Economic calendar for the week 28.02.2022 – 06.03.2022

Review of the main events of the forex economic calendar for the next trading week (28.02.2022 – 06.03.2022)

This was an extremely volatile and disturbing trading week with sharp movements in the financial market caused by its reaction to a severe aggravation in Russian-Ukrainian relations.

After the announcement by Russian President Vladimir Putin of a special military operation in the Donbass, the demand for defensive assets, including the dollar, has risen sharply. The US dollar index DXY reached yearly highs at 97.73, but by the end of the US session on Friday, the quotes fell to the current level of 96.62.

Immediately after the start of the military operation, the situation with energy prices sharply worsened: the price of oil reached $100, and gas – more than $1,600 per thousand cubic meters. Quotes of gold rose last Thursday to the level of 1974.00 dollars per ounce, but ended the week in negative territory. By the end of the week, the situation on the market calmed down a bit, but investors still preferred the dollar and American assets (despite the extreme volatility, the main US stock indices ended the past week in positive territory).

The most important events of the upcoming week are the publication of a monthly report from the US labor market and the OPEC + meeting, which will make decisions on oil production and supply in the coming months.

Next week, market participants will also pay attention to the publication of important macro statistics from Australia, Switzerland, Germany, the US, China, Canada, the Eurozone, as well as the results of the meetings of the central banks of Australia and Canada on monetary policy issues.

*during the coming week, new events may be added to the calendar and / or some scheduled events may be canceled

**GMT time

Monday, February 28

00:30 AUD Retail sales index

Retail Sales Index is published monthly by the Australian Bureau of Statistics and measures total retail sales. The index is often considered an indicator of consumer confidence and reflects the state of the retail sector in the short term. The growth of the index is usually a positive factor for the AUD; a decrease in the indicator will negatively affect the AUD. The previous value of the index (in December) was -4.4% (after an increase of +7.3% in November, +4.9% in October, +1.3% in September). If the data turns out to be weaker than the previous value, the AUD may drop sharply in the short term, but if it’s above the previous values, the AUD is likely to strengthen. Forecast for January: +0.4%.

08:00 CHF Switzerland GDP for the 4th quarter

GDP is considered an indicator of the general state of a country’s economy that evaluates the rate of its growth or decline. The gross domestic product statement expresses in monetary terms the total value of all final goods and services produced by Switzerland in a given period of time. An upward trend in GDP is considered positive for the national currency (franc), while a low result is considered negative (or bearish).

In the previous 3rd quarter of 2021, GDP grew by +1.7% (+4.1% in annual terms) after growing in the 2nd quarter of 2021 by +1.8% (+7.7% in annual terms). It seems that the situation with the GDP and the economy of Switzerland is recovering after their fall in the first half of 2020, but at a very uneven pace, although this decline cannot be compared with the fall in GDP in Germany, the Eurozone and the United States. In the 4th quarter of 2021, Switzerland’s GDP is forecast to grow by +0.4% (+1.7% in annual terms). The data point to a continued recovery in the Swiss economy, albeit at a slower pace, which is positive for the franc.

If the data turns out to be weaker than the forecast, the franc may decline in the short term. However, one should not expect a strong fall of the franc, since it is in active demand as a defensive asset. Better-than-expected data may strengthen the franc in the short term.

Tuesdday, March 1

01:00 CNY China’s Manufacturing PMI from the China Federation of Logistics & Purchasing (CFLP)

This is an important indicator of the state of the Chinese economy as a whole. A result above 50 is seen as positive and strengthens the CNY, one below 50 as negative for the yuan. Previous values: 50.1 in January, 50.3 in December, 50.1 in November, 49.2 in October, 49.6 in September, 50.1 in August, 51.1 in July and 50.9 in June .

The relative growth of the index and the value of 50 should have a positive effect on the CNY. The data above the value of 50 indicate an increase in activity, which has a positive effect on the quotes of the national currency.

If the value of the indicator is below 50, the yuan will be under pressure and probably will decrease.

01:00 CNY China’s Services PMI from the China Federation of Logistics & Purchasing (CFLP)

This indicator assesses the state of the services sector in the Chinese economy. A result above 50 is considered positive and strengthens the yuan. Previous values: 51.1 in January, 52.7 in December, 52.3 in November, 52.4 in October, 53.2 in September, 55.2 in August, 54.2 in July and 54.4 in June .

Despite the relative decline, the indicator is still above 50, which is likely to have a positive impact on the yuan quotes. Otherwise, and if the value of the indicator is below 50 yuan, it will be under pressure and is likely to decline.

03:30 AUD RBA’s interest rate decision. RBA’s accompanying statement

The main negative factors for the Australian economy are weak wages growth, a weak labor market and a slowdown in growth, while unemployment in the country has remained above the 5% level for many years, unwilling to decline. Now the Australian economy is struggling due to the coronavirus pandemic, which has hit the tourism and transport sectors.

It is expected that at this meeting the Central Bank of Australia will leave the rate at the current level of 0.1%, although unexpected decisions are not ruled out.

In an accompanying statement, the RBA officials will explain the reasons behind the rate decision. If the RBA signals the possibility of easing monetary policy in the near future, the risks of the fall of the Australian dollar will increase. And, on the contrary, tough rhetoric of the RBA’s accompanying statement may provoke the strengthening of the Australian dollar.

07:00 EUR Retail sales in Germany

Retail sales is the main indicator of consumer spending in Germany showing the change in retail sales. A high result strengthens the euro, and vice versa, a low result weakens it. Previous values: -5.5% (0% yoy) in December vs. +0.6% (-2.9% yoy) in November, -0.3% (-2.9% yoy) ) in October, -2.5% (-0.9% yoy) in September 2021.

The data indicate the instability of the recovery of this sector of the German economy, including due to lockdowns due to the coronavirus. Better-than-expected data is likely to have a positive impact on the euro, but only in the short term.

13:00 EUR Harmonized Index of Consumer Price (HICP) in Germany (preliminary release)

This index is published by the EU Statistics Office and is calculated on the basis of a statistical method agreed between all EU countries. It is an indicator for assessing inflation and is used by the Governing Council of the ECB to assess the level of price stability. A positive result strengthens the EUR, a negative result weakens it.

Previous indicator values: +5.1% in January, +5.7% in December, +6.0% in November, +4.6% in October, +4.1% in September, +3.4% in August, +3.1% in July, +2.1% in June, +2.4% in May, +2.1% in April, +2.0% in March, +1.6% in January and February, -0.7% in December and negative values ​​in the second half of 2020 (in annual terms). If the data for February turns out to be better than the previous values, the euro may strengthen in the short term. The growth of the indicator is a positive factor for the euro. The data points to mounting inflationary pressures in Germany. Data worse than the previous value will have a negative impact on the euro. Forecast: +5.4% in February (according to preliminary estimates).

13:30 CAD Canada GDP. Canada GDP Annual Data

Canada’s GDP report is published by Statistics Canada. A strong report will strengthen the CAD. Weak GDP report will have a negative impact on the CAD. The previous report pointed to Canada’s (November) GDP growth of +0.6%.

Canada’s quarterly GDP report reflects the total volume of all goods and services produced by Canada for the quarter (in annual terms), and is considered an indicator of the overall health of the Canadian economy. In the previous 3rd quarter of 2021, GDP grew by +5.4% (after a decrease of -1.1% in the 2nd quarter, an increase of +5.6% in the 1st quarter of 2021). If the data for the 4th quarter of 2021 turns out to be stronger than the previous value, the CAD will strengthen.

15:00 USD Manufacturing PMI (from ISM)

The US Manufacturing PMI published by the Institute for Supply Management (ISM) is an important indicator of the state of the US economy as a whole. A result above 50 is considered positive and strengthens the USD, while one below 50 is considered negative for the US dollar. Forecast: 57.9 in February (against 57.6 in January, 58.7 in December, 61.1 in November, 60.8 in October, 61.1 in September, 59.9 in August, 59.5 in July , 60.6 in June, 61.2 in May, 60.7 in April, 64.7 in March, 60.8 in February 58.7 in January 2021). The index is above the 50 level and has a relatively high value, which is likely to support the dollar. The data above the value of 50 indicate an acceleration of activity, which has a positive effect on the quotes of the national currency. If the indicator falls below the forecast and especially below the value of 50, the dollar may sharply weaken in the short term. The relative decline of the indicator is also not very positive for the USD.

Wednesday, March 2

00:30 AUD Australia GDP (4th quarter)

Australian Bureau of Statistics provides s report on the country’s GDP, which is the main indicator of the state of the Australian economy, for the 4th quarter. A strong report will strengthen the AUD. A weak GDP report will have a negative impact on the AUD. Forecast: +0.5% (+4.8% YoY) against -1.9% in Q3, +0.7% in Q2, +1.8% in Q1 2021. The growth of the indicator is a positive factor for the AUD, the decline is negative. If the data turns out to be worse than the forecast, the AUD may decrease.

10:00 EUR Consumer Price Index. Core CPI (preliminary release)

Consumer Price Index (CPI) is published by Eurostat and measures the change in prices of a selected basket of goods and services over a given period. The index is a key indicator for assessing inflation and changing consumer preferences. A positive result strengthens the EUR, a negative result weakens it.

Forecast for February 2022: +5.3% (annualized) against +5.1% (annualized) in January, +5.0% (annualized) in December. If the data turns out to be worse than the forecast, the euro may sharply decline in the short term. Data better than the forecast and / or the previous value may strengthen the euro in the short term. The target level of consumer inflation of the ECB is slightly below 2.0%, and the data indicate an acceleration of inflation in the Eurozone.

Core Consumer Price Index (Core CPI) determines the change in prices of a selected basket of goods and services over a given period and is a key indicator for assessing inflation and changing consumer preferences. Food and energy are excluded from this indicator for a more accurate estimate. A high result strengthens the EUR, while a low result weakens it. In December 2021, Core CPI increased by +2.6% (in annual terms), and in January – by +2.3%. If the data for February 2022 turns out to be worse than the previous value or forecast, this may negatively affect the euro. If the data turns out to be better than the forecast or the previous value, the euro is likely to react with an increase in quotations. Core inflation in the Eurozone is accelerating, and this is a positive factor for the euro. February forecast: +2.5%.

13:15 USD ADP National Employment Report

Usually, the ADP report on the level of employment in the private sector has a strong impact on the market and dollar quotes. An increase in the value of this indicator has a positive effect on the dollar. The US private sector employment growth is expected to be +320,000 in February (against -301,000 in January 2022, up 807,000 in December, 534,000 in November, 571,000 in October, 568,000 in September, 374,000 in August, 330,000 in July, 692,000 in June, 978,000 in May, 742,000 in April, 517,000 in March, 117,000 in February, 174,000 in January 2021). The relative growth of the indicator may have a positive impact on the dollar quotes, and the relative decline of the indicator will affect them negatively. The market reaction may be negative, and the dollar may decline if the data also turns out to be worse than the forecast.

Millions of Americans have previously been laid off due to the coronavirus pandemic and related quarantine measures. Most of the layoffs were concentrated in the tourism and retail sectors. Other important sectors of the economy also suffered. The ADP previously reported that the most significant drop in employment was recently noted in the construction sector and the financial services sector.

Although the ADP report does not have a direct correlation with the US Department of Labor official data on the labor market, which will be published on Friday, the ADP report is often its harbinger, having a noticeable impact on the market.

15:00 USD The Fed Chairman Jerome Powell’s speech in Congress

Powell’s comments could affect both short-term and long-term USD trading. A more hawkish stance on the Fed’s monetary policy is seen as positive and strengthens the US dollar, while a more cautious stance is seen as negative for the USD. Investors want to hear Powell’s opinion on the Fed’s plans for this year. Any hints from Powell about the possibility of changing the current monetary policy will cause an increase in volatility in dollar quotes and on the US stock market.

15:00 CAD Bank of Canada’s interest rate decision. Bank of Canada’s accompanying statement

The Bank of Canada will decide on the interest rate. In March 2020, the bank cut the rate 3 times, bringing it to the level of 0.25%, to mitigate the economic damage from the novel coronavirus pandemic.

In the accompanying statement, Canada’s central bank said the “decision is aimed at supporting the financial system, which plays a central role in lending to the economy, as well as laying the foundation that will allow the economy to return to normal.” The central bank’s press release also said that the spread of the coronavirus and the sharp drop in global oil prices are collectively putting severe pressure on Canadians and the Canadian economy.

In fact, quantitative easing and a significant reduction in the interest rate should contribute to the weakening of the national currency.

According to data released by the National Bureau of Statistics, Canada’s GDP in the 2nd quarter decreased by -3.2% (year-on-year), while economists had forecast its growth by 2.5%. The data for the 3rd quarter turned out to be much better: the annual GDP growth amounted to +5.4% (against the forecast of +3.0%). However, many economists have downgraded their 2021 growth forecast for the Canadian economy. The final data for the 4th quarter will be presented in March.

The negative effects of the coronavirus on the Canadian economy and the country’s labor market, as well as the weakness of the housing market, still put pressure on the Bank of Canada to maintain an easy monetary policy. However, the Bank of Canada is expected to raise interest rates by 0.25% to 0.50% at its meeting on Wednesday.

Tough tone of the Bank of Canada’s accompanying statement regarding rising inflation and prospects for further tightening of monetary policy will cause the strengthening of the Canadian dollar. If the Bank of Canada signals the need for loose monetary policy, the Canadian currency will decline.

Thursday, March 3

00:30 AUD Balance of trade

The indicator (balance of trade) evaluates the ratio between exports and imports. The growth of exports from Australia leads to an increase in the trade surplus, which has a positive impact on the AUD. Previous values: ​​8.356 billion Australian dollars (for December), 9.423 billion Australian dollars (for November), 11.220 billion Australian dollars (for October), 12.243 billion Australian dollars (for September), 15.077 billion Australian dollars (for August). A decrease in the trade surplus may have a negative impact on the Australian dollar. Conversely, a growing trade surplus is positive for the AUD.

15:00 USD The Fed Chairman Jerome Powell’s speech in Congress

Powell’s comments could affect both short-term and long-term USD trading. A more hawkish stance on the Fed’s monetary policy is seen as positive and strengthens the US dollar, while a more cautious stance is seen as negative for the USD. Investors want to hear Powell’s opinion on the Fed’s plans for this year. Any hints from Powell about the possibility of changing the current monetary policy will cause an increase in volatility in dollar quotes and on the US stock market.

15:00 USD Services PMI (from ISM)

This indicator assesses the state of the services sector in the US economy. These services sectors (unlike the manufacturing sector) have virtually no impact on the country’s GDP.

A result above 50 is seen as positive for the USD. February forecast: 60.5 (after 59.9 in January, 62.0 in December), which is likely to have a generally positive impact on the USD. However, a deeper relative decline in the index, and especially below the value of 50, may negatively affect the dollar in the short term.

16:30 CAD Speech by head of the Bank of Canada

In his speech, the head of the Bank of Canada Tiff Macklem will explain the bank’s position and assess the current economic situation in the country. If the tone of his speech is tough on the monetary policy of the Bank of Canada, the Canadian dollar will strengthen in the foreign exchange market. If Macklem favors maintaining loose monetary policy, the Canadian currency will fall. In any case, high volatility in the CAD quotes is expected during his speech.

Friday, March 4

10:00 EUR Retail sales in the Eurozone

Retail sales is the main indicator of consumer spending showing the change in retail sales. A high result strengthens the euro, and vice versa, a low result weakens it. Forecast for January: +1.5% (+9.5% yoy) vs. -3.0% (+2.0% yoy) in December, +1.0% (+7.8% yoy) in November, +0.2% (+1.4% yoy) in October. The data suggests that, despite rising indices, retail sales have not yet reached pre-coronavirus levels after a sharp drop in March-April 2020, when tight quarantine measures were in place in Europe. However, better-than-expected data is likely to have a positive impact on the euro.

13:30 USD Average hourly wage. Non-farm payrolls. Unemployment rate

These are most important indicators of the state of the labor market in the US in February. Forecast: +0.6% (against +0.7% in January 2022, +0.6% in December, +0.3% in November, +0.4% in October, +0.6% in September and August 2021) / +0.438 million (against +0.467 million in January 2022, +0.199 million in December, +0.210 million in November, +0.531 million in October, +0.194 million in September, +0.235 million in August 2021 ) / 3.9% (against 4.0% in January 2022, 3.9% in December, 4.2% in November, 4.6% in October, 4.8% in September, 5.2% in August 2021), respectively.

In general, the figures can be described as encouraging. The data shows continued improvement in the US labor market after its precipitous fall in the first half of 2020. Before the pandemic, the US labor market remained strong, indicating the stability of the US economy and supporting the dollar quotes.

Predicting the market reaction to the publication of indicators is often difficult, because many indicators for previous periods are subject to revision. Now it will be even more difficult to do this, because the economic situation in the US and many other major economies remains controversial due to the coronavirus. In any case, when the data from the US labor market is published, a surge in volatility is expected in trading not only in USD, but throughout the financial market. The most cautious investors might prefer to stay out of the market during this period of time.

 

 

Price chart of EURUSD in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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