What is the Market Outlook this week?

Welcome to the EasyMarkets weekly outlook starting this Monday July 17. We’ll be looking at the week’s key economic events on the financial calendar covering Monday to Thursday. The week kicks off with major economic data out of China and then key inflation data from Europe, New Zealand and the United Kingdom. We wrap up the week with interest rate decisions from Japan and the Eurozone.

Event: China Gross Domestic Product (Q2)

Date: Monday 17 July 2017 at 02:00 GMT

Markets affected: CNY /USD

Trending hashtags: #cny, #gdp

The world’s second largest economy releases key economic data on Monday morning. China’s GDP for the previous quarter was at a low 6.9% on an annualised basis – low for the largest exporting nation but still above all other developed economies. For this quarter analysts are expecting a slowdown to 6.8% as the nation struggles with personal debt levels. If GDP comes in better than expected, then stocks and global commodity prices may gain. A lower drop of GDP may negatively impact the yuan which has seen a 2% increase against the USD this year.

Event: EU Consumer Price Index (June)

Date: Monday 17 July 2017 at 09:00 GMT

Markets affected: EUR /USD, EUR/GBP

Trending hashtags: #eur, #cpi

CPI for June on an annualised basis is due out early next week for the Eurozone. This key inflation statistic is closely monitored by the European Central Bank and traders alike as it is a key indicator for policy makers. Last month CPI was 1.3% with Core CPI at 1.2% on an annualised basis. Markets are not expecting much change for June so any divergence may see some volatility for the common currency.

Event: NZ Consumer Price Index

Date: Monday 17 July 2017 at 22:45 GMT

Markets affected: NZD /USD, AUD/NZD

Trending hashtags: #nzd, #cpi

New Zealand’s consumer prices index for the second quarter of the year is due out Monday night. On a quarterly basis the previous reading was 1% and on an annualised basis 2.2%. The NZ dollar has been falling against its Australian counterpart as prices for iron ore improve. Analysts are putting the drop down to anticipation of the upcoming CPI releases – Australia’s CPI is due a week later. The central banks of both nations will be closely following the inflation data as both are currently holding their interest rates steady under mild inflation rates.

Event: UK Consumer Price Index

Date: Tuesday 18 July 2017 at 08:30 GMT

Markets affected: GBP/USD, EUR/GBP

Trending hashtags: #gbp, #cpi

On Tuesday, we continue with our trifecta of CPI releases, this one coming from Great Britain. Inflation is already much higher than monetary policy officials are comfortable with at 2.9%. An increase may push the Bank of England into an interest rate hike. Following closely this release will be the UK’s inflation report on Wednesday 20 July which may give even more hints to rate hikes or holds.

Event: BoJ Interest Rate Decision

Date: Thursday 20 July 2017 at 02:00 GMT

Markets affected: USD/JPY

Trending hashtags: #yen, #jpy

The Bank of Japan has been keeping the interest rate at super low levels at negative 0.1%. With the Fed and Bank of Canada on an interest rate hike cycle, Japan stands in contrast to many of the other large economies that are looking to raise rates.

Event: ECB Interest Rate Decision

Date: Thursday 20 July 2017 at 12:30 GMT

Markets affected: EUR /USD, EUR/GBP

Trending hashtags: #eur, #interestrate

Later on the same day, we get the interest rate decision from the European Central Bank. The current rate of 0% is not expected to change though as other central banks look to increase rates, the ECB may need to consider the consequences of lagging behind its global counterparts.

References:

Dollar Loses Ground Against Aussie