The British pound lost another 3.30% over the week, marking the second week of declines. The week before, the pound was down by over 4%. The markets remained mixed with a modest risk on rally. The Kiwi gained 0.72% as a result while the Canadian dollar also managed to keep its gains, following a modestly upbeat GDP numbers for April. The risk on sentiment saw yen giving back its gains, falling 0.26% on the week, relative to the US dollar.
On the economic front, the US Q1 GDP numbers were revised higher reflecting a 1.10% quarter over quarter GDP growth, compared to the second estimates which showed a 0.80% increase. In the UK, the first quarter GDP was confirmed at 0.40%. However, the sterling focused on the Brexit developments with economic data taking a back seat.
Economic Calendar for the Week 27/06 – 01/07
|05-Jul||02:45||CNY||Caixin Services PMI||52.3||51.2|
|08:15||EUR||Spanish Services PMI||55.2||55.4|
|08:45||EUR||Italian Services PMI||50.3||49.8|
|08:50||EUR||French Final Services PMI||49.9||49.9|
|08:55||EUR||German Final Services PMI||53.2||53.2|
|09:00||EUR||Final Services PMI||52.5||52.4|
|10:00||EUR||Retail Sales m/m||0.60%||0.00%|
|10:30||GBP||BOE Gov Carney Speaks|
|GBP||BOE Financial Stability Report|
|15:00||USD||Factory Orders m/m||-0.70%||1.90%|
|USD||IBD/TIPP Economic Optimism||49.3||48.2|
|19:30||USD||FOMC Member Dudley Speaks|
|06-Jul||07:00||EUR||German Factory Orders m/m||1.10%||-2.00%|
|09:30||GBP||Housing Equity Withdrawal q/q||-10.1B||-9.5B|
|14:45||USD||Final Services PMI||51.5||51.3|
|15:00||USD||ISM Non-Manufacturing PMI||53.5||52.9|
|19:00||USD||FOMC Meeting Minutes|
|07-Jul||07:00||EUR||German Industrial Production m/m||0.10%||0.80%|
|07:45||EUR||French Trade Balance||-4.8B||-5.2B|
|08:00||CHF||Foreign Currency Reserves||602B|
|08:30||GBP||Halifax HPI m/m||0.40%||0.60%|
|09:30||GBP||Manufacturing Production m/m||-1.40%||2.30%|
|GBP||Industrial Production m/m||-1.00%||2.00%|
|12:30||EUR||ECB Monetary Policy Meeting Accounts|
|13:15||USD||ADP Non-Farm Employment Change||151K||173K|
|13:30||CAD||Building Permits m/m||2.10%||-0.30%|
|07:00||EUR||German Trade Balance||22.3B||24.0B|
|EUR||French Industrial Production m/m||-0.40%||1.20%|
|09:30||GBP||Goods Trade Balance||-10.2B||-10.5B|
|USD||Average Hourly Earnings m/m||0.20%||0.20%|
|USD||Non-Farm Employment Change||181K||38K|
|20:00||USD||Consumer Credit m/m||17.3B||13.4B|
Currencies/Events to Watch this Week
AUD: On the economic front, data from Australia will include building approvals data which is forecast to fall 3.0% on the month in May. Last week Australia’s new home sales fell for the second month as data from HIA showed a 4.40% decline. Retail sales are also on the tap next week, expected to rise at a pace of 0.20%, same as the month before in April. On Tuesday, the RBA meets for its monetary policy meeting, which is unlikely to see any rate cuts. More importantly, markets will focus on the RBA’s assessment of the Brexit outcome in terms of the economic impact on Australia.
CNY: Data from China over the week starts with Caixin services PMI, forecast to rise to 52.3 in June, following 51.2 in May. China’s forex reserves are also expected during the week followed by inflation data next Sunday.
JPY: A slow week for the yen, BoJ’s Kuroda is expected to speak on Thursday, 7th July. On the economic front, not many releases are scheduled with only the current account data and trade balance numbers coming out on the day. The yen is thus likely to seek direction from the dollar and the general market sentiment.
EUR: Eurozone services PMI’s are up next week with the final services PMI forecast to remain unchanged at 52.4. Producer price index is also expected during the week, forecast to show an increase of 0.20% in May, following April’s 0.30% declines. On a year over year, Eurozone PPI is estimated to have fallen 4.0%. Retail sales in the Eurozone are expected to show a pickup, rising 0.30% on a month over month basis. Data from Germany and France include factory orders and industrial production data for the month of May.
GBP: Economic data from the UK is packed with trade balance numbers due on Friday while the remainder of the week will see the construction and services PMI numbers coming out. On Tuesday, BoE’s Carney will be speaking after the central bank will release the financial stability report. Industrial and manufacturing production data for May is expected to show moderation, rising 1.0% and 0.80% on a year over year basis, respectively.
CAD: Canada will be looking at the monthly jobs report for June. A volatile print in recent times, forecasts call for the unemployment rate to have increased to 7.0% while the net employment change is expected to show 6.6k jobs being added on the month. Building permits are expected to rise 1.90% on the month in May.
USD: Short week for the US, which is closed on July 4th Independence Day celebrations. Data over the week includes ADP payrolls reports on Thursday which is forecast to show 150k jobs being added on the month. This is followed by Friday’s nonfarm payrolls report which is expected to show that the US economy added 179k jobs on average during June. The unemployment rate is expected to rise back to 4.80%. FOMC meeting minutes will be released on Tuesday, which will also see various Fed members speaking.