Your weekly fundamental view (Sept 12-16)

Septembris 12, 2016 16:06

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Need to know

This week's main focus is US retails sales, plus the GBP official bank rate and monetary policy summary decision. The US retail sales data is scheduled for Thursday. Bank of England will meet same day to release a statement on how they will achieve their inflation targets and official cash rate, as well as their monetary policy's effects since the last statement's release.

Coming up

Chinese industrial production is released on Tuesday, 13 September. Industrial production represents the change in the total inflation-adjusted value of output produced by manufacturers, mines and utilities. Why should traders care? Chinese data has a strong impact on equities and the Australian dollar. Chinese impact on the world's economy is very strong.

German ZEW economic sentiment is released on Tuesday, 13 September. This is a survey of about 275 German institutional investors, who give their six-month outlook for Germany's economy. Any figure above 0.0 is optimistic, while below it indicates pessimism. Why should traders care? The price of petroleum products influences inflation, which impacts oil-dependent industries.

GBP average earnings and claimant count change, are out Wednesday 14 September. Average earnings data is the overall change in the price businesses and the government pay for labour with all bonuses included, while claimant count change represents the number of people claiming unemployment-related benefits during the previous month. Why should traders care? Both reports are released at the same time on Wednesday. Average earnings is a leading indicator of consumer inflation as when businesses pay more for labour, the higher costs are usually passed on to the consumer. Claimant count data is good if the actual result is below the forecast, as it is the earliest indication of the employment situation.

NZD GDP data will be released on Thursday, 15 September. This report is released quarterly and represents the broadest measure of economic activity in New Zealand. If the report proves better than expected, it will be good for the currency. Why should traders care? GDP data is the main gauge of the economy's health.

GBP official bank rate decision comes on Thursday, 15 September. The rate decision is usually priced in the market, so it tends to be overshadowed by the Monetary Policy Summary that happens simultaneously. Why should traders care? The report contains the outcome of their vote on interest rates and other policy measures, along with commentary about the economic conditions that influenced their votes. Additionally, it discusses the economic outlook and offers clues on the outcome of future votes.

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US Retail sales will be released on Thursday, 15 September. US is a consumer economy. This report is very important for clues related to GDP growth and inflation. Why should traders care? US retail sales are also important for stock markets and right now, stock markets are very volatile. US retail sales are the earliest and broadest look at vital consumer spending data.

US Inflation rate CPI and Core CPI are released on Friday, 16 September. Inflation is important to currency valuation, because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. Why should traders care? The Federal Open Market Committee and traders usually pays more attention to the core data. If the actual report comes better than the forecast, it will be good for currency.