The biggest economic indicators of the week
It’s a big week for both the pound and the greenback starting off with an inflation report from the UK followed by the BOE’s interest rate decision later in the week. The USD should see some action around the long awaited FOMC interest rate decision. We could be in for some major central bank divergence as the Bank of England balances an uncertain election result and the Fed looks to move in the opposite direction with raising rates.
Event: UK Consumer Price Index (May)
Date: Tuesday 13 June 2017 at 08:30 GMT
Markets affected: GBP/USD, EUR/GBP
Trending hashtags: #gbp, #cpi
Consumer Price Index the previous month showed inflation in the UK had increased to 2.7%, far above the BOE’s target of 2%. This is the fastest growth it has seen in three and half years. On a month on month basis it grew 0.5%, and compared to last year it increased 2.7% – marginally due to a later Easter holiday. Core CPI which doesn’t take into account more volatile prices like energy and food also rose 2.4% on a year on year basis, an 1.8% rise against the previous month as retailers increased prices to offset a drop in the pound. May’s CPI reading is expected to increase to 2.75% on an annualised basis.
Event: US Retail Sales (May)
Date: Wednesday 14 June 2017 at 12:30 GMT
Markets affected: EUR/USD, GBP/USD
Trending hashtags: #usd, #retail
Retail sales is a closely followed indicator by the Fed so the result around noon on Wednesday may have some impact on the interest rate announcement later in the day. For April Retail Sales increased 0.4% on a monthly basis and the forecast for May is a drop to 0.2% change. Any changes might see some volatility for the USD though many might hold onto their positions waiting for the Fed decision later on.
Event: US CPI (May)
Date: Wednesday 14 June 2017 at 12:30 GMT
Markets affected: EUR/USD, GBP/USD
Trending hashtags: #usd, #cpi
US consumer prices rose 2.2% in April, below the 2.4% recorded in March. Core CPI came in under expectations in April at a 0.1% change on a monthly basis, slowing down to 1.9% – a number that has left some economists concerned. As this important inflation indicator comes on the same day as the Fed decision it may have some impact on their final decision. CPI is expected to increase by 0.3% in May, and Core CPI by 0.2%.
Event: US Fed Interest Rate Decision
Date: Wednesday 14 June 2017 at 18:00 GMT
Markets affected: EUR/USD, GBP/USD
Trending hashtags: #usd, #interestrate
The Federal Reserve (Fed) kept its federal fund’s rate unchanged in the range of 0.75% to 1% during its May 2017 meeting, as per market expectations. Even with weak data for wages, inflation and GDP for the first quarter, many are expecting another hike this time round. A failure to raise rates may send the USD spiraling downwards. Further to the rate announcement, during this statement, the Fed will release their outlooks for inflation, growth, and employment, and for any future rate hikes.
Event: BOE Interest Rate Decision
Date: Thursday 15 June 2017 at 11:00 GMT
Markets affected: GBP/USD, EUR/GBP
Trending hashtags: #gbp, #interestrate
The Bank of England’s (BoE) Monetary Policy Committee kept its Central Bank Rate unchanged at a record low of 0.25% in May. Following the election with the Conservatives failing to gain a majority, and sending the pound to six-week lows, will the BOE make any changes to the interest rate? Overall, Governor Carney is not expected to change the 0.25% rate and to maintain the 453 billion pound bond-buying program.
https://www.fxstreet.com/economic-calendar
http://www.reuters.com/article/us-usa-economy-retail-idUSKBN1881OY
https://www.forexcrunch.com/forex-weekly-outlook-june-12-16-2017/
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