It seems that the downward correction in the American stock market has ended, and its main indices are returning to the global bullish trend. If we predict to the traditional pre-New Year rally, then closer to the end of the year we will witness this rally, of course if the rhetoric of statements and actions of the Fed leaders also support it after the publication of weaker-than-expected CPI indices last week.
The dollar also corrected sharply after this publication. However, it is still too soon to talk about the end of the upward trend, given that it is also in demand as a protective asset amid the extremely tense geopolitical situations in various regions of the world.
The next week (20.11.2023 – 26.11.2023) will be less saturated with important publications of macro statistical data. However, market participants will pay attention to important macro statistics from the UK, Switzerland, the US, Japan, China, and Australia.
* during the coming week, new events may be added to the calendar and / or some scheduled events may be cancelled.
** GMT time
Monday, November20
No important macro statistics scheduled to be released. However, traders should pay attention to the speech (at 23:00 GMT) by the head of the RBA Michelle Bullock.
In her speech, Michelle Bullock will assess the current situation in the Australian economy and indicate further plans for the monetary policy of the department. Market participants would also like to hear Bullock’s views on central bank policy amid recessions across the world and high inflation in Australia.
Any signals from her regarding plans to change the parameters of the RBA’s monetary policy will cause a sharp increase in volatility in the AUD and in the Australian stock market. If the head of the Central Bank of Australia does not touch upon the topic of monetary policy, then the market reaction to her speech will be weak.
Tuesday, November 21
00:30 AUD Minutes of the last meeting of the RB of Australia
This document is published two weeks after the meeting and the decision on the interest rate. If the RBA is positive about the state of the country’s labor market, GDP growth rates, and is also hawkish about the inflation outlook for the economy, markets view this as a higher likelihood of a rate hike at the next meeting, which is a positive factor for the AUD. The bank’s soft rhetoric regarding inflation primarily puts pressure on the AUD.
During the recent (November 2023) meeting, the RBA again raised the interest rate to 4.35%. In addition, the RBA signaled the likelihood of further increases in the coming months.
“The Board remains committed to returning inflation to target,” the accompanying monetary policy statement said. But there was also a caveat that “considerable uncertainty remains about the outlook. Whether further tightening of monetary policy will be required to ensure inflation returns to target within a reasonable time frame will depend on emerging data and evolving risk assessments.”
The Australian dollar fell after this decision. If the published minutes contain unexpected information regarding the RBA’s monetary policy issues, the volatility in AUD quotes will increase.
12:30 CAD Consumer price indices in Canada
Consumer Price Index (CPI) reflects the dynamics of retail prices of the corresponding basket of goods and services, and the core indicator (Core CPI) does not take into account fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transport, and tobacco products. The inflation target for the Bank of Canada is in the range of 1% – 3%. An increase in the CPI indicator is a harbinger of a rate increase and a positive factor for the CAD.
Previous values:
- Consumer Price Index: -0.1% (+3.8% in annual terms), +0.4% (+4.0% in annual terms), +0.6% (+3.3% in annual terms) ), +0.1% (+2.8% in annual terms),
- Core Consumer Price Index (from the Bank of Canada): -0.1% (+2.8% in annual terms), +0.1% (+3.3% in annual terms), +0.5% (+3 .2% in annual terms), -0.1% (+3.2% in annual terms).
If the expected data turns out to be worse than previous values, this will negatively affect the CAD. Data better than previous values will strengthen the Canadian dollar.
19:00 USD Minutes of the last meeting of the Federal Open Market Committee
The publication of the minutes is extremely important for determining the course of the current Fed policy and the prospects for raising interest rates in the United States. The volatility of trading in financial markets during the publication of the minutes usually increases, since the text of the minutes often contains either changes or clarifying details regarding the results of the last FOMC meeting of the Federal Reserve.
At the end of the meeting that ended on November 1, 2023, the leaders of the central bank kept the interest rate unchanged at 5.50%, but also stated the need to maintain it at high levels for a “long” time.
A soft tone of the minutes will have a positive impact on stock indices and a negative impact on the US dollar. Tough rhetoric from Fed officials regarding the outlook for monetary policy will push the dollar to further growth.
Wednesday, November 22
08:35 AUD Speech by head of the RBA Michelle Bullock
In her speech, Michelle Bullock will assess the current situation in the Australian economy and indicate further plans for the monetary policy of the department. Market participants would also like to hear Bullock’s views on central bank policy amid recessions across the world and high inflation in Australia.
Any signals from her regarding plans to change the parameters of the RBA’s monetary policy will cause a sharp increase in volatility in the AUD and in the Australian stock market. If the head of the Central Bank of Australia does not touch upon the topic of monetary policy, then the market reaction to her speech will be weak.
16:30 CAD Speech by head of the Bank of Canada Tiff Macklem
The Canadian economy, like the entire global economy, has been slowing since 2020 (first due to the coronavirus pandemic). Previously, Maklem said that the country’s economy is quite stable. However, the situation has rapidly changed and not for the better. It will now be interesting to hear Macklem’s opinion regarding the stability of the Canadian economy and the monetary policy of the central bank.
If Tiff Macklem touches on the topic of the Bank of Canada’s monetary policy, then the volatility in the Canadian dollar quotes will increase sharply. Tough tone of his speech will help strengthen the Canadian dollar. Soft rhetoric of Macklem’s speech and the tendency to pursue a soft monetary policy will negatively affect the CAD quotes.
He will also likely explain the Bank of Canada’s recent interest rate decision and may provide some guidance for investors ahead of the central bank’s next meeting, likely next month.
Thursday, November 23
Due to Thanksgiving Day in the United States, American stock exchanges and banks will be closed on Thursday. Trading volumes will be fully restored only next week on Monday. However, this does not eliminate the likelihood of sharp fluctuations in a thin market.
This day marks the beginning of the festive season, which includes Christmas and continues until the New Year.
08:30 EUR Manufacturing and services PMI of the German economy according to S&P Global. Composite Manufacturing PMI of the German economy according to S&P Global (preliminary release)
The PMIs for the manufacturing and services sectors are important indicators of business conditions and the overall health of the German economy. These economic sectors form a significant part of Germany’s GDP. A result above 50 is seen as positive and strengthens the EUR, while a result below 50 is negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro.
Previous values:
- Manufacturing PMI: 40.8, 39.6, 38.8, 40.6, 43.2, 44.5, 44.7, 46.3, 47.3, 47.1, 46.2, 45 ,1, 47.8, 49.1, 49.3, 52.0, 54.8, 54.6,
- Services PMI: 48.2, 50.3, 52.3, 54.1, 57.2, 56.0, 53.7, 50.9, 50.7, 49.2, 46.1, 46 ,5, 45.0, 47.7, 49.7, 52.4, 55.0, 57.6, 56.1, 55.8,
- Composite PMI: 45.9, 46.4, 48.5, 50.6, 53.9, 54.2, 52.6, 50.7, 49.9, 49.0, 46.3, 45.1 , 45.7, 46.9, 48.1, 51.3, 53.7, 54.3, 55.1, 55.6.
09:00 EUR Eurozone manufacturing and services PMIs according to S&P Global. Eurozone Composite Manufacturing PMI according to S&P Global (preliminary release)
The Eurozone Manufacturing and Services PMIs are important indicators of the health of the entire European economy. A result above 50 is seen as positive and strengthens the EUR, while a resultbelow 50 as negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro.
Previous values:
- Manufacturing PMI: 43.1, 47.2, 42.7, 43.4, 44.8, 45.8, 47.3, 48.5, 48.8 (in January 2023),
- Services PMI: 47.8, 48.7, 50.9, 52.0, 55.1, 56.2, 55.0, 52.7, 50.8 (in January 2023),
- Composite PMI: 46.5, 47.2, 48.6, 52.8, 54.1, 53.7, 52.0, 50.3, 49.3 (in January 2023).
09:30 GBP UK manufacturing and services PMIs according to S&P Global. UK Composite Manufacturing PMI according to S&P Global (preliminary release)
The UK Manufacturing and Services PMIs are important indicators of the health of the UK economy. The services sector employs the majority of the UK’s working population and contributes approximately 75% of GDP. The most important part of the service industry is still financial services. If the data turns out to be worse than the forecast and the previous value, then the pound will most likely decline sharply in the short term. Data better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is considered as positive and strengthens the GBP, while a result below 50 is negative for the GBP.
Previous values:
- Manufacturing PMI: 44.8, 44.3, 45.3, 46.5, 47.1, 47.8, 47.9, 49.3, 47.0, 45.3, 46.5, 46 ,2, 48.4,
- Services PMI: 49.5, 49.3, 51.5, 53.7, 55.2, 55.9, 52.9, 53.5, 48.7, 49.9, 48.8, 48 ,8, 50.0, 50.9, 52.6,
- Composite PMI: 48.7, 48.5, 50.8, 52.8, 54.0, 54.9, 52.2, 53.1, 48.5 (in January 2023).
12:30 EUR Account of the ECB meeting on monetary policy
This document contains an overview of the current ECB policy with planned changes in the financial and monetary areas. The publication of this document may cause a surge in volatility in trading in the euro and on the European stock market.
Investors will be scrutinizing the minutes from the ECB’s October meeting for further signals on the outlook for monetary policy.
Recently, weak macro data from the Eurozone have been indicating a slowdown in the European economy, which, against the background of international trade conflicts, puts pressure on the ECB in making a decision to raise interest rates despite the high level of inflation.
Volatility in euro trading could rise sharply if the minutes contain unexpected statements or new information regarding the outlook for monetary policy.
21:45 NZD Retail sales (3rd quarter)
The Retail Sales Report is published by the New Zealand Bureau of Statistics. Changes in retail sales are generally considered an indicator of consumer spending. In general, a high value of the indicator is a positive factor for the NZD, and a low value is a negative factor. In the previous 2Q 2023, retail sales decreased by -1.0%, following a decline of -1.6% in 1Q, -0.6% in 4Q 2022. This is a negative factor for the NZD.
The NZD may strengthen if data turns out to be better than forecast or previous values. A weak report will have a negative impact on the NZD.
Friday, November 24
In the United States, working hours are shortened due to Thanksgiving. American trading platforms will be open from 9:30 to 13:00 (New York time) or from 15:30 to 19:00 (GMT).
14:45 USD Manufacturing and services PMI (from S&P Global) of the US economy. Composite PMI (preliminary releases)
PMIs in the most important sectors of the US economy by S&P Global are important indicators of the state of the American economy as a whole. A result above 50 is considered positive and strengthens the USD, while a resultbelow 50 is considered negative for the US dollar.
Previous PMI indicator values:
- Manufacturing PMI: 50.0, 49.8, 49.0, 46.3, 48.4, 50.2, 47.3, 46.9, 46.2, 47.7, 50.4, 52, 0.51.5
- Services PMI:: 50.6, 50.1, 52.3, 54.4, 54.9, 53.6, 50.6, 46.8, 44.7, 46.2, 47.8, 49, 3, 43.7, 47.3, 52.7, 53.4, 55.6.
- Composite PMI: 50.7, 50.2, 52.0, 53.2, 54.3, 53.4, 52.3, 50.1, 46.8 (in January 2023).
Price chart of EURUSD in real time mode
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