News Announcements & Chart Analysis by PlexyTrade

[MiloPlexyTrade]

News Announcements & Chart Analysis by PlexyTrade​

On July 10th, New Zealand will announce its Official Cash Rate. This chart from the previous announcement on May 22nd illustrates the NZD/USD pair's reaction over a 5-minute candlestick, providing valuable insights to anticipate tomorrow's market movements.

 

[MiloPlexyTrade]

The U.S. is set to release its Unemployment Claims on July 11th; the chart below illustrates the EUR/USD's response in 5-minute candlesticks to the July 3rd announcement.

On July 11, the US will publish its Core CPI m/m data, along with a chart showing EURUSD movements in five-minute intervals from the previous release on June 12.

On July 11, the US will publish its Core CPI m/m data, along with a chart showing EURUSD movements in five-minute intervals from the previous release on June 12.

On July 11th, the U.S. will release its year-over-year CPI figures. Below is a 5-minute timeframe chart of EUR/USD from the previous announcement.

On July 11, Great Britain will release its GDP m/m; below is the GBP/JPY 5-minute candlestick chart from the previous release on June 12.

 

[MiloPlexyTrade]

On July 15th, the U.S. will release the Empire State Manufacturing Index; the chart shows USDJPY's movements on June 17th in 5-minute candlesticks.

 

[MiloPlexyTrade]

16th July 2024

Tuesday

​

On July 16th, several key economic indicators will be released globally, potentially influencing financial markets. Germany will publish its ZEW Economic Sentiment Index, reflecting the economic outlook. Canada's inflation data will be essential for assessing its economic climate and potential interest rate adjustments. In the U.S., the monthly retail and core retail sales figures will offer insights into consumer spending and broader economic activities, impacting domestic and international policies. Meanwhile, New Zealand will report its quarterly Consumer Price Index, further shaping global market sentiments and economic directions.

EUR - German ZEW Economic Sentiment​

The German ZEW Economic Sentiment Index is a diffusion index based on a survey of approximately 300 German institutional investors and analysts. This index is a leading indicator of the nation's economic health, capturing the economic outlook for the next six months. Participants in the survey are well-informed individuals whose shifts in sentiment can serve as early signals of future economic activity. Typically, a reading above 0.0 signifies optimism, while a value below 0.0 indicates pessimism. For the currency markets, an 'Actual' index value that exceeds the 'Forecast' suggests a positive outcome for the currency.

In a notable development, the ZEW Indicator of Economic Sentiment for Germany reached a peak of 47.5 in June 2024, marking its highest level since February 2022. This figure rose slightly from 47.1 in May, though it fell short of the anticipated 50. Simultaneously, the assessment of current conditions witnessed a decline, with the sub index worsening to -73.8 from -72.3, a miss against the expected -65. This twin dynamic highlights a continuing stagnation in economic expectations and the real-time economic situation within Germany. Moreover, inflation expectations among respondents have edged up, likely driven by inflation rates in May that surpassed forecasts, further complicating the economic outlook.

The ZEW German Sentiment Index is forecasted to be 44.3, down from the previous figure of 47.5.

The next German ZEW Economic Sentiment survey is scheduled for Tuesday at 9:00 AM GMT.

CAD – CPI y/y​

The Consumer Price Index Core, released monthly by the Bank of Canada, tracks changes in the cost of a fixed basket of goods and services for Canadian consumers, providing a measure of underlying inflation. It strategically excludes eight volatile components: fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation, and tobacco products to achieve this. This index's Year-over-Year (YoY) reading compares the current month's prices to those from the same month in the previous year. Generally, a higher reading suggests a bullish outlook for the Canadian Dollar (CAD), whereas a lower reading implies a bearish perspective.

Canada's inflation rate for May 2024 climbed to 2.9%, up from 2.7% in April, contradicting forecasts that expected a decline to 2.6%. This unexpected rise put a pause on the anticipated easing of monetary policy by the Bank of Canada, which had predicted inflation would stay near 3% in the first half of the year. Notable increases were seen in transportation costs, which jumped to 3.5% due in part to a 4.5% rise in air transportation prices. Food prices also ticked up to 2.5% from 2.4%, with grocery costs climbing slightly. Additionally, health and personal care inflation rose sharply to 3.6%, while the decrease in prices for household operations, furnishings, and equipment slowed. Meanwhile, shelter costs remained high but stable at 6.4%. Overall, the Canadian Consumer Price Index (CPI) increased by 0.6% from the previous month.

The year-on-year CPI forecast shows no change, staying at the previous outcome of 2.9%.

CAD - CPI m/m​

The Consumer Price Index (CPI) month-over-month measure tracks changes in the prices of goods and services purchased by consumers. A higher-than-forecasted CPI reading is generally positive for the currency, as consumer prices contribute significantly to overall inflation. Inflation is a crucial factor for currency valuation because rising prices typically prompt central banks to increase interest rates to control inflation. This index is derived by sampling the average prices of various goods and services and comparing them to previous data, providing a clear snapshot of inflation trends. Consequently, CPI data is closely monitored by traders and economists alike.

In May 2024, Canada experienced a notable uptick in inflation, with the Consumer Price Index (CPI) rising by 0.6% from the previous month. This increase, which exceeded analysts' expectations of a modest 0.3% rise, follows a 0.5% increase in April. A significant contributor to this inflationary pressure was the rising cost of travel tours, which played a central role in pushing the index higher than anticipated. This trend indicates a marked shift in consumer spending patterns, particularly in the travel sector, as the summer season begins.

The projected month-over-month Consumer Price Index (CPI) is expected to be 0.2%, down from the previous figure of 0.6%.

CAD - Median CPI y/y​

The median CPI year-over-year measures the change in the median price of goods and services purchased by consumers. Typically, if the actual value is greater than the forecast, it is favorable for the currency. This is because consumer prices account for a significant portion of overall inflation, which is crucial for currency valuation. Rising prices often prompt the central bank to raise interest rates to contain inflation. The median CPI is derived by sampling the average price of various goods and services and comparing it to previous samples.

In May 2024, Canada experienced an unexpected acceleration in the Median Consumer Price Index (CPI), as it increased to 2.8% year-over-year from 2.6% in April, according to the latest data from Statistics Canada. This rise in the CPI-median, one of the Bank of Canada’s favored gauges for assessing underlying inflation trends, surpassed the market projections that had anticipated the rate would hold steady at 2.6%. This unexpected increase indicates a shift in inflation dynamics and could influence future monetary policy decisions, particularly impacting the likelihood of an interest rate cut which had been considered possible by financial markets.

The year-over-year forecast for Median CPI is anticipated to be 2.8%, unchanged from the previous result of 2.8%.

CAD – Trimmed CPI y/y​

The Trimmed CPI year-over-year measures the change in the price of goods and services purchased by consumers, excluding the most volatile 40% of items. When the 'Actual' figure exceeds the 'Forecast', it is considered positive for the currency. This metric is crucial for traders because consumer prices constitute the majority of overall inflation. Rising prices often prompt central banks to raise interest rates to contain inflation, directly impacting currency valuation. The Trimmed CPI is derived by sampling the average prices of various goods and services and comparing them to previous samples.

In May 2024, Canada's trimmed-mean core inflation rate, a critical indicator used by the Bank of Canada for shaping monetary policy, registered a 2.9% increase, surpassing the anticipated 2.8% forecast by analysts. This rise comes after a consistent 2.8% increase in the previous month, signaling a slight but notable acceleration in underlying inflation trends. The Bank of Canada closely monitors this measure to make informed decisions regarding interest rates and other monetary policies, aiming to manage economic stability and growth. This uptick could influence future monetary policy decisions as the central bank assesses the ongoing economic landscape.

The annual forecast for Trimmed CPI is projected to be 2.9%, consistent with the previous rate of 2.9%.

The next CPI release from Canada is scheduled for Tuesday at 12:30 PM GMT.

USD - Core Retail Sales m/m​

The Core Retail Sales month-over-month measure, which tracks changes in the total value of sales at the retail level excluding automobiles, is a key economic indicator. It is considered more reliable than the overall Retail Sales data because automobile sales, which make up about 20% of retail sales, are highly volatile and can distort underlying trends. An 'actual' figure that exceeds the forecast is typically viewed as positive for the currency, reflecting stronger consumer spending trends.

Core retail sales in the United States, excluding motor vehicles and parts, decreased by 0.1% month-on-month in May, according to the Commerce Department. This decline follows a downwardly revised 0.1% drop in April and is lower than market expectations of a 0.2% increase. The slowdown in core retail sales highlights the ongoing impact of high interest rates and inflation on consumer spending, raising concerns among economists about the potential for a significant economic slowdown. Despite this monthly decrease, core retail sales are up by 2.5% on a yearly basis.

The forecast for Core Retail Sales month-over-month shows a slight increase, projected at 0.1% compared to the previous decline of -0.1%.

USD - Retail Sales m/m​

The monthly Retail Sales report, which measures the change in the total value of sales at the retail level, has significant implications for the economy. Typically, an 'Actual' figure that exceeds the 'Forecast' is seen as positive for the currency. This metric is closely monitored because it serves as the primary gauge of consumer spending, which constitutes the majority of overall economic activity. Often referred to as Advance Retail Sales, this report is crucial for understanding economic trends and consumer behavior.

Retail sales in the US increased by 0.1% in May 2024, falling short of economists' expectations of a 0.3% rise, as high interest rates and inflation continued to impact consumer spending. This follows a revised 0.2% decline in April. Excluding autos and gas, sales also rose 0.1%, below the anticipated 0.4% increase but better than April's 0.3% drop. Gasoline stations experienced the steepest decline, with sales dropping 2.2%, while furniture and home stores saw a 1.1% decrease. Conversely, sporting goods and hobby stores reported a 2.8% increase, leading the gains. The Federal Reserve's recent economic projections indicate a potential interest rate cut this year, raising concerns about a possible economic slowdown due to prolonged high rates. Overall, consumer sentiment appears to be cooling, with modest increases seen in sectors like clothing, motor vehicles, and non store retailers.

The forecast for month-over-month Retail Sales shows an expected increase of 0.1%, unchanged from the previous figure of 0.1%.

The upcoming release for Core Retail Sales month-over-month (m/m) and Retail Sales month-over-month (m/m) is scheduled for Tuesday at 12:30 PM GMT.

NZD - CPI q/q​

The Consumer Price Index (CPI) measures the quarterly change in the prices of goods and services purchased by consumers. Typically, a CPI figure higher than the forecast is positive for the currency. Although this data is released later than similar inflation metrics from other countries, it is a key indicator of consumer prices and often significantly impacts the market. Traders closely monitor CPI because consumer prices constitute a major portion of overall inflation, which influences central banks' decisions on interest rates in line with their mandate to control inflation. The CPI is derived by sampling the average prices of various goods and services and comparing them to previous samples.

New Zealand's quarterly inflation rate witnessed a modest increase in March 2024, rising to 0.6 % from 0.5 % in the preceding period, as reported by Statistics NZ. Despite this uptick, the annual inflation rate saw a decline to 4 % in March from 4.7 % in December, although housing-related costs such as rents, construction, and council rates continued to climb, with housing and household utility costs rising by 0.7 %. These figures, while showing a slight quarter-on-quarter increase, still remain above the Reserve Bank of New Zealand's target range of 1 to 3 %, underscoring ongoing inflationary pressures within the economy. The rise in quarterly inflation was driven by various factors including increases in housing and household utility costs, while recreation and culture rose by 2.4 %, and alcohol and tobacco also contributed significantly to the annual inflation rate, with alcoholic beverages up by 5 % and cigarettes and tobacco up by 10.4 %. The persistently high levels of non-tradable inflation, primarily driven by domestic factors like housing costs and tobacco prices, suggest a cautious stance from the Reserve Bank, with rate cuts not anticipated in the near term according to economists.
The upcoming release for New Zealand's quarter-over-quarter CPI is scheduled for Tuesday at 10:45 PM GMT.

The forecast for the quarterly Consumer Price Index (CPI) is projected to remain at 0.6%, unchanged from the previous reading.

 

[MiloPlexyTrade]

26th July 2024

Friday​

On July 26th, the United States is set to release two significant economic indicators that are expected to influence market dynamics considerably. The Core PCE Price Index, a key measure of inflation excluding food and energy costs, will be released on a month-over-month basis. This index is closely monitored by market analysts and policymakers due to its high impact on financial markets. Additionally, the Revised University of Michigan (UoM) Consumer Sentiment Index will be updated, providing insights into consumer attitudes and spending behaviors. This index, which is considered to have a medium impact on the market, serves as a valuable tool for forecasting economic trends and consumer confidence levels.

USD - Core PCE Price Index m/m (High Impact)​

The Core PCE Price Index, excluding food and energy, is the Federal Reserve's main measure of inflation. An increase above forecasts typically strengthens the currency as it prompts the Fed to raise interest rates to control inflation, affecting economic and currency stability. This index is crucial for traders monitoring potential shifts in monetary policy.


Inflationary pressures in the United States showed signs of easing in May 2024. The core Personal Consumption Expenditures (PCE) index, closely monitored by the Fed, rose by just 0.1% from the previous month, matching expectations and marking the slowest monthly increase since March 2021. On an annual basis, core PCE inflation also moderated to 2.6% in May, down slightly from 2.8% in the previous period and representing the slowest annual gain in over three years. The report follows a trend of promising inflation readings for May, including a subdued increase in the Consumer Price Index (CPI). Despite these developments, Federal Reserve officials remain cautious about the trajectory of inflation, emphasizing the need for sustained positive data before considering any adjustments to monetary policy. Fed Chair Jerome Powell underscored this sentiment, stating that while there has been some progress towards their inflation target, further favorable data is necessary to build confidence in a sustainable path towards their objectives.


The monthly Core PCE Price Index is projected to increase to 0.2%, up from the prior 0.1% figure.


The upcoming monthly release of the Core PCE Price Index is scheduled for Friday at 12:30 PM GMT.

USD - Revised UoM Consumer Sentiment (Medium Impact)​

The Revised University of Michigan Consumer Sentiment Index, derived from a survey of approximately 500 consumers who assess current and future economic conditions, measures the level of a composite index based on consumer perceptions. An 'Actual' reading that exceeds the 'Forecast' is typically positive for the currency because financial confidence serves as a leading indicator of consumer spending, which constitutes a majority of overall economic activity.


Consumer sentiment in the U.S. continued its downward trend in July, hitting its lowest point since November. The University of Michigan's consumer sentiment index fell for the fourth consecutive month, dropping to 66 from 68.2 in June, and falling short of the forecasted 68.5. Persistent worries about high prices and economic uncertainty, coupled with the upcoming election, are weighing heavily on consumers. The index for current conditions decreased to 64.1 from 65.9, while the expectations component dropped to 67.2 from 69.6. Additionally, short-term and long-term inflation expectations both eased slightly, now at 2.9% compared to 3% previously.


The Revised University of Michigan Consumer Sentiment Index is forecasted to rise slightly to 66.3, up from the previous reading of 66.0.


The revised University of Michigan Consumer Sentiment index is scheduled for release on Friday at 2:00 PM GMT.

 

[MiloPlexyTrade]

30th July 2024

Tuesday​

On July 30th, significant economic data releases are anticipated from both Europe and the United States. Germany is set to publish its Preliminary Consumer Price Index (CPI) month-over-month figures, offering insights into the country's inflation trends. Simultaneously, the United States will release its Conference Board (CB) Consumer Confidence report and the Job Openings and Labor Turnover Survey (JOLTS), providing valuable indicators of consumer sentiment and labor market conditions. Additionally, the Eurozone will release its GDP Growth Rate quarter-over-quarter (q/q) and year-over-year (y/y), which will have a medium impact on the market. These reports are expected to influence market movements and economic outlooks on both sides of the Atlantic.

​

EUR – Eurozone GDP Growth Rate q/q (Medium Impact)​

Eurostat's quarterly release of the Gross Domestic Product (GDP) figures offers a critical snapshot of the Eurozone's economic health by measuring the total value of all goods and services produced within the region. This indicator, among the most vital for assessing economic performance, compares the economic activity of the reference quarter to that of the previous quarter (QoQ). A rise in the GDP reading is typically seen as bullish for the Euro (EUR), signaling economic growth, while a decline is interpreted as bearish, indicating economic contraction.


In the first quarter of 2024, the Euro Area's Gross Domestic Product (GDP) expanded by 0.3% compared to the previous quarter, according to Eurostat. This growth rate, while modest, falls below the long-term average of 0.37% recorded from 1995 to 2024. Historically, the Eurozone experienced its highest GDP growth rate of 11.70% in the third quarter of 2020, followed by a record low of -11.10% in the second quarter of 2020, reflecting the significant economic volatility during the COVID-19 pandemic.


The quarter-on-quarter GDP growth rate is forecasted to increase by 0.3%, which is the same as the previous quarter's growth rate of 0.3%.

EUR – Eurozone GDP Growth Rate y/y (Medium Impact)​

Eurostat's latest quarterly release of the Gross Domestic Product (GDP) for the Eurozone reveals critical insights into the region's economic health. The GDP, a comprehensive measure of the total value of all goods and services produced, is closely monitored as one of the most significant economic indicators. The year-over-year (YoY) GDP growth rate, which compares economic activity in the reference quarter with the same quarter from the previous year, serves as a key barometer for economic performance. An increase in this rate generally signals a bullish outlook for the Euro (EUR), while a lower reading is typically viewed as bearish. This data, therefore, plays a crucial role in shaping market expectations and economic strategies across the Eurozone.


In the first quarter of 2024, the Gross Domestic Product (GDP) in the Euro Area expanded by 0.4% compared to the same quarter of the previous year. Historically, the GDP annual growth rate in the Euro Area averaged 1.59% from 1995 to 2024. This period saw a peak growth rate of 14.90% in the second quarter of 2021, while the lowest recorded rate was -14.10% in the second quarter of 2020.


The year-over-year GDP growth rate is projected to be 0.6%, up from the previous rate of 0.4%.


The upcoming GDP growth rates, both quarter-over-quarter and year-over-year, are scheduled for release on Tuesday at 9:00 AM GMT.

EUR - German Prelim CPI m/m (High Impact)​

The German Preliminary CPI m/m measures the change in consumer prices for goods and services. A higher-than-forecasted CPI is typically beneficial for the currency, as consumer prices constitute the bulk of overall inflation. Inflation is critical for currency valuation because rising prices often lead the central bank to increase interest rates to manage inflation.


In June 2024, Germany's Consumer Price Index (CPI) rose by 0.1% month-over-month, mirroring May's increase and falling slightly below the forecasted 0.2%, according to preliminary estimates from the Federal Statistical Office (Destatis). The annual CPI inflation rate decreased to 2.2% in June from 2.4% in May, which was also below the forecast of 2.3%. This reduction was attributed to a decline in goods inflation (0.8% vs. 1%) and a notable drop in energy costs (-2.1% vs. -1.1%), despite a faster increase in food prices (1.1% vs. 0.6%). Services inflation remained steady at 3.9%, while core inflation, excluding food and energy, eased to 2.9%, the lowest since February 2022, down from 3% in the previous two months. On a monthly basis, the CPI edged up by 0.1%, consistent with May's increase and below the forecasted 0.2%. The EU-harmonised CPI annual rate declined to 2.5% from 2.8%, below the forecasted 2.6%, while the monthly rate rose by 0.2%, as expected.


The forecast for the German Preliminary CPI month-over-month is 0.3%, up from the previous 0.1%.


The German Preliminary CPI month-over-month is set to be released on Tuesday at 12:00 PM GMT.

USD - CB Consumer Confidence (High Impact)​

The CB Consumer Confidence Measures reflect the level of a composite index based on surveyed households. The usual effect is that if the 'Actual' measure is greater than the 'Forecast,' it is positive for the currency. Traders care because financial confidence is a leading indicator of consumer spending, which constitutes a majority of overall economic activity. This measure is derived from a survey of approximately 3,000 households, asking respondents to evaluate the current and future economic conditions, including labor availability, business conditions, and the overall economic situation.


The Conference Board Consumer Confidence Index dipped to 100.4 in June from 101.3 in May, indicating a slight decline in consumer confidence. While the Present Situation Index saw a marginal increase to 141.5 from 140.8, reflecting improved labor market conditions, the Expectations Index fell to 73.0 from 74.9, remaining below the recession-indicating threshold of 80 for the fifth consecutive month. Consumers aged 35-54 showed a decline in confidence, whereas those under 35 and over 55 experienced an increase. Despite a slight reduction in inflation expectations and mixed sentiments regarding future business and labor conditions, the overall confidence remains fragile, with concerns about family finances and potential recession impacts persisting. Consumers were more optimistic about the stock market but less so about future income and business prospects. Travel plans increased, though still below pre-pandemic levels.


The forecast for CB Consumer Confidence is projected at 99.8, a decrease from the prior figure of 100.4.


The upcoming CB Consumer Confidence report will be released on Tuesday at 2:00 PM GMT.

USD - JOLTS Job Openings (High Impact)​

The JOLTS Job Openings report measures the number of job openings during the reported month, excluding the farming industry; an 'Actual' figure greater than the 'Forecast' is positive for the currency because job creation is a crucial leading indicator of consumer spending, which constitutes a significant portion of overall economic activity.


In May 2024, the number of job openings in the U.S. rose by 221,000 to 8.140 million, surpassing the market consensus of 7.91 million, following a downwardly revised 7.919 million in April, the lowest in three years. Job openings increased notably in state and local government (excluding education), durable goods manufacturing, and the federal government, while they decreased in accommodation and food services and private educational services. Regionally, job openings grew in the Midwest, West, and Northeast but declined in the South. Despite these sectoral and regional shifts, the overall job openings rate remained at 4.9%. Hiring and separations held steady at 5.8 million and 5.4 million, respectively, with quits stable at 3.5 million and layoffs consistent at 1.7 million. April revisions indicated a slight contraction in labor market activity.


The JOLTS Job Openings forecast projects an increase to 8.05 million, down from the previous figure of 8.14 million.


The upcoming JOLTS Job Openings report is scheduled for release on Tuesday at 2:00 PM GMT.

 

[MiloPlexyTrade]

31st July 2024

Wednesday​

On Wednesday, global markets will closely monitor a range of economic reports, including Australia's CPI and retail sales, China's PMI data, Japan's Policy Rate and consumer confidence, Eurozone Core and CPI Flash Estimates, and the U.S. releases such as the ADP Employment Change, Employment Cost Index, Pending Home Sales, Chicago PMI, and Federal Funds Rate decision, along with a press conference by the Federal Open Market Committee (FOMC). Canada will also report its monthly GDP figures.

AUD - CPI q/q (High Impact)​

The Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers on a quarterly basis. An actual CPI reading greater than the forecasted figure is generally positive for a currency because it indicates higher inflation, which may prompt the central bank to raise interest rates to contain inflation. Since consumer prices are a significant component of overall inflation, this relationship is crucial for currency valuation. The CPI is derived by sampling the average prices of various goods and services and comparing these prices to those from previous samples.

In a report by the Australian Bureau of Statistics (ABS), it was revealed that Australia's Consumer Price Index (CPI) experienced a significant increase, rising by 1.0% in the first quarter of 2024. This marked an uptick from the previous quarter's 0.6% growth and surpassed market expectations, which had forecasted a 0.8% rise. The data highlighted a sharper acceleration in consumer prices than anticipated, reflecting growing inflationary pressures within the economy.

The forecast for the CPI quarter-on-quarter is showing no change, remaining at the same 1.0% outcome as before.

AUD - CPI y/y (High Impact)​

The Consumer Price Index (CPI) Year-over-Year measures the change in the price of goods and services purchased by consumers. When the actual CPI figure exceeds the forecasted value, it is generally advantageous for the currency. This is because consumer prices significantly impact overall inflation, which in turn affects currency valuation. Rising inflation typically prompts the central bank to raise interest rates to manage inflationary pressures. The CPI is calculated by sampling the average prices of a range of goods and services and comparing these to prices from a previous period.

In May, the monthly Consumer Price Index (CPI) indicator rose by 4.0% annually, up from April's 3.6%. Excluding volatile items like automotive fuel, fruit, vegetables, and holiday travel, the CPI also showed a 4.0% increase, slightly down from 4.1% in April. New dwelling prices maintained a steady annual growth of 4.9% for the tenth consecutive month, reflecting ongoing higher costs for labor and materials. Rental prices saw a slight decrease to 7.4% from April's 7.5%, while electricity prices surged by 6.5%, influenced by the phasing out of Energy Bill Relief Fund rebates. Without these rebates, electricity prices would have soared by 14.5% over the year. Food and non-alcoholic beverages experienced a moderated rise of 3.3%, down from 3.8% in April, with fruit and vegetable prices notably increasing by 4.4%. Meanwhile, meat and seafood prices declined by 0.6%. Automotive fuel prices rose significantly by 9.3%, driven by higher wholesale prices earlier in the year, despite a 5.1% monthly drop in May. Insurance prices, while still high, eased slightly to a 14.0% annual rise, down from 16.5% in April. Holiday travel and accommodation prices showed a 2.9% annual increase, reversing a previous decline, with international travel being the primary driver, though monthly figures fell by 2.7% due to decreased post-school holiday demand.

The projected year-over-year Consumer Price Index is anticipated to be 3.8%, a decrease from the prior rate of 4.0%.

AUD - Trimmed Mean CPI q/q (High Impact)​

The Trimmed Mean CPI q/q measures changes in consumer prices, excluding the most volatile 30% of items. A higher-than-expected actual value is positive for the currency, as consumer prices significantly influence overall inflation. Inflation affects currency valuation because rising prices often lead the central bank to raise interest rates to manage inflation.

Australia's trimmed mean Consumer Price Index (CPI) recorded a stronger-than-expected increase in the first quarter of 2024, rising by 1.0% from the previous quarter. This acceleration surpasses both the market forecasts and the 0.8% rise seen in the final quarter of 2023. Historically, the trimmed mean CPI, which excludes volatile price movements to provide a clearer measure of underlying inflation trends, has averaged 0.68% since its inception in 2002. The first quarter's performance is notably higher than this long-term average, and is closer to the record high of 1.80% witnessed in the third quarter of 2022. This recent uptick suggests a persistent underlying inflationary pressure within the Australian economy, potentially impacting future monetary policy decisions.

The forecast for the Trimmed Mean CPI on a quarter-over-quarter basis remains unchanged at 1.0%, consistent with the previous outcome.

The CPI data, including quarter-over-quarter, year-over-year, and Trimmed Mean CPI quarter-over-quarter, is scheduled for release on Wednesday at 1:30 AM GMT.

AUD - Retail Sales m/m (Medium Impact)​

The month-over-month Retail Sales measure tracks changes in the total value of retail sales. When actual results surpass forecasts, it typically strengthens the currency, as this indicator reflects consumer spending, a major driver of overall economic activity. Traders closely monitor this data because it provides crucial insights into the health of consumer spending, which significantly impacts economic performance and market sentiment.

In May 2024, Australia's retail sector witnessed a significant uptick, with sales rising by 0.6% month-on-month, according to preliminary data. This growth, which exceeded expectations of a 0.2% increase, marks a robust continuation from April's modest 0.1% rise and represents the fastest growth since January. The increase in sales was largely driven by early end-of-financial-year promotions and sales events, enticing consumers across various sectors. Notably, household goods retailing surged by 1.1%, compared to 0.7% in April, and there was a strong recovery in the clothing, footwear, and personal accessory sector, which jumped by 1.6% after a previous decline of 0.8%. Food retailing also improved significantly, posting a 0.7% increase following a 0.5% contraction in April. However, other areas of retail experienced slowdowns, with 'other retailing' growing only by 0.2%, down from 1.7%, and sales in cafes, restaurants, and takeaway food services slightly declining by 0.1%. Regionally, Victoria, Western Australia, and Tasmania led with increases of 1.2%, 1.3%, and 0.7% respectively, while New South Wales and South Australia saw slight declines in retail sales.

The forecast for month-over-month Retail Sales stands at 0.3%, down from the previous outcome of 0.6%.

The next month-over-month Retail Sales report is scheduled for release on Wednesday at 1:30 AM GMT.

CNY - Manufacturing PMI (High Impact)​

The Manufacturing PMI, based on surveys of 3,000 purchasing managers, measures industry conditions such as employment, production, and new orders. An 'Actual' figure higher than the 'Forecast' benefits the currency, with values above 50 indicating expansion and below 50 indicating contraction. This measure significantly impacts currency markets, especially if released before the Caixin Manufacturing PMI, due to China's global economic influence. Traders use this index as a leading economic indicator since purchasing managers have the most current insights into business conditions.

China's manufacturing activity contracted for the second consecutive month in June, with the National Bureau of Statistics (NBS) purchasing managers' index (PMI) remaining at 49.5, unchanged from May and below the 50-mark that separates growth from contraction. This figure aligns with the median forecast in a Reuters poll. Xu Tianchen, senior economist at the Economist Intelligence Unit, noted that actual industrial activity might be stronger than the PMI data suggests due to unrecorded export momentum. However, inadequate external and domestic demand continues to hinder a recovery in producer prices. Despite a sub-index of production being above 50, other critical indexes, including new orders, raw material stocks, employment, supplier delivery times, and new export orders, were all in contractionary territory. Analysts expect the Chinese government to roll out more policy support measures, with fiscal policy likely taking the lead due to limited room for monetary easing amidst currency pressures. High local-government debt and deflationary pressure further challenge recovery prospects, tempering expectations among investors and factory owners.

The forecast for the Manufacturing PMI stands at 49.4, compared to the previous outcome of 49.5.

CNY - Non-Manufacturing PMI (Medium Impact)​

The Non-Manufacturing PMI measures the level of a diffusion index derived from a survey of approximately 1,200 purchasing managers in the services sector. An 'Actual' result greater than the 'Forecast' is generally favorable for the currency. A reading above 50.0 indicates industry expansion, while a reading below 50.0 signals contraction. Chinese data, due to China's significant impact on the global economy and investor sentiment, can notably influence currency markets. Since April 2012, the series has been reported on a seasonally adjusted basis. Traders monitor this indicator closely as it provides early insights into economic health through the purchasing managers' assessments of business conditions, including employment, production, new orders, prices, supplier deliveries, and inventories.

China's non-manufacturing sector showed signs of slowing in June as the non-manufacturing Purchasing Managers' Index (PMI) dropped to 50.5, down from 51.1 in May, marking the lowest reading since December. The decline was driven by a reduction in both services and construction activities, with the services PMI falling to 50.2, a five-month low, and the construction PMI slipping to 52.3, the weakest since July of the previous year. Analysts anticipate that the Chinese government will introduce additional policy support measures to stimulate domestic consumption and counteract the economic slowdown, although high local-government debt and deflationary pressures present significant challenges.

The forecast for the Non-Manufacturing PMI stands at 50.2, compared to the previous outcome of 50.5.

The upcoming Manufacturing & Non-Manufacturing PMI will be released on Wednesday at 1:30 AM GMT.

JPY - BOJ Policy Rate (High Impact)​

The BOJ Policy Rate involves the interest rate applied to excess current account balances held at the Bank of Japan. When the actual rate exceeds the forecast, it is beneficial for the currency. Traders closely monitor short-term interest rates as they are vital for currency valuation, using other indicators mainly to anticipate future rate changes.

The Bank of Japan (BoJ) maintained its key short-term interest rate at around 0% to 0.1% during its June meeting, following the first rate hike since 2007 in March, which ended eight years of negative rates. The BoJ, considering reducing its monthly JPY 6 trillion bond purchases, passed the motion with an 8-1 majority, with board member Nakamura Toyoaki dissenting. This move aims to allow long-term rates to move more freely, with a detailed plan expected in July. Japan's economy has shown moderate recovery, bolstered by resilient private consumption and improving corporate profits, despite flat exports and public investment. The year-on-year inflation rate has been between 2% and 2.5%, with underlying CPI expected to rise gradually. The BoJ noted that Japan's economy is likely to continue growing above its potential growth rate, although uncertainties remain regarding global economic activity, commodity prices, and domestic wage- and price-setting behaviors.

The forecast for the BOJ policy rate indicates no changes, remaining the same as the previous outcome of 0.1%.

The BOJ policy rate decision is set to be released on Wednesday at 4:00 AM GMT.

JPY - Consumer Confidence (Medium Impact)​

Consumer Confidence measures the level of a composite index based on surveys of households (excluding single-person homes), where a result that exceeds forecasts is considered favorable for the currency. Traders closely monitor this indicator because financial confidence often predicts consumer spending trends, which significantly impact overall economic activity. The index is derived from a survey of approximately 5,000 households, asking respondents to evaluate economic conditions, including livelihood, income growth, employment, and the climate for major purchases.

In June 2024, Japan's Consumer Confidence Index slightly improved to 36.4, up from May’s six-month low of 36.2, though it fell just short of market forecasts of 36.5, according to a Cabinet Office report. The rise was driven by better sentiment towards income growth, which increased to 40.6 from 39.9 the previous month, and a greater willingness to purchase durable goods, which rose to 29.6 from 29.0. However, confidence in employment and overall livelihood declined, with the employment index falling to 41.7 from 42.0 and the livelihood index decreasing to 33.8 from 33.9. Additionally, 93.8% of respondents anticipated higher prices in the coming year, up from 93.5% in May, while only 2.8% expected prices to remain steady and 1.8% anticipated a decline.

The forecast for Consumer Confidence stands at 36.5, compared to the previous outcome of 36.4.

The next Consumer Confidence report is scheduled for release on Wednesday at 5:00 AM GMT.

EUR – Eurozone Core CPI Flash Estimate y/y (High Impact)​

The Core CPI Flash Estimate y/y tracks changes in the prices of goods and services, excluding food, energy, alcohol, and tobacco. If the actual data exceeds forecasts, it is typically favorable for the currency. Traders closely monitor this measure because it reflects underlying inflation trends. Rising consumer prices can lead central banks to raise interest rates to combat inflation, which in turn can impact currency valuation.

In June 2024, the Euro Area saw a steady performance in core inflation, which remained unchanged at 2.9% year-over-year, defying market expectations of a slight decrease to 2.8%. This core CPI flash estimate, which excludes volatile components such as energy, food, alcohol, and tobacco, highlights underlying price pressures within the economy. This stability occurs despite variations in broader inflationary trends, where general inflation has slightly decreased to 2.5%, aligning with market forecasts. Notable was the consistent inflation rate for services, holding firm at 4.1%, and non-energy industrial goods, which maintained a 0.7% rise. This core inflation data is particularly significant as it suggests persistent price stickiness in sectors less affected by external volatile factors, indicating a potential ongoing challenge for monetary policy makers aiming to balance growth and price stability in the region.

The forecast for the Core CPI Flash Estimate on a year-over-year basis is currently at 2.8%, compared to the previous outcome of 2.9%.

EUR – Eurozone CPI Flash Estimate y/y (High Impact)​

The CPI Flash Estimate (y/y) measures the annual change in consumer prices for goods and services. If the actual CPI figure exceeds forecasts, it is typically seen as favorable for the currency. Traders focus on this indicator because rising consumer prices can lead to higher inflation, which often prompts central banks to raise interest rates to manage inflation. Consequently, higher interest rates can strengthen the currency, making this data crucial for currency valuation.

In June 2024, the Euro Area's annual inflation rate decreased slightly to 2.5%, meeting market expectations and showing a modest decline from 2.6% in May, according to preliminary estimates. This deceleration was evident across various sectors, with notable slowdowns in food, alcohol, and tobacco at 2.5%, and energy at 0.2%. While inflation for non-energy industrial goods remained steady at 0.7%, services continued to see higher inflation at 4.1%. Monthly CPI maintained a 0.2% rise. Among key economies, inflation rates decreased in Germany, France, Spain, and Ireland, but increased in Italy and the Netherlands, indicating a mixed but generally stabilizing price landscape across the region.

The latest forecast for the Consumer Price Index Flash Estimate on a year-over-year basis suggests an increase of 2.5%, which is unchanged from the previous outcome of 2.5%.

The upcoming Core CPI Flash Estimate and CPI Flash Estimate, both year-over-year, are set to be released on Wednesday at 9:00 AM GMT.

USD - ADP Non-Farm Employment Change (High Impact)​

The ADP Non-Farm Employment Change measures the estimated increase or decrease in employment numbers from the previous month, excluding jobs in agriculture and government sectors. A higher 'Actual' figure compared to the 'Forecast' is typically positive for the currency. Traders pay close attention to this data because job creation is a key indicator of consumer spending, which drives a large portion of economic activity. The estimate is derived from ADP's analysis of payroll data from over 25 million workers.

In June, the U.S. private sector added 150,000 jobs, falling short of the anticipated 160,000, according to ADP. This increase was less than the revised total of 157,000 for May and marked the lowest monthly gain since January. The bulk of these jobs came from the leisure and hospitality sector, which contributed 63,000 positions, making it the top performer across all categories tracked by ADP. Other sectors, such as construction and professional services, also saw gains, while natural resources, mining, and manufacturing experienced job losses. Wage growth decelerated to 4.9% year-over-year for existing employees, the lowest since August 2021, while job switchers enjoyed a 7.7% increase. The majority of new jobs were in companies with 50-499 employees, particularly concentrated in the Southern U.S. This ADP report, which often differs from the Bureau of Labor Statistics' more comprehensive data, precedes the Labor Department’s expected announcement of 200,000 new jobs for the same period.

The latest forecast for the ADP Non-Farm Employment Change predicts an increase to 147,000, a decrease from the previous figure of 150,000.

The upcoming ADP Non-Farm Employment Change report is set to be released on Wednesday at 12:15 PM GMT.

CAD - GDP m/m (High Impact)​

The GDP month-over-month (m/m) measures reflect the change in the inflation-adjusted value of all goods and services produced by the economy. An 'Actual' value that exceeds the 'Forecast' is generally seen as favorable for the currency. Traders pay close attention to this indicator because it is the broadest measure of economic activity and serves as the primary gauge of the overall health of the economy.

Canada's real GDP grew by 0.3% in April 2024, matching initial estimates, according to StatCan. This increase followed flat growth in March, with notable gains in wholesale trade, mining, quarrying, manufacturing, and oil and gas extraction. The arts, entertainment, and recreation sectors also saw a boost, supported by the NHL playoffs featuring four Canadian teams. The Bank of Canada is monitoring these GDP results alongside inflation and job market data to determine future interest rate changes, following a recent 25-basis-point cut. Preliminary expectations for May 2024 predict a GDP growth of 0.1%, driven by increases in manufacturing, real estate, rental and leasing, and finance and insurance, though tempered by declines in retail and wholesale trade. Goods-producing industries rose by 0.3% in April, led by manufacturing (+0.4%), agriculture, forestry and fishing (+0.6%), and mining, quarrying, oil and gas extraction (+0.6%), despite drops in utilities (-0.2%) and construction (-0.4%). Service-producing industries also grew by 0.3%, driven by wholesale trade (+2%) and accommodation and food services (+1.2%).
The forecast for the month-over-month GDP growth is 0.1%, down from the previous outcome of 0.3%.

The upcoming month-over-month GDP report is scheduled for release on Wednesday at 12:30 PM GMT.

USD - Employment Cost Index q/q (High Impact)​

The Employment Cost Index (ECI) measures the change in the price businesses and the government pay for civilian labor, with a higher-than-forecast ECI generally being favorable for the currency because it signals potential consumer inflation, as increased labor costs are often passed on to consumers.

The U.S. Bureau of Labor Statistics reported that compensation costs for civilian workers rose by 1.2% in the three-month period ending in March 2024, with wages and salaries increasing by 1.1% and benefit costs by 1.1% since December 2023. Over the 12-month period, ending in March 2024, compensation costs for civilian workers surged by 4.2%, with wages and salaries increasing by 4.4% and benefit costs by 3.7%. In the private industry sector, compensation costs rose by 4.1% over the year, while for union workers, the increase was higher at 5.3%, compared to 3.9% for nonunion workers. State and local government workers saw compensation costs rise by 4.8% over the 12-month period ending in March 2024. Additionally, inflation-adjusted compensation costs for private industry workers increased by 0.6% over the same period.

The forecast for the Employment Cost Index quarter-over-quarter is 1.0%, down from the previous outcome of 1.2%.

The Employment Cost Index quarter-over-quarter is scheduled for release on Wednesday at 12:30 PM GMT.

USD - Chicago PMI (Medium Impact)​

The Chicago PMI, derived from a survey of approximately 200 purchasing managers in the region, measures the level of economic activity in the manufacturing sector through a diffusion index. A reading above the forecasted level typically benefits the currency, as it signals stronger-than-expected economic conditions. Traders closely follow this indicator because it offers a timely glimpse into the economic climate, with purchasing managers' assessments providing crucial insights into business sentiment and market trends.

The Chicago Business Barometer, commonly known as the Chicago PMI, surged to 47.4 in June 2024, up from a four-year low of 35.9 in May. Despite this notable increase and marking the highest level since November, the index remains in contraction territory for the seventh consecutive month, indicating ongoing challenges in the business environment.

The forecast for the Chicago PMI is 44.8, down from the previous outcome of 47.4.

The Chicago PMI is set to be released on Wednesday at 1:45 PM GMT.

USD - Pending Home Sales m/m (High Impact)​

The Pending Home Sales measure tracks the change in the number of homes under contract but not yet closed, excluding new construction, with a higher-than-forecast result generally being positive for the currency because it indicates economic health through the wide-reaching ripple effects of home sales, such as renovations, mortgage transactions, and brokerage fees.

In May, pending home sales in the U.S. dropped by 2.1% according to the National Association of REALTORS (NAR), with the Midwest and South experiencing declines while the Northeast and West saw gains. The Pending Home Sales Index (PHSI) fell to 70.8, marking a 6.6% year-over-year decrease. Despite rising inventory and lower demand suggesting a potential easing in home price appreciation, NAR Chief Economist Lawrence Yun predicts that more inventory in a job-creating economy will eventually boost home buying, especially when mortgage rates decrease. NAR forecasts mortgage rates will stay above 6% in 2024 and 2025, with existing-home sales rising to 4.26 million in 2024 and 4.92 million in 2025. The median existing-home price is expected to hit a record high of $405,300 in 2024 and $412,000 in 2025. Regionally, the Northeast's PHSI rose 1.1% month-over-month but dropped 2.3% year-over-year, while the Midwest's index fell 0.4% from April and 5.6% from the previous year. The South saw a 5.5% monthly decrease and a 10.4% annual decline, whereas the West's index increased by 1.4% from April but decreased by 2.1% from May 2023.

The forecast for Pending Home Sales month-over-month is 1.4%, up from the previous decline of -2.1%.

The Pending Home Sales report will be released on Wednesday at 2:00 PM GMT.

USD - Federal Funds Rate (High Impact)​

The Federal Funds Rate, which is the interest rate at which depository institutions lend balances held at the Federal Reserve to one another overnight, is crucial for currency valuation because an actual rate higher than the forecast is typically favorable for the currency; traders closely monitor this rate as short-term interest rates are the key determinant in currency value, with forecasts and other indicators mainly serving to predict future rate changes, and the rate itself is determined by the votes of FOMC members, which are detailed in the FOMC statement.

The Federal Reserve decided to maintain its federal funds rate in the range of 5.25%-5.50% for the seventh consecutive meeting in June 2024, emphasizing a cautious approach amidst persistent but slightly easing inflation rates. The policymakers revised their rate cut expectations to one for this year, down from three forecasted in March, and signaled four potential reductions in 2025. Despite adjustments in the long-run interest rate outlook from 2.6% to 2.8%, reflecting a higher-for-longer rate scenario, and slight upward revisions in inflation forecasts, the Fed remains committed to its 2% inflation target. Economic projections remain stable with GDP growth expected at 2.1% for 2024 and inflation forecasts adjusted upward for the next two years. The unemployment rate is projected to remain low, underscoring a solid economic performance. The Fed reiterated its readiness to adjust policies if necessary but indicated that rate reductions would not be considered until there is greater confidence that inflation is consistently moving towards the target.

The forecast for the Federal Funds Rate indicates that it will remain unchanged at 5.50%, the same as the previous outcome.

The next Federal Funds Rate announcement is scheduled for Wednesday at 6:00 PM GMT.

USD - FOMC Press Conference (High Impact)​

The Federal Reserve Chair's Press Conference, part of the Federal Open Market Committee (FOMC) meetings, is a key event for traders and investors, held eight times a year. This briefing is crucial as it provides detailed insights into the Fed's recent interest rate decisions, the economic factors influencing these choices, and the outlook for future monetary policy. Traders closely follow these updates, as a more hawkish stance than anticipated can positively impact the currency. The press conference, also known as the Chair's Press Briefing, serves as the Fed's primary method of communicating its monetary policy stance and economic expectations, making it a pivotal moment for market participants.

The FOMC Press Conference is scheduled to be released on Wednesday at 6:30 PM GMT.

 

[MiloPlexyTrade]

1st of August 2024

Thursday​

Global markets are set for significant movement with the release of various economic reports of both high and medium impact. In Asia, Japan will announce its Final Manufacturing PMI, followed by China, which will release its Caixin Manufacturing PMI figures. In the UK, the focus will shift to the announcement of the Official Bank Rate. Meanwhile, in the United States, key reports including unemployment claims and the ISM Manufacturing PMI will be released, providing crucial insights into the labor market and manufacturing sector.

JPY - Final Manufacturing PMI (Medium Impact)​

The Final Manufacturing PMI, derived from a survey of around 400 purchasing managers, indicates economic health with a reading above 50.0 signaling expansion and below 50.0 signaling contraction. Traders watch this indicator closely, as it reflects current business conditions and impacts currency if the ‘Actual’ exceeds the ‘Forecast.’ The report is released in two versions: Flash, which has the most immediate impact, and Final.

In July 2024, Japan’s au Jibun Bank Manufacturing PMI unexpectedly dropped to 49.2 from 50.0 in June, falling short of the anticipated 50.5 and signaling the first decline in factory activity since April. The manufacturing sector experienced its fifth contraction of the year due to reduced output, a sharp fall in new orders, and ongoing decreases in foreign sales and purchasing levels. Employment continued to rise, and backlogs of work declined for the fourth month in a row, highlighting spare capacity in the sector. Additionally, delivery times lengthened, input cost inflation surged to its highest since April 2023, while output cost inflation eased to a four-month low. Despite a weakening in business confidence, it remained positive.

The forecast for the Final Manufacturing PMI stands at 49.2, compared to the previous outcome of 50.0.

The Final Manufacturing PMI is scheduled for release on Friday at 12:30 AM GMT.

CNY - Caixin Manufacturing PMI (Medium Impact)​

The Caixin Manufacturing PMI is a diffusion index derived from a survey of approximately 500 purchasing managers, assessing business conditions such as employment, production, and new orders; a reading above 50.0 indicates industry expansion while below suggests contraction, with variations between the Flash and Final reports prior to September 2015 potentially causing historical data inconsistencies. This PMI is a key leading economic indicator as it reflects the current business climate and purchasing managers' insights.

In June 2024, the Caixin China General Manufacturing PMI rose to 51.8 from 51.7 in May, surpassing market expectations of 51.2 and reaching its highest level since May 2021. This marked the eighth consecutive month of increased factory activity, with output growth peaking at a two-year high and new orders expanding for the eleventh month. Purchasing levels surged the most in over three years, leading to higher stockpiles. While foreign sales continued to grow, the pace of expansion slowed to its lowest in six months. Employment declines moderated, with workforce expansions roughly balancing reductions, and backlogs of work increased for the fourth month. Delivery times lengthened for the first time since February due to material shortages and constraints. On the inflation front, input prices climbed the most in two years, and selling prices rose for the first time in six months. However, sentiment fell to a more than four-and-a-half-year low due to heightened competition and uncertain market conditions.

The forecast for the Caixin Manufacturing PMI suggests a reading of 51.4, down slightly from the previous figure of 51.8.

The upcoming Caixin Manufacturing PMI report is scheduled for release on Friday at 1:45 AM GMT.

GBP - Official Bank Rate (High Impact)​

The Official Bank Rate, set by the Bank of England through a vote by the Monetary Policy Committee (MPC) whose individual votes are published two weeks later, represents the interest rate at which the BOE lends to financial institutions overnight; it is crucial for currency valuation because a rate higher than forecast is favorable for the currency, and traders prioritize short-term interest rates over other indicators to predict future rate changes.

The Bank of England (BoE) decided to keep its interest rate at a 16-year high of 5.25% during its June meeting, despite inflation reaching the central bank's 2% target. Seven members of the Monetary Policy Committee (MPC) voted to hold, while two had favored a 25 basis point cut. The MPC noted easing short-term inflation expectations and wage growth but highlighted uncertainties in labor market data. Market speculation had suggested a nearly 50% chance of an August rate cut, reflecting a "finely balanced" decision by the BoE. The pound fell 0.2% against the dollar following the announcement.

The forecast for the Official Bank Rate is projected at 5.0%, down from the previous rate of 5.25%.

The upcoming Official Bank Rate is scheduled to be released on Thursday at 11:00 AM GMT.

USD – Unemployment Claims (High Impact)​

Unemployment claims track the number of people filing for unemployment insurance for the first time each week. When the actual figure is lower than the forecast, it is considered positive for the currency. Traders pay attention to this metric because, while it is a lagging indicator, it provides valuable insights into economic health. Since consumer spending closely follows labor-market conditions, changes in unemployment claims can influence monetary policy decisions.

In the week ending July 20, the number of initial unemployment claims decreased by 10,000 to 235,000, following a revised figure of 245,000 for the prior week, according to the Labor Department. This marks the ninth consecutive week with claims exceeding 220,000, a threshold not breached in most of 2024. Despite this uptick, jobless claims remain at historically healthy levels, reflecting only modest increases in layoffs. The total number of Americans receiving unemployment benefits dropped to approximately 1.85 million for the week ending July 13, a decrease of 9,000 from the previous week. Additionally, the four-week moving average of claims rose slightly to 235,250, highlighting a broader trend in the labor market that remains stable yet elevated.

The forecast for unemployment claims projects 236,000, an increase from the previous figure of 235,000.

The next unemployment claims report is scheduled for release on Thursday at 12:30 PM GMT.

USD - ISM Manufacturing PMI (High Impact)​

The ISM Manufacturing PMI, also known as the Manufacturing ISM Report On Business, is a diffusion index based on a survey of approximately 300 purchasing managers in the manufacturing sector, and it measures the level of business conditions such as employment, production, new orders, prices, supplier deliveries, and inventories; a reading above 50.0 indicates industry expansion and is favorable for currency if it surpasses forecasts, as it serves as a leading indicator of economic health due to the purchasing managers' up-to-date insights into their company's view of the economy.

In June 2024, U.S. manufacturing activity continued its downward trend, marking the third consecutive month of contraction with the Manufacturing PMI falling slightly to 48.5%, as reported by the Institute for Supply Management (ISM). The sector witnessed declines across several key indexes, including New Orders and Production, both showing contraction. Employment also dipped, indicating ongoing workforce reductions in the industry. Despite a decline in overall manufacturing performance, some industries like Chemical Products and Petroleum & Coal Products reported growth. Suppliers are responding faster than in previous months, suggesting some easing in supply chain constraints. However, the economic outlook remains cautious with investment in capital and inventory subdued, influenced by current monetary policy and broader economic conditions. The Prices Index indicated a slight increase in raw materials costs, although the rate of price increases is slowing. Overall, the data reflects ongoing challenges in the manufacturing sector, with only sporadic signs of growth amidst general contraction.

The ISM Manufacturing PMI is projected at 48.8, up from the previous outcome of 48.5.

The upcoming ISM Manufacturing PMI report is scheduled for release on Thursday at 2:00 PM GMT.

 

[MiloPlexyTrade]

2nd August 2024

Friday

​

Switzerland is preparing to release its Consumer Price Index (CPI) figures, which will show both month-over-month and year-over-year changes. This data is expected to provide important insights into the nation's inflation trends. Simultaneously, the United States will unveil key labor market statistics, including the month-over-month change in Average Hourly Earnings, Non-Farm Employment Change, and the Unemployment Rate. These updates are poised to offer crucial indications of economic health and employment conditions in both regions.

CHF - CPI m/m (High Impact)​

The Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers, with its monthly release occurring approximately three days after the end of the month. This indicator is crucial for currency valuation, as a CPI reading that exceeds forecasts typically signals favorable conditions for the currency. Consumer prices are a significant component of overall inflation, which in turn influences central bank policies; rising inflation often prompts the central bank to increase interest rates to maintain price stability. CPI is derived by sampling and comparing the average prices of a variety of goods and services from one period to the next.


In Switzerland, the Consumer Price Index (CPI) showed no change in June 2024 compared to the previous month, as reported by the Federal Statistical Office (FSO). The CPI, a key indicator of inflation, reflected a year-over-year increase of 1.3%. This stability in consumer prices was the result of diverse price movements across different sectors. Noteworthy increases were observed in the cost of international package holidays, select vegetables, hotel stays, and private transportation rentals. However, these were balanced by significant declines in the prices of air transport, petrol, diesel, and clothing and footwear, with the latter influenced by seasonal sales. This pattern underscores the dynamic nature of market forces that continue to shape the cost of living in Switzerland.

The forecast for the month-over-month Consumer Price Index (CPI) is showing a decrease of -0.2%, a shift from the previous reading of 0.0%.

CHF – CPI y/y (Medium Impact)​

The Consumer Price Index (CPI), published monthly by the Swiss Federal Statistical Office, tracks changes in the prices of goods and services representative of Swiss household consumption. Serving as the primary gauge of inflation and shifts in purchasing behavior, the CPI's year-over-year reading compares current prices to those from the same month the previous year. Typically, a higher CPI reading is considered positive for the Swiss Franc (CHF), while a lower reading is viewed as negative.

In June 2024, Switzerland's annual inflation rate eased to 1.3%, down from May’s four-month high of 1.4% and below market expectations. The decrease was driven by lower prices for food and non-alcoholic beverages, clothing, and household goods. Prices also moderated for restaurants, hotels, and other goods and services. However, inflation accelerated for alcoholic beverages, tobacco, communications, and recreation. The Consumer Price Index remained flat month-over-month, following a 0.3% increase in May. Additionally, the core inflation rate, excluding volatile items, fell slightly to 1.1% from 1.2% in the previous month.

The forecast for the CPI year-over-year stands at 1.3%, matching the previous outcome of 1.3%.


The monthly and annual CPI figures are scheduled for release this Friday at 6:30 AM GMT.

USD - Average Hourly Earnings m/m (High Impact)​

The Average Hourly Earnings m/m indicator measures the change in wages that businesses pay for labor, excluding the farming sector. If the 'Actual' figure exceeds the 'Forecast,' it generally benefits the currency. Traders pay close attention to this indicator because it acts as a leading indicator of consumer inflation; when businesses face higher labor costs, these increased expenses are often passed on to consumers in the form of higher prices.


In June, the U.S. Bureau of Labor Statistics reported a modest increase in average hourly earnings of 0.3%, rising to $35.00, reflecting a 3.9% growth over the past year. This wage increase coincides with a significant gain in nonfarm payroll employment, which rose by 206,000 positions, largely driven by sectors such as government, health care, social assistance, and construction. Despite these job gains, the unemployment rate remained stable at 4.1% with little change in the number of unemployed at 6.8 million. Additionally, employment adjustments included a decrease in retail trade while professional and business services saw minimal change. This overall economic picture showcases a steady labor market with continued wage growth across various sectors.


The forecast for Average Hourly Earnings m/m predicts no change from the previous outcome of 0.3%.

USD - Non-Farm Employment Change (High Impact)​

The Non-Farm Employment Change measures the change in the number of employed individuals in the economy during the previous month, excluding those in the farming sector. This indicator is crucial for currency traders because a higher-than-expected 'actual' figure compared to the 'forecast' typically signals a positive economic outlook, leading to currency appreciation. Job creation is a key leading indicator of consumer spending, which drives a significant portion of overall economic activity. Thus, strong employment figures often suggest a robust economy and can influence currency values accordingly.


In June, the US saw an addition of 206,000 nonfarm payroll jobs, indicating steady job growth across various sectors. This increase aligns closely with the average monthly gain of 220,000 jobs over the past year. Significant employment gains were noted in government, health care, social assistance, and construction sectors. Government jobs rose by 70,000, surpassing the average monthly increase of 49,000, with notable rises in local and state government roles. The health care sector added 49,000 jobs, though this was slightly below its 12-month average. Social assistance roles increased by 34,000, primarily in individual and family services, while construction jobs grew by 27,000, both exceeding their respective averages. Conversely, retail trade and professional business services saw minimal changes, with a slight decrease in employment. Adjustments to previous months' data saw a downward revision for April and May, reducing earlier estimates by a combined total of 111,000 jobs. Overall, these figures reflect a resilient labor market, with an ongoing demand for workers across several key industries.


The forecast for Non-Farm Payrolls is set at 176,000, down from the previous outcome of 206,000.

USD - Unemployment Rate (High Impact)​

The unemployment rate measures the percentage of the workforce that is unemployed and actively seeking employment over the previous month. When the actual rate is lower than the forecasted rate, it is generally positive for the currency. Traders pay close attention to this figure because, despite being a lagging indicator, it reflects overall economic health and is closely linked to consumer spending. Additionally, the unemployment rate is crucial for shaping monetary policy, making it a key concern for policymakers and investors alike.


In the latest labor market update, the U.S. Bureau of Labor Statistics reported that the unemployment rate remained steady at 4.1% in June. This stability masks underlying dynamics, including a slight increase in unemployment among adult women and Asians, now at 3.7% and 4.1% respectively. While the jobless rates for other major worker groups, such as adult men, teenagers, Whites, Blacks, and Hispanics showed minimal changes. The total number of unemployed people slightly rose to 6.8 million, up from 6.0 million a year ago. Notably, the number of long-term unemployed individuals—those jobless for 27 weeks or more—increased by 166,000 to 1.5 million, accounting for 22.2% of all unemployed. Despite these figures, the labor force participation rate and employment-population ratio remained largely unchanged at 62.6% and 60.1%, respectively. Meanwhile, job gains were observed in government, health care, social assistance, and construction sectors, contributing to a total nonfarm payroll employment increase of 206,000 in June.


The forecast for the unemployment rate is expected to remain unchanged at the same 4.1% as the previous outcome.


On Friday at 12:30 PM GMT, key economic indicators will be released, including the Average Hourly Earnings month-over-month, the Non-Farm Employment Change, & the Unemployment Rate.

 

[MiloPlexyTrade]

5th August 2024

Monday​

On Monday, the financial markets are set for significant activity with a series of high and medium impact news announcements. The day will commence with China's release of its Caixin Services PMI, setting the tone for the global market. This will be followed by the Eurozone's Services PMI Final, providing further insight into the economic health of the region. Later in the day, attention will shift to the United States, where the US Final Services PMI and the ISM Services PMI will be announced, both of which are critical indicators of the country's economic performance. These announcements are expected to influence market movements and investor sentiment throughout the day.

CNY - Caixin Services PMI (Medium Impact)​

The Caixin Services Purchasing Managers Index (PMI), released monthly by Caixin Insight Group and S&P Global, is a key indicator of business activity in China’s services sector. Derived from surveys of senior executives at approximately 400 private and state-owned companies, it reflects changes in business conditions compared to the previous month. The index ranges from 0 to 100, with a reading above 50 indicating expansion and below 50 indicating contraction. As a leading indicator, it provides insights into economic health and trends in GDP, industrial production, employment, and inflation, making it significant for traders as it can influence the value of the Renminbi (CNY).

In June 2024, China's service economy continued its expansion, driven by rising new and export business, though at a slower pace compared to May. The Caixin China General Services Business Activity Index fell to 51.2 from 54.0, marking the slowest growth since October 2023 but still extending the expansion streak to 18 months. Despite improved demand and increased tourism boosting new business and exports, optimism waned to its lowest since March 2020, partly due to competition and softer economic conditions. Employment levels dipped slightly, leading to the fastest backlog accumulation in over two years. Input cost inflation persisted but at a reduced rate, resulting in marginal increases in service charges.

TL;DR

• Caixin Index dropped to 51.2 in June from 54.0 in May, the slowest growth since October 2023 but still expanding for 18 months.
• Business optimism fell to its lowest since March 2020 due to competition and weaker economic conditions.
• Employment decreased slightly, leading to the fastest backlog accumulation in over two years.
• Input cost inflation persisted but slowed, resulting in marginal service charge increases.
• New and export business improved, with tourism boosting these gains.

The forecast for the Caixin Services PMI is anticipated to be 51.4, showing an increase from the previous reading of 51.2.

The upcoming Caixin Services PMI report will be released on Monday at 1:45 AM GMT.

EUR - Final Services PMI (Medium Impact)​

The Final Services PMI, released monthly by S&P Global and Hamburg Commercial Bank (HCOB), measures the level of business activity in the Eurozone services sector based on a survey of about 2,000 purchasing managers. It is a diffusion index, with values above 50 indicating expansion and values below 50 indicating contraction. Higher-than-forecast readings are positive for the Euro. The index is a leading indicator of economic conditions, reflecting changes in employment, production, new orders, prices, supplier deliveries, and inventories, and can predict trends in GDP, industrial production, employment, and inflation.

In July 2024, the Eurozone Services PMI fell to 51.9, down from 52.8 in June and below the expected 53, signaling the slowest growth in Eurozone services since March. Despite this, the sector has continued to expand for the sixth consecutive month, driven by increased new orders and reduced backlogs. However, growth in hiring has slowed to its weakest pace since January. Additionally, input price inflation has risen, and business sentiment has declined, suggesting a more cautious outlook for the year ahead.

TL;DR

• Eurozone Services PMI fell to 51.9 in July from 52.8 in June, the slowest growth since March and below the expected 53.
• Sector Expansion continued for the sixth month, driven by increased new orders and reduced backlogs.
• Hiring Growth slowed to its weakest pace since January.
• Input Price Inflation rose, and business sentiment declined, indicating a more cautious outlook for the year ahead.

The Final Services PMI is projected to stay at 51.9, matching the previous outcome of 51.9.

The upcoming Final Services PMI is set to be released on Monday at 8:00 AM GMT.

USD – Final Services PMI (Medium Impact)​

The S&P Global US Services PMI, derived from responses of about 400 service sector companies, monitors variables such as sales, employment, and prices. A reading above 50 signals growth, while below 50 indicates decline. The key measure, the Services Business Activity Index, reflects changes in business activity from the previous month and parallels the Manufacturing Output Index. Traders value this index as it serves as a leading economic indicator, providing timely insights into market conditions and business sentiment.

The S&P Global Services PMI surged to 56 in July 2024, marking its highest level in nearly two and a half years, up from 55.3 in June and surpassing forecasts of 55, according to preliminary data. This increase reflects a sharp acceleration in new business, reaching its fastest growth in over a year. Despite this, the rate of job creation slowed from the previous month. Service providers reported the slowest rise in prices charged in almost four years, although their input costs climbed more rapidly. Optimism about future growth, however, has waned amid concerns over the upcoming Presidential Election and potential policy shifts. Additionally, businesses are apprehensive about the persistent high cost of living, which might influence inflation and interest rates.

TL;DR

Metric​	July 2024​	June 2024​	Forecast​	Notes​
S&P Global Services PMI​	56​	55.3​	55​	Highest level in nearly 2.5 years​
New Business Growth​	Sharp acceleration​	-​	-​	Fastest growth in over a year​
Job Creation​	Slowed​	-​	-​	Rate of job creation slowed from previous month​
Prices Charged​	Slowest rise in almost 4 years​	-​	-​	Slowest increase in nearly 4 years​
Input Costs​	Climbed more rapidly​	-​	-​	Input costs increased faster​
Future Growth Optimism​	Waned​	-​	-​	Concerns over Presidential Election and policy shifts​
Cost of Living Concerns​	Persistent​	-​	-​	Potential impact on inflation and interest rates​

The forecast for the Final Services PMI is projected to be 56.0, up from the previous figure of 55.3.

The Final Services PMI report is scheduled for release on Monday at 1:45 PM GMT.

USD - ISM Services PMI (High Impact)​

The Non-Manufacturing ISM Report On Business is a monthly index based on surveys from approximately 300 purchasing and supply executives nationwide. It tracks changes in indicators such as Business Activity, New Orders, and Employment, with readings above 50% signaling expansion and below 50% indicating contraction. Given that service orders account for about 90% of the US economy, the report provides crucial insights into economic health and business sentiment, making it a key leading indicator for traders.

In June 2024, the Services PMI reported by the Institute for Supply Management (ISM) revealed a contraction in the services sector, with a reading of 48.8 percent, down 5 percentage points from May's 53.8 percent. This marks the second contraction in three months and the third in the last 49 months. Significant drops were seen in the Business Activity Index, which fell to 49.6 percent from May's 61.2 percent, and the New Orders Index, which declined to 47.3 percent from 54.1 percent. The Employment Index also continued its downward trend, registering 46.1 percent. While the Prices Index decreased to 56.3 percent, indicating easing inflation, supply chain issues persisted, affecting delivery performance. Despite some growth in eight service industries, including Health Care and Construction, others like Retail Trade and Transportation saw declines. Respondents noted stable but high costs and ongoing supply chain challenges, contributing to an overall flat or lower business outlook.

TL;DR

• In June 2024, the Services PMI fell to 48.8%, signaling a contraction in the services sector.
• This is a 5 percentage point drop from May's 53.8%.
• The Business Activity Index decreased to 49.6%, and the New Orders Index dropped to 47.3%.
• The Employment Index continued its downward trend, reaching 46.1%.
• The Prices Index decreased to 56.3%, indicating easing inflation.
• Supply chain issues persisted, impacting delivery performance.
• Some industries like Health Care and Construction saw growth.
• Industries such as Retail Trade and Transportation experienced declines.
• The overall business outlook is flat or lower, with stable but high costs and ongoing challenges.

The forecast for the ISM Services PMI is 51.3, an increase from the previous outcome of 48.8.

The Final Services PMI report is set to be unveiled on Monday at 2:00 PM GMT.