Economic calendar review: Focus shifts to Fed interest rate decision

The US dollar was under pressure this week as investors continued to favour foreign currencies like the euro, Swiss franc, and sterling. The dollar index, which measures the performance of the greenback against peer currencies, fell to the lowest level since September 2018. It has dropped for the past consecutive weeks. In this report, we will look at the key events to watch in the economic calendar in the coming week.

Federal Reserve interest rate decision

The Fed will start its July meeting on Tuesday and deliver its rate decision on Wednesday. The decision comes at a difficult time for the US economy. On Thursday, data showed that the number of Americans signing for jobless claims has started to creep up back. That implied that the economic recovery has stalled. Also, recent flash data shows that the economy is struggling.

Analysts polled by Reuters expect the bank will leave interest rates unchanged. Furthermore, another rate cut would see rates turn negative, which would not look good for the US. Analysts will be waiting for more details about other policies the bank may implement.

Other important events in the economic calendar from the US are durable goods orders (Monday), consumer confidence (Tuesday), pending home sales (Wednesday), GDP data (Thursday), and personal income and spending data.

Australia inflation

The Australian dollar rallied this week as investors focused on the impressive economic data from China. Also, Australia seems to be handling the second wave of the virus well. However, the rising tensions between the US and China has tempered this progress.

In the coming week, we will receive important economic data from China and Australia. These numbers will give more colour about their resurgence.

On Monday, the Chinese bureau of statistics will release the country’s industrial profits numbers. Analysts expect that the data will show that companies’ profits continued to grow as the economy returned to growth.

Meanwhile, on Wednesday, the Australian bureau of statistics will release the country’s inflation data followed by building permits on Thursday.

Another important data in the economic calendar is the China Logistics’ manufacturing PMI data that will come out on Friday.

Eurozone GDP data

The euro jumped sharply this week as investors reacted to the recovery fund deal made by EU leaders. Similarly, the upbeat economic data like PMIs also helped to improve sentiment. In the coming week, we will receive more numbers from the European Union. On Thursday, Eurostat will release the first preliminary reading of the bloc’s GDP.

Analysts expect that the economy contracted by 13.9% year on year and by 11.2% QoQ. That will be the biggest contraction in decades. On the same day, the statistics office will release the preliminary CPI data.

Other important numbers in the economic calendar are the bloc’s unemployment rate and industrial and services sentiment that will come out on Thursday. Destatis will also release the preliminary GDP data from Germany.

Other events in the economic calendar

Next week, there will be other events to watch in the economic calendar. On Monday, we will receive household lending and PPI data from Sweden and Mexican trade data. On Tuesday, the Swedish statistics office will release the June retail sales. Meanwhile, on Wednesday we will get the preliminary GDP data from Hong Kong followed by Japanese unemployment rate numbers on Friday.