The US dollar emerged as the top currency last week as the US dollar index posted a 4-month high. Boosted by broadly better than expected economic data especially on the housing sector the dollar kept its gains into the weekly close ahead of the FOMC meeting this coming week. The Swiss franc was down 0.53% against the US dollar but managed to remain the second best currency across the board.
The Turkish lira closed the week 3.29% lower against the US dollar following last week’s political developments in the country. The New Zealand dollar was the second worst currency last week, closing over 2% for the week as investors started to price in RBNZ rate cuts at the August meeting. Last week’s RBNZ economic report showed that the central bank was willing to lower rates following the weaker pace of inflation and a rising exchange rate.
Economic Calendar for the Week 25/07 – 29/07
|09:00||EUR||German Ifo Business Climate||107.7||108.7|
|USD||S&P/CS Composite-20 HPI y/y||5.60%||5.40%|
|14:45||USD||Flash Services PMI||51.2||51.4|
|15:00||USD||CB Consumer Confidence||95.6||98|
|USD||New Home Sales||560K||551K|
|USD||Richmond Manufacturing Index||-4||-7|
|AUD||Trimmed Mean CPI q/q||0.40%||0.20%|
|EUR||German Import Prices m/m||0.60%||0.90%|
|EUR||GfK German Consumer Climate||9.9||10.1|
|09:00||EUR||M3 Money Supply y/y||5.00%||4.90%|
|EUR||Private Loans y/y||1.70%||1.60%|
|09:30||GBP||Prelim GDP q/q||0.50%||0.40%|
|GBP||Index of Services 3m/3m||0.30%||0.50%|
|13:30||USD||Core Durable Goods Orders m/m||0.30%||-0.30%|
|USD||Durable Goods Orders m/m||-1.10%||-2.30%|
|15:00||USD||Pending Home Sales m/m||1.90%||-3.70%|
|USD||Federal Funds Rate||<0.50%||<0.50%|
|28-Jul||02:30||AUD||Import Prices q/q||1.60%||-3.00%|
|07:00||GBP||Nationwide HPI m/m||0.00%||0.20%|
|All Day||EUR||German Prelim CPI m/m||0.20%||0.10%|
|08:55||EUR||German Unemployment Change||-3K||-6K|
|23:45||NZD||Building Consents m/m||-0.90%|
|29-Jul||00:05||GBP||GfK Consumer Confidence||-7||-9|
|00:30||JPY||Household Spending y/y||-0.40%||-1.10%|
|JPY||Tokyo Core CPI y/y||-0.40%||-0.50%|
|JPY||National Core CPI y/y||-0.40%||-0.40%|
|00:50||JPY||Retail Sales y/y||-1.20%||-2.10%|
|JPY||Prelim Industrial Production m/m||0.60%||-2.60%|
|02:00||NZD||ANZ Business Confidence||20.2|
|AUD||Private Sector Credit m/m||0.50%||0.40%|
|Tentative||JPY||Monetary Policy Statement|
|06:00||JPY||BOJ Outlook Report|
|JPY||BOJ Core CPI y/y||0.70%||0.80%|
|JPY||Housing Starts y/y||-2.80%||9.80%|
|06:30||EUR||French Prelim GDP q/q||0.20%||0.60%|
|07:00||EUR||German Retail Sales m/m||0.00%||0.90%|
|Tentative||JPY||BOJ Press Conference|
|07:45||EUR||French Consumer Spending m/m||0.10%||-0.70%|
|EUR||French Prelim CPI m/m||-0.30%||0.10%|
|08:00||CHF||KOF Economic Barometer||101.6||102.4|
|EUR||Spanish Flash CPI y/y||-0.50%||-0.80%|
|EUR||Spanish Flash GDP q/q||0.70%||0.80%|
|09:30||GBP||Net Lending to Individuals m/m||4.2B||4.3B|
|GBP||M4 Money Supply m/m||0.40%||1.20%|
|10:00||EUR||CPI Flash Estimate y/y||0.10%||0.10%|
|EUR||Core CPI Flash Estimate y/y||0.90%||0.90%|
|EUR||Prelim Flash GDP q/q||0.30%||0.60%|
|EUR||Italian Prelim CPI m/m||0.00%||0.10%|
|USD||Advance GDP q/q||2.60%||1.10%|
|USD||Advance GDP Price Index q/q||1.90%||0.40%|
|USD||Employment Cost Index q/q||0.60%||0.60%|
|15:00||USD||Revised UoM Consumer Sentiment||90.2||89.5|
|USD||Revised UoM Inflation Expectations||2.80%|
|21:00||EUR||EBA Bank Stress Test Results|
Currencies/Events to Watch this Week
AUD: Australia’s second quarter inflation data will be the main focus next week with the RBA rate cuts tied into the CPI release. Forecasts point to a 0.40% increase in inflation during the second quarter, while on a year over year basis, CPI is expected to rise 1.20%, slower than the 1.30% year over year increase in Q1. Besides the CPI data on Wednesday, export and import prices for the second quarter is due on Thursday and is expected to show a rebound of 2.90% and 1.60% respectively for Q2 following sharp declines in the previous quarter.
JPY: After starting off on a quiet note, the economic data from Japan will pick up steam on Thursday with fresh inflation figures due. The national core CPI is expected to fall 0.40%, the same pace as in May, while industrial production is expected to shrink 2.90% in July, extending the 0.40% declines from May. On Friday, the Bank of Japan’s monetary policy meeting is due. The central bank is expected to increase its monetary base by 20 trillion yen according to some news reports, but there is a chance that the BoJ could stand pat on policy in July as well. No changes are expected to the BoJ’s lending rate which is at -0.10%.
GBP: In the UK, the focus will be on the second quarter GDP estimates. Preliminary release on Wednesday is expected to show that the UK’s economy grew at a pace of 0.50%, higher than the 0.40% GDP growth rate seen in the first quarter. On a year over year basis, UK’s GDP is expected to rise 2.10%. The economic calendar from the UK remains light for the most of the week.
EUR: Data from the Eurozone next week will see Germany’s retail sales which are expected to stay flat on the month in June after rising 0.90% in May. Germany’s unemployment data will also be coming out on Thursday and is expected to show the unemployment rate staying steady at 6.10%. Consumer prices are expected to rise 0.30% in July according to the flash estimates, a modest pick up from 0.10% increase in June on a month over month basis. The Eurozone flash CPI estimates are also up later in the week with the core CPI expected rise 0.90%, the same pace as in June.
CAD: Economic data from Canada next week is limited to the GDP release on Friday, leaving most of the flows to the US-centric data. GDP for May is forecast to fall 0.50%; this follows April, an increase of 0.10%. The BoC, in its latest monetary policy meeting, noted that GDP expectation was lower at 1.30% with the previous estimates of 1.70%. So far, Canada’s GDP was recorded at 1.10% in April.
USD: USD: The FOMC meeting due on July 27 will be the main event in focus next week. Although economic data last week was limited to the housing markets, the Fed is expected to turn more upbeat after June’s strong jobs report. Still, a single jobs report is unlikely to see the Fed hike rates this week especially with no press conference being scheduled. Later in the week, the focus turns to the first estimate of the second quarter GDP. Economists forecast a GDP growth rate of 2.6% in the second quarter, modestly higher compared to Q1’s 1.10% increase. On the economic front, consumer confidence and new home sales data followed by durable goods orders will be the other events to watch out for over the week.