.85%. Inflation numbers were subdued from the country and the current expectations of a US fed rate hike in September led to the long positions overwhelm the Swiss franc shorts. The British Pound was the next weakest losing -0.8% for the week. The Bank of England poured cold water as investors expected to see the BoE strike a more hawkish tone. Investors were obviously disappointed as most of the hawkish comments from various BoE members did not quite translate into voting for rate hikes.
Fundamentals for the Week August 10 – 14
Date | Time | Currency | Detail | Forecast | Previous |
10-Aug | 02:50 | JPY | Current Account | 1.41T | 1.64T |
JPY | Bank Lending y/y | 2.50% | |||
08:00 | JPY | BOJ Monthly Report | |||
JPY | Consumer Confidence | 42.2 | 41.7 | ||
JPY | Economy Watchers Sentiment | 53.1 | 51 | ||
11:30 | EUR | Sentix Investor Confidence | 20.2 | 18.5 | |
14:15 | USD | FOMC Member Fischer Speaks | |||
16:00 | USD | FOMC Member Lockhart Speaks | |||
17:00 | USD | Labor Market Conditions Index m/m | 0.8 | ||
19:25 | USD | FOMC Member Lockhart Speaks | |||
11-Aug | 02:01 | GBP | BRC Retail Sales Monitor y/y | 1.80% | |
02:50 | JPY | M2 Money Stock y/y | 3.90% | 3.80% | |
04:30 | AUD | NAB Business Confidence | 10 | ||
06:45 | JPY | 30-y Bond Auction | 1.43|2.2 | ||
09:00 | EUR | German WPI m/m | 0.20% | -0.20% | |
JPY | Prelim Machine Tool Orders y/y | 6.60% | |||
11th-14th | CNY | New Loans | 725B | 1279B | |
11th-14th | CNY | M2 Money Supply y/y | 11.70% | 11.80% | |
12:00 | EUR | German ZEW Economic Sentiment | 31.1 | 29.7 | |
EUR | ZEW Economic Sentiment | 43.9 | 42.7 | ||
13:00 | USD | NFIB Small Business Index | 95.4 | 94.1 | |
15:15 | CAD | Housing Starts | 205K | 203K | |
15:30 | USD | Prelim Nonfarm Productivity q/q | 1.60% | -3.10% | |
USD | Prelim Unit Labor Costs q/q | -0.10% | 6.70% | ||
16:30 | GBP | CB Leading Index m/m | -0.40% | ||
11th-13th | USD | Mortgage Delinquencies | 5.54% | ||
17:00 | USD | Wholesale Inventories m/m | 0.40% | 0.80% | |
12-Aug | 02:50 | JPY | Monetary Policy Meeting Minutes | ||
JPY | PPI y/y | -2.90% | -2.40% | ||
03:30 | AUD | Westpac Consumer Sentiment | -3.20% | ||
04:30 | AUD | Wage Price Index q/q | 0.60% | 0.50% | |
07:30 | JPY | Revised Industrial Production m/m | 0.80% | 0.80% | |
JPY | Tertiary Industry Activity m/m | 0.10% | -0.70% | ||
08:30 | CNY | Industrial Production y/y | 6.70% | 6.80% | |
CNY | Fixed Asset Investment ytd/y | 11.50% | 11.40% | ||
CNY | Retail Sales y/y | 10.60% | 10.60% | ||
11:00 | EUR | Italian Trade Balance | 3.98B | 4.18B | |
11:30 | GBP | Average Earnings Index 3m/y | 2.80% | 3.20% | |
GBP | Claimant Count Change | 1.4K | 7.0K | ||
GBP | Unemployment Rate | 5.60% | 5.60% | ||
12:00 | CHF | ZEW Economic Expectations | -5.4 | ||
EUR | Industrial Production m/m | -0.10% | -0.40% | ||
Tentative | EUR | German 10-y Bond Auction | 0.88|1.1 | ||
13:00 | AUD | RBA Deputy Gov Lowe Speaks | |||
17:00 | USD | JOLTS Job Openings | 5.42M | 5.36M | |
17:30 | USD | Crude Oil Inventories | -4.4M | ||
20:01 | USD | 10-y Bond Auction | 2.23|2.7 | ||
21:00 | USD | Federal Budget Balance | -113.5B | 51.8B | |
13-Aug | 01:30 | NZD | Business NZ Manufacturing Index | 55.2 | |
01:45 | NZD | FPI m/m | 0.50% | ||
02:01 | GBP | RICS House Price Balance | 42% | 40% | |
02:50 | JPY | Core Machinery Orders m/m | -4.90% | 0.60% | |
04:00 | AUD | MI Inflation Expectations | 3.40% | ||
05:15 | AUD | RBA Assist Gov Kent Speaks | |||
09:00 | EUR | German Final CPI m/m | 0.20% | 0.20% | |
09:45 | EUR | French CPI m/m | -0.40% | -0.10% | |
10:15 | CHF | PPI m/m | -0.20% | -0.10% | |
14:30 | EUR | ECB Monetary Policy Meeting Accounts | |||
15:30 | CAD | NHPI m/m | 0.30% | 0.20% | |
USD | Core Retail Sales m/m | 0.50% | -0.10% | ||
USD | Retail Sales m/m | 0.50% | -0.30% | ||
USD | Unemployment Claims | 272K | 270K | ||
USD | Import Prices m/m | -1.00% | -0.10% | ||
17:00 | USD | Business Inventories m/m | 0.30% | 0.30% | |
17:30 | USD | Natural Gas Storage | 32B | ||
20:01 | USD | 30-y Bond Auction | 3.08|2.2 | ||
14-Aug | 01:45 | NZD | Retail Sales q/q | 0.50% | 2.70% |
NZD | Core Retail Sales q/q | 0.70% | 2.90% | ||
14th-18th | CNY | Foreign Direct Investment ytd/y | 8.00% | ||
08:30 | EUR | French Prelim GDP q/q | 0.20% | 0.60% | |
09:00 | EUR | German Prelim GDP q/q | 0.50% | 0.30% | |
09:45 | EUR | French Prelim Non-Farm Payrolls q/q | 0.10% | 0.00% | |
11:00 | EUR | Italian Prelim GDP q/q | 0.30% | 0.30% | |
11:30 | GBP | Construction Output m/m | 2.40% | -1.30% | |
12:00 | EUR | Final CPI y/y | 0.20% | 0.20% | |
EUR | Flash GDP q/q | 0.40% | 0.40% | ||
EUR | Final Core CPI y/y | 1.00% | 1.00% | ||
15:30 | CAD | Manufacturing Sales m/m | 2.10% | 0.10% | |
USD | PPI m/m | 0.10% | 0.40% | ||
USD | Core PPI m/m | 0.10% | 0.30% | ||
16:15 | USD | Capacity Utilization Rate | 78.00% | 78.40% | |
USD | Industrial Production m/m | 0.30% | 0.30% | ||
17:00 | USD | Prelim UoM Consumer Sentiment | 93.5 | 93.1 | |
USD | Prelim UoM Inflation Expectations | 2.80% |
Currencies/Events to Watch this Week
After a busy first week of August, the markets will be looking to a more relaxed week ahead with the current themes playing out.
New Zealand retail sales: The next main economic indicator from New Zealand will be the quarterly retail sales report. Expectations are again very subdued with the polled economists expecting retail sales in the last quarter to have grown a meager 0.5% on the headline and 0.7% on the core, down from 2.7% and 2.9% from the quarter before. A disappointing print on these already dovish estimates will likely see the Kiwi resume its bearish trend. However, in the event that retail sales beat estimates, we could expect the current short term bounce continue to tread upwards.
Eurozone GDP: After a soft calendar in the first week, the Eurozone will see a busy week ahead with various countries reporting the quarterly GDP numbers and inflation reading. For the Eurozone, GDP is expected to stay put at 0.4% for the quarter while rising 0.2% for the year. Of interest will be the German preliminary GDP number which is expected to show the country grow at a pace of 0.5% over the previous quarter. Also on the agenda will be the Eurozone final CPI which is expected to print 0.2% on the headline and 1.0% on the core.
UK Jobs Report: After a rather disappointing week for investors as far the British Pound is concerned, the markets will look to the monthly jobs report. Expectations are bleak with the unemployment rate in the UK expected to remain at 5.6% while the average earnings index is expected to rise a slower pace of 2.8% for the month. A miss on the estimates could cement the BoE’s view that while there will be a hike in interest rates, it could come at a much slower pace than anticipated.
Canada Manufacturing sales: Not much of data from Canada this week with the exception of manufacturing sales which is expected to post a strong growth of 2.1%, up from 0.1% previously. The CAD has been trading mixed despite a match in estimates on the monthly jobs report. A beat on the hawkish expectations in manufacturing sales could see some short strength in the Canadian Dollar.
Fed Speak, Retail Sales: The US markets kicks off with a lot of Fed speeches scheduled on Monday. The markets will be expecting the Fed members to maintain their hawkish views on interest rate hikes. In terms of economic data, this week will see the release of the monthly retail sales numbers which is expected to grow at a pace of 0.5% on both the headline and core readings followed by the UoM consumer sentiment and inflation expectations.