Your Weekly Fundamental View (17 - 21 July)

Jūlijs 17, 2017 10:30

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Need to Know

The upcoming trading week promises to provide several interesting events. The most important of which is probably the two interest rate decisions which are expected to be announced by the respective central banks in the Eurozone and Japan. Further on the menu are inflation numbers from both Great Britain and Japan and new unemployment data from Australia.

Coming Up

The Australian RBA Meeting Minutes on Tuesday, 18 July

The Reserve Bank of Australia (RBA) will release its meeting minutes from the previous board meeting. The notes indicate how the board members view the current economic performance and future outlook in Australia.

Why should you care? The board members are key players in the future development of the interest rate and broader monetary policy. The meeting minutes will provide more details about the potential direction of this policy based on the board's interpretation of the economic data from Australia.

Inflation Rate in the United Kingdom on Tuesday, 18 July

The inflation rate analyses the price change of goods and services in the UK. The official target of (most) central banks for inflation is 2%.

Why should you care? An increase in the inflation rate close to or above 2% could spark an interest rate hike by the central bank. The rate hike is a monetary policy tool used to stop the inflation rate from increasing too much. The previous inflation rate is 2.9% and the expected rate remains the same(*).

German ZEW Economic Sentiment Index on Tuesday, 18 July

The index is a survey that asks German investors and analysts to rate the economic perspective of Germany in the upcoming 6 months.

Why should you care? Levels above 0 indicate optimism for the economic health of Germany. The previous ZEW economic sentiment index shows a value of 18.6, whereas the current forecast is 17.5(*).

Japanese Balance of Trade, Interest Rate, and Press Conference on Thursday, 20 July

Japan will be in the news on Thursday when it is expected to offer multiple data points. The first one is the balance of trade, which shows the difference between the imports and exports of goods from and to Japan. Later on, the Bank of Japan (BOJ) will provide a monetary policy statement and release its interest rate decision.

Why should you care? The Bank of Japan will provide its outlook on the Japanese economy via its policy statement, outlook report, and press conference. It will also announce its interest rate, which is expected to stay the same at -0.1%(*). The previous balance of trade is -2013.4B Yen and the forecast is 487B Yen(*).

Australian Unemployment Rate on Thursday, 20 July

The unemployment rate indicates the percentage of unemployed looking for work in relationship to the total work force. The figure shows the percentage of the previous month in Australia.

Why should you care? The overall economic health of a country is often dependent on consumer spending and a balanced inflation, which in turn often relies on the job market development. The previous unemployment figure is 5.5% and the current forecast is 5.5%(*).

Eurozone Interest Rate Decision on Thursday, 20 July

The interest rate development shows the state of the overall economy. Lower rates are intended to fuel the economy whereas higher rates are introduced to slow it down. Besides the rate decision there will also be a press conference by the European Central Bank (ECB).

Why should you care? Interest rate decisions have an impact on the demand for a currency in relation to another currency. Both the current and forecasted rates remain at 0%(*).

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Source: Eurozone interest rate decision from 2011 to 2017.

Consumer Confidence Flash on Thursday, 20 July

This survey measures the economic conditions of consumers in the Eurozone countries. It reviews employment, inflation, consumption, and personal finance of about 2,300 consumers.

Why should you care? Confidence levels above 0 indicate general optimism whereas below 0 shows pessimism. The previous figure is -1.3 and the current forecast is -1.05(*).

Inflation Rate in Canada on Friday, 21 July

The inflation rate indicates the change of prices that consumers pay for goods and services. Inflation levels are closely monitored by Central Banks as an indication of interest rate change.

Why should you care? The previous figure is 1.3% and the current forecast is 1.1%(*).

(*) Admiral Markets – Forex Calendar

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