The most important economic events expected this week 13 to 17 July 2020

Monday, July 13, 2020 - 13:45
Point Trader Group
The most important economic events expected this week 13 to 17 July 2020

Central banks played an important role in trying to stabilize financial markets in the wake of the Covid-19 pandemic. Next week, the European Central Bank, the Bank of Japan and the Bank of Canada will announce interest rates. Also, GDP and inflation reports can have an impact on currency movements.

British Finance Minister Rishi Sonak presented a small budget last week. This included a reduction in VAT rates for the hospitality and food sectors and the suspension of the home purchase tax. In addition, the mini-budget created programs to help unemployment amongst young adults.

The Reserve Bank of Australia (RBA) kept interest rates at 0.25%, as they have been linked since March. There has been some speculation that the Reserve Bank of Australia may be under pressure to raise interest rates due to the sharp increase in the exchange rate. However, the bank said in its rate statement that it had no plans to change its accommodative policy.

In Canada, the economy created 952.9K jobs in June, easily outperforming the 700.0K estimate. This strong figure has raised hopes that the economic recovery is getting stronger.

In the US, the services sector showed a strong rebound in June. The ISM Non-Manufacturing PMI jumped to 57.1, up from 45.4 previously. This reading showed a great expansion. Unemployment claims continue to decline, albeit at a slow rate. Last week's reading was 1.31 million, down from 1.42 million. The PPI disappointed in June. The main reading was -0.2%, while the Core Producer Price Index decreased -0.3%.

   Australian Employment Report: Tuesday 4:30. The job market was a disaster in the wake of Covid-19. In May, the economy lost 227.7k jobs, much worse than the 105.0k forecast. Analysts expect a strong recovery in June, with an estimate of 100.0K.

   British GDP: Tuesday, 6:00. The monthly GDP release made headlines last month, with the April issue dropping by a staggering 20.4%, reflecting harsh economic conditions. Analysts expect a recovery in May, with expectations for 5.0%.

   British Inflation: Wednesday, 6:00. UK general inflation started at an inflation rate of 1.8%, but everything has been down since then. In May, inflation slowed to 0.5%, down from previously 0.8%. Another reading of 0.5% is expected in the upcoming release.

   American Inflation: Tuesday, 8:30. Consumer price inflation fell sharply in the aftermath of the Cocfeed-19 pandemic. The CPI fell for three months in a row, but analysts expect a strong recovery in June, with expectations of 0.6%. The core reading is expected to post small gains of 0.1%.

   Bank of Japan Interest Rate Decision: Wednesday, provisional. The Bank of Japan is expected to maintain the current monetary policy. Investors will closely follow the tone of the bank's rate statement.

   Bank of Canada Interest Decision: Wednesday, 10:00. The Bank of Canada is expected to keep interest rates at 0.25%, as they have been linked since March. The Canadian economy is slowly recovering from Covid-19, and investors will look at the price statement to see the bank's view on the economy.

   Chinese GDP: Thursday, 2:00. The Chinese economy shrank by 6.8% in the first quarter, reflecting the devastating impact of the coronavirus epidemic on the world's second largest economy. Expected to be better news in the second quarter with 2.2% appreciation.

   British Employment Report: Thursday, 6:00. Unemployment escalated following the Covid 19 pandemic. In May, unemployment listings fell to 528.9K, down from 856.5K previously. Wage growth fell from 2.4% to 1.0% and is expected to contract by 0.4%. The unemployment rate has hovered at 3.9% for two months in a row. It is expected to rise to 4.1%.

   French Final CPI: Thursday, 6:45. France continues to publish soft inflation numbers. Initial reading is expected to be confirmed at -0.1% in June in the final release.

   American Unemployment Claims: Thursday, 8:30. Unemployment claims continue to decline slowly and the next number is expected at 1.25 million, down from 1.31 million the previous week.

   European Central Bank Interest Rate Decision: Thursday, 11:45 am. The European Central Bank is expected to maintain interest rates at 0.00%. Investors will be very interested in the price statement, given the harsh economic conditions sweeping the euro area.

   Eurozone inflation: Friday, 9:00. In May, the main reading came in. 0.1%, down from 0.3% a month ago. The estimate for June stands at 0.3%. The core reading is expected to come in at 0.8%, after two consecutive readings at 0.9%.


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