This week, the focus in the trading community was on key economic numbers, second wave of the coronavirus, and central bank decisions. Among the key economic numbers were the US and UK retail sales, UK inflation, and New Zealand GDP data. The Bank of England, Swiss National Bank, and Bank of Japan decided to leave interest rates unchanged. The BOE and BOJ decided to expand their QE purchases. Meanwhile, the number of coronavirus cases continued to rise in the United States and China. Let us look at the key events to watch in the economic calendar in the coming week.
The housing sector is an important field in the United States. These numbers tend to move the US dollar index, Dow Jones, and the S&P 500. On Monday, the National Association of Realtors will release the existing home sales numbers. Analysts expect the data to show that the numbers declined from the previous 4.33 million to 4.20 million. On Tuesday, we will then receive the New home sales numbers which are expected to grow from the previous 623k to 634k.
On Tuesday, Markit will release the flash manufacturing and service PMI data from most countries. This number is usually important because it shows the activities in the two sectors. Among the countries to watch will be Japan, Australia, France, Germany, and the US. We will also watch the eurozone PMIs. Most analysts expect that the PMI will show some progress but remain in contraction category. For example, analysts expect that the eurozone manufacturing PMI will improve from the previous 39.4 to 43.8.
The unstoppable rally of the South African rand has halted in the past few days. Indeed, the rand is one of the worst-performing currencies this week. In the coming week, we will receive several important numbers from South Africa that will move the USDZAR and GBPZAR pair. On Wednesday, the statistics office will release the consumer price index (CPI) data followed by producer price index (PPI) numbers on Thursday. We will also receive the South African unemployment rate data.
The coming week will not be as busy as this week about interest rates. On Tuesday, the New Zealand central bank will release its interest rate decision. While the RBNZ will likely leave interest rates unchanged, it could signal whether it is considering negative interest rates. Meanwhile, on Thursday, the Turkish central bank will deliver its rates decision, which will likely move the USDTRY pair. Analysts expect that the bank will pause on rate cuts in this meeting. That is because it has already slashed almost ten times this year.
Another thing to watch in the economic calendar will be the final reading of US GDP data and the durable goods orders. Analysts don’t expect much change in the GDP estimate. They expect that the economy declined by 5.0% in Q1 while the price index remained unchanged at 1.6%. Real consumer spending is expected to have dropped by 6.8%. On durable goods orders, analysts expect that these orders bounced back by 10.3% in May. These numbers will likely move the US dollar index.
Other numbers to watch will be the Swedish retail sales, PPI and household lending growth numbers that will come out on Friday. From Japan, we will receive consumer price index data from Tokyo. From the US, we will receive the personal income and spending number and consumer sentiment from the University of Michigan.
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