Week of 28th AUGUST - 01st SEPTEMBER 2023
29th August 2023
Tuesday
Tuesday
Michele Bullock, designated Governor of the Reserve Bank of Australia, is set to deliver a speech on August 29, 2023. Furthermore, the US is expected to release data for the S&P/CS Composite-20 HPI y/y, CB Consumer Confidence, and JOLTS Job Openings.
AUD - RBA Governor Michele Bullock's Speech
Traders pay attention because as the designated head of the central bank responsible for short-term interest rates, she wields significant influence over the nation's currency value compared to others. Traders closely analyze her public appearances as they often contain subtle hints about forthcoming monetary policy directions. Regarding its impact on the currency, a stance more hawkish than anticipated is beneficial.
The speech is scheduled to take place on the 29th of August 2023 at 08:40 AM GMT+1.
USD - S&P/CS Composite-20 HPI y/y
The S&P/CS Composite-20 HPI y/y measures housing value changes in 20 major US cities over a year, tracking repeat single-family home sales. It's a key economic gauge: high values indicate a robust housing market, boosting spending and growth, while low values signal a slowdown, reducing spending and growth.
In May, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, indicated a -0.5% annual decline, down from -0.1% the previous month. The 10-City Composite showed a slight decrease of -1.0%, a slight improvement from the -1.1% drop in the prior month. The 20-City Composite reported a consistent -1.7% year-over-year decrease, unchanged from the previous month. Notably, Chicago, Cleveland, and New York led the 20 cities in year-over-year gains. Chicago secured the top spot with a 4.6% increase, Cleveland followed with 3.9%, and New York ranked third with a 3.5% rise. The twelve-month period ending in May 2023 exhibited a balanced distribution, with 10 cities reporting lower prices and 10 reporting higher prices compared to the year ending in April 2023. The subsequent chart illustrated year-over-year returns across various housing price tiers for Chicago.
The S&P/CS Composite-20 HPI year-over-year forecast displays -1.1%.
The upcoming S&P/CS Composite-20 HPI y/y report is scheduled for release on August 29, 2023, at 2:00 PM GMT+1.
29th August 2023
Tuesday
Tuesday
USD - CB Consumer Confidence
Traders are interested because financial confidence predicts consumer spending, a key driver of the majority of economic activity.
Back in July 2023, the Consumer Confidence Index® in the United States saw an uptick to 117.0 from June's 110.1, marking the highest level since July 2021. The Present Situation Index, which assessed consumer sentiments about prevailing business and labor conditions, also improved, rising to 160.0 in July compared to June's 155.3. Furthermore, the Expectations Index, gauging short-term outlooks for income and job opportunities, increased to 88.3 in July, up from June's 80.0. Significantly, this was the first instance since February 2023 that the Expectations Index exceeded 80. Historically, an Expectations Index above 80 has been indicative of an upcoming recession within a year. However, The Conference Board highlighted that the recent surge in consumer sentiment likely stemmed from factors such as reduced inflation and a robust labor market. While immediate recession concerns had diminished, the potential for a year-end recession persisted.
We do not have any predicted information for CB Consumer Confidence.
The forthcoming CB Consumer Confidence data is set for release on August 29, 2023, at 3:00 PM GMT+1
USD - JOLTS Job Openings
Traders care about JOLTS Job Openings because it is a measure of the demand for labor in the economy. A high number of job openings can signal a strong labor market, which can lead to higher wages and inflation. A low number of job openings can signal a weak labor market, which can lead to lower wages and deflation.
In June 2023, the count of job openings decreased by 34,000 compared to the previous month, settling at 9.582 million. This figure marked the lowest point since April 2021, falling below the market consensus of 9.61 million. This decline suggested a potential cooling of the labor market. Notably, job openings decreased in transportation, warehousing, and utilities (-78,000), state and local government education (-29,000), and federal government (-21,000). However, there was an increase in job openings in health care and social assistance (+136,000) and in state and local government, excluding education (+62,000). In terms of regional distribution, job openings declined in the Midwest (-138,000) and the South (-76,000), while experiencing a rise in the West (+107,000) and the Northeast (+73,000).
The projected figure for US JOLTS job openings stands at 9.57 million.
The next JOLTS Job Openings is scheduled on the 29th of August 2023 at 3:00 PM GMT+1.
30th August 2023
Wednesday
Five high-impact news announcements are scheduled for August 30, 2023.
AUD - Australian CPI y/y
EUR - German Prelim CPI m/m
EUR - Spanish Flash CPI y/y
USD - ADP Non-Farm Employment Change
USD - Prelim GDP q/q
AUD - Australian CPI y/y
Traders are keenly interested because consumer prices have a substantial impact on overall inflation. The significance of inflation in currency valuation arises from the fact that as prices rise, central banks are compelled to increase interest rates to effectively address inflationary pressures.
According to the most recent data released by the Australian Bureau of Statistics (ABS) last Wednesday, the country's Consumer Price Index (CPI) rose by 0.8% in the second quarter of 2023. This was lower than the 1.4% growth seen in the previous quarter. The market had expected a 1.0% increase during that period. In terms of the entire year, Australia's CPI inflation went down to 6.0% in Q1 2023, which was different from the projected 6.2% increase and the previous 7.0% figure. In the second quarter, the RBA Trimmed Mean CPI increased by 1.0% for the quarter and 5.9% annually. The market predictions were around a 1.1% quarterly rise and a 5.9% yearly increase for the quarter ending in June. Additionally, the monthly Consumer Price Index inflation for June fell to 5.4% compared to the expected 5.4%, following May's increase of 5.6%.
An expectation of 5.1% is held for the year-on-year Australian CPI.
The upcoming Australian CPI y/y is scheduled on the 30th of August 2023 at 02:30 AM GMT+1.
EUR - German Prelim CPI m/m
Traders pay attention to the German Preliminary CPI m/m because it gauges how prices are changing in Germany. Inflation reflects how quickly costs for products and services are increasing. High inflation can weaken consumers' and businesses' buying ability and prompt higher interest rates. The German Preliminary CPI m/m is published monthly by the German Federal Statistical Office, using a collection of items frequently bought by German households.
The annual inflation rate in Germany was confirmed at 6.2% in July 2023, slightly down from 6.4% in June, and it remained close to May’s 14-month low of 6.1%. The core rate, which excluded volatile items such as food and energy, also eased to 5.5%, adding to indications that inflationary pressures in the country were starting to cool. However, both rates stayed well above the European Central Bank's target of 2.0%. The overall inflation for goods slowed to 7.0% from 7.3%, due to softer increases in the cost of food (11.0% vs 13.7%), primarily led by sugar, jam, honey, and other confectionery (18.9% vs 19.4%). Additionally, services inflation eased slightly (5.2% vs 5.3%), with rent rising by 2.1%. Meanwhile, energy inflation accelerated (5.7% vs. 3.0%), especially for solid fuels (12.8%), natural gas (8.5%), and electricity (17.6%). On a monthly basis, consumer prices were up 0.3% in July, the same pace as in June. The Consumer Price Index harmonized with other European countries, climbing 6.5% on the year, and experiencing a 0.5% rise month-on-month.
The consensus estimate for the German Preliminary Consumer Price Index (CPI) month-on-month (m/m) change is projected to be 0.2%.
The German Preliminary Consumer Price Index (CPI) for the month-over-month (m/m) change is scheduled for August 30th, 2023. The release will occur throughout the entire day.
EUR - Spanish Flash CPI y/y
Traders consider the Spanish Flash Consumer Price Index (CPI) year-over-year (y/y) data crucial due to consumer prices constituting a significant portion of overall inflation. Inflation holds significance in currency valuation as increasing prices prompt the central bank to raise interest rates in alignment with their mandate for inflation control.
In July 2023, Spain's annual inflation rate increased to 2.3% from June's 1.9%, which had been the lowest since March 2021 and had aligned with initial estimates. The decline in transport costs eased due to higher fuel and lubricant expenses, while prices for clothing, footwear, recreation, and culture rose, driven by tourist packages. Moreover, prices for food and non-alcoholic beverages also rose more rapidly (10.8% vs. 10.3%), attributed to increased costs of fruit and oils/fats. Housing costs notably dropped (-14.9% vs. -12.7%), primarily due to reduced electricity and gas expenses. Meanwhile, core inflation saw a slight increase to 6.2% from 5.9%.
Spanish Flash Consumer Price Index (CPI) stands at 2.3%. (30th August 2023 08:00AM GMT+1)
The next Spanish Flash CPI y/y is scheduled for the 30th of August 2023 at 08:00 AM GMT+1
USD - ADP Non–Farm Employment change
Traders are interested because creating jobs is a key sign of people having more money to spend, which drives a big part of the economy.
In July, private sector companies added more jobs than anticipated, driven by a surge in leisure and hospitality positions, according to ADP's report. The month saw an increase of 324,000 jobs, mainly attributed to a notable rise of 201,000 jobs in hotels, restaurants, bars, and related industries. This figure greatly surpassed the expected 175,000, although it was a decrease from the revised 455,000 reported for June. The report underscores the enduring strength of the U.S. job market, even as the Federal Reserve implemented measures to moderate the economy and address inflation.
The projected figure for the US ADP Non-Farm Employment Change stands at 210,000.
The next ADP Non-Farm Employment Change is scheduled for August 30, 2023, at 1:15 PM GMT+1.
USD - Prelim GDP q/q
Traders are interested because it serves as the most comprehensive indicator of economic activity and is the primary gauge of the economy's overall health.
In the previous announcement, it was mentioned that the second revision to the GDP growth rate for the first quarter of 2023 had exceeded expectations slightly, coming in at 1.3% compared to the projected 1.1%. Both of these figures were annualized, reflecting an equivalent yearly rate, resulting in an overall growth of 0.32% within the quarter. Additionally, it was indicated that the measurement of inflation, as assessed by the GDP deflator, a comprehensive index for inflation, had once again slightly outperformed forecasts. The recorded rate was 4.2%, in comparison to the predicted 4.0% (when annualized). It's worth noting that the broader inflation index had fallen by over 50% from its peak of 9.0% since the summer prior.
US Preliminary GDP quarter-over-quarter stands at 2.4%. (30th August 2023 1:30 PM GMT+1)
The upcoming announcement for Prelim GDP q/q will occur on August 30th, 2023, at 1:30 PM GMT+1.
31st August 2023
Thursday
Thursday
On August 31st, China will announce its Manufacturing PMI, while the US will release the Core PCE Price Index month-over-month and provide updates on Unemployment Claims.
CNY – Manufacturing PMI
Traders value the Manufacturing PMI because it acts as a leading indicator of economic health. Businesses react quickly to market conditions, and their purchasing managers have the most up-to-date information on how the company's finances are doing.
In the prior announcement, which was released on Monday, July 31st by the National Bureau of Statistics, the official manufacturing purchasing managers' index recorded a reading of 49.3 in July. This demonstrated a slight increase from June's 49.0, May's 48.8, and April's 49.2. The official manufacturing PMI showed a modest improvement, reaching 49.3 in July, and it continued to stay below the crucial 50-point threshold that separates expansion from contraction.
Analysts estimate the China Manufacturing PMI to be 49.5.
China's Manufacturing PMI will be announced next on August 31, 2023, at 02:30 AM GMT+1.
USD - Core PCE Price Index m/m
Traders are interested as it serves as the Federal Reserve's primary gauge of inflation. Inflation holds significance in currency valuation because when prices increase, the central bank tends to raise interest rates in line with its mandate to control inflation.
In June 2023, Core PCE prices in the US, excluding food and energy, experienced a 0.2% month-over-month increase. This showed a slight decrease from the 0.3% rise in the previous month, aligning with market forecasts. The annual rate, which is the Federal Reserve's preferred inflation measurement, grew by 4.1%. This marked the lowest rate since September 2021 and was slightly below market expectations of 4.2%. When factoring in food and energy costs, the PCE price index climbed by 0.2% from the previous month and by 3% from the same period of the previous year. This represented the lowest level since March 2021.
The current projection for the US Core PCE Price Index month-over-month change indicates a value of 0.2%.
The following Core PCE Price Index monthly is set for August 31, 2023, at 1:30 PM GMT+1.
USD -Unemployment Claims
Traders place importance on this data because, even though it's typically considered a lagging indicator, the quantity of unemployed individuals serves as a crucial indicator of overall economic well-being. This is due to the strong correlation between consumer spending and labor-market conditions. Moreover, unemployment holds significant influence for decision-makers guiding the nation's monetary policy.
The labor market is continuing to defy expectations in the face of the Fed's aggressive interest hikes since March 2022, as employers hoard workers after struggling to find labor during the COVID-19 pandemic. Labor market strength and receding inflation are fanning optimism that the economy could avoid a recession. The number of people receiving benefits after an initial week of aid, a proxy for hiring, decreased 9,000 to 1.702 million during the week ending Aug. 12, the claims report showed. These so-called continuing claims remain low by historical standards, indicating that some laid-off workers are experiencing short spells of unemployment.
The projected number of US jobless claims appears to be 236,000.
The forthcoming unemployment claims data is set to be unveiled on August 31, 2023, at 1:30 PM GMT+1.
1st September 2023
Friday
Friday
On September 1st, 2023, a number of high-impact announcements are scheduled. Switzerland will unveil the Consumer Price Index month-over-month (CPI m/m), Canada will release the Gross Domestic Product month-over-month (GDP m/m), and the United States will announce the Average Hourly Earnings month-over-month, Non-Farm Employment Change, Unemployment Rate, and ISM Manufacturing Purchasing Managers' Index (PMI).
CHF – CPI m/m
Traders consider this significant because consumer prices contribute significantly to overall inflation. Inflation holds importance in currency valuation as escalating prices prompt the central bank to increase interest rates, aligning with their mandate to manage inflation.
In July 2023, the consumer price index (CPI) stood at 106.2 points, showing a 0.1% decrease from the prior month (December 2020 = 100), indicating lower consumer prices. The Federal Statistical Office (FSO) reported an annual inflation rate of +1.6%. This change was attributed to lower costs for clothing and footwear due to clearance sales, along with reduced expenses for air travel and international package holidays. Conversely, renting private vehicles and additional lodging became more expensive.
The expected month-over-month CPI rate in Switzerland is 0.2%.
The next CPI m/m will take place on September 1, 2023, at 7:30 AM GMT+1.
CAD – GDP m/m
Traders find it important because it represents the most comprehensive indicator of economic activity and serves as the primary measure of the economy's overall health.
In May, there was a 0.3% rise in real gross domestic product (GDP), building on the 0.1% increase seen in April. Services-producing industries recorded a 0.5% growth, although the increase was partly countered by a 0.3% decrease in goods-producing industries. Overall, out of the 20 industrial sectors, 12 displayed increases.
The month-over-month GDP forecast for Canada is estimated to be 0.0%.
The next upcoming announcement will be released on the 1st of September 2023 at 1:30 PM GMT+1
USD - Average Hourly Earnings m/m
Traders find it significant as it serves as a leading indicator of consumer inflation. When businesses experience higher labor costs, they often pass on these increased expenses to consumers.
In July 2023, Average Hourly Earnings in the United States exceeded expectations by rising 0.4% compared to the previous month, outperforming the projected 0.3% increase.
A forecast of 0.4% is in place for the United States' average hourly earnings month-over-month change.
The upcoming announcement is scheduled for September 1, 2023, at 1:30 PM GMT+1.
USD - Non–Farm Employment Change
This announcement holds significance because job creation acts as a key leading indicator for consumer spending, which constitutes a major portion of overall economic activity.
In July 2023, the US economy had added 187K jobs, which fell short of the anticipated 200K, as well as the downwardly revised 185K figure recorded in June. While this reading remained lower than the 12-month average gain of 312K, it still managed to surpass the benchmark of 70K-100K jobs required per month for accommodating working-age population growth. Significant job growth was observed in the healthcare sector, with a notable increase of 63K positions. Among these, ambulatory health care services contributed 35K jobs, and hospitals contributed 16K jobs. Moreover, the social assistance sector added 24K jobs, while financial activities saw a rise of 19K jobs, primarily driven by gains in real estate and rental and leasing (12K). Additionally, the wholesale trade sector witnessed an increase of 18K jobs. Although employment in leisure and hospitality had risen by 17K jobs, recent months had indicated only marginal changes in job gains within this sector. This contrasted with the average monthly increase of 67K jobs observed during the first quarter (Q1). Nonetheless, leisure and hospitality employment remained notably lower, still standing at 352K jobs below the levels recorded in February 2020. Payroll figures for May underwent downward revisions, ultimately resulting in a combined May and June employment figure that was 49K jobs lower than initially reported.
The forecast for Non-Farm Employment Change appears to be around 180,000.
The upcoming Non-Farm Employment Change announcement is scheduled for September 1, 2023, at 1:30 PM GMT+1.
USD - Unemployment Rate
While often classified as a lagging indicator, the quantity of unemployed individuals plays a significant role as an indicator of broader economic vitality. This is due to the strong correlation between consumer spending and labor-market conditions. Moreover, unemployment holds considerable weight in the considerations of policymakers responsible for guiding the nation's monetary strategies.
The unemployment rate stood at 3.5%, differing from the anticipated steady rate of 3.6%. This rate is marginally above the lowest point recorded since late 1969.
An expected figure of 3.5% is projected for the unemployment rate in the United States.
The next unemployment rate is scheduled on the 1st of September 2023 at 1:30 PM GMT+1.
USD - ISM Manufacturing PMI
This indicator holds importance as a leading factor in gauging economic health. Businesses exhibit rapid responses to market conditions, while their purchasing managers possess a notably current and relevant understanding of the company's perspective on the economy.
In July, the Manufacturing PMI® rose to 46.4%, indicating a 0.4 percentage point increase from June's 46%. This figure signified the eighth consecutive month of contraction in the overall economy, following a 30-month period of expansion. The New Orders Index remained in contraction at 47.3%, up by 1.7 percentage points compared to June's 45.6%. The Production Index improved to 48.3%, showing a 1.6-percentage point increase from June's 46.7%. The Prices Index increased to 42.6%, up by 0.8 percentage point from June's 41.8%. The Backlog of Orders Index also improved to 42.8%, registering a 4.1 percentage point increase from June's 38.7%. However, the Employment Index continued to contract, registering 44.4%, down by 3.7 percentage points from June's 48.1%.
The projected ISM Manufacturing PMI forecast stands at 46.6.
The next ISM Manufacturing PMI is scheduled on the 1st of September 2023 at 3:00 PM GMT+1.
Disclaimer: The market news provided herein is for informational purposes only and should not be considered as trading advice.
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