Review of the main events of the Forex economic calendar for the next trading week (18.10.2021 – 24.10.2021)

The dollar closed last week in the negative territory with a 0.2% decline. But for the American stock indices, the week was successful. Stock indices rose for the second week in a row.

According to the minutes of the September meeting published on Wednesday, the leaders of the US central bank are ready to begin the gradual curtailment of the quantitative easing program, under which the Fed makes monthly purchases of Treasury bonds and mortgage-backed securities in the amount of $120 billion. As the Fed Chairman Jerome Powell said at a press conference on September 22, the central bank notes that bond purchases may be cut “at the next meeting,” which is in November. However, the minutes also show that only half of the 18 Fed executives expect interest rates to rise by the end of 2022.

The American economy created about 4.9 million jobs through September, which helped restore about half of the jobs lost during the pandemic; the unemployment rate fell to 4.8% in September (from 5.2% in August and 5.9 % in June). Given the significantly higher consumer inflation, this is enough to start cutting back on the Fed’s bond purchases, but not enough to start raising interest rates.

On the one hand, the Fed’s policy is still soft, given the ultra-low interest rate, on the other hand, the reduction in the volume of purchases of bonds will also means a reduction in the dollar liquidity on the financial market, which should contribute to the strengthening of the dollar.

Now market participants will carefully study the macro statistics from the US ahead of the November (November 2-3) Fed meeting in order to assess the extent of the expected reduction in the volume of existing stimuli and to better understand the Fed’s intentions regarding its future plans.

Next week, financial market participants will pay attention to the publication of important macro statistics from China, the UK, the USA, Germany, Eurozone, and Canada.

*during the coming week, new events may be added to the calendar and / or some scheduled events may be canceled

**GMT time

Monday, October 18

02:00 CNY China GDP for the 2nd quarter. Retail Sales Index

The National Bureau of Statistics of China will present data on GDP growth in the 3rd quarter of 2021. In the 2nd quarter of 2020, China’s GDP grew by +11.5% (+3.2% in annual terms), in the 3rd – by 2.7% (+4.9%, respectively), after a decrease by -6.8% (-9.8% YoY) in the 1st quarter. China’s GDP is expected to grow +0.5% (+5.2% y/y) in the 3rd quarter of 2021, after growing +1.3% (+ 7.9% y/y) in the 2nd m quarter and +0.6% (+18.3% in annual terms) in the 1st quarter of 2021.

China is the largest buyer of raw materials and a supplier of the widest range of finished products to the world commodity market. China’s economy is already the first in the world, according to many sources, pushing the American economy to second place. Therefore, the publication of important macroeconomic indicators from China can have a strong impact on the entire financial market.

The relative decline in GDP may negatively affect the yuan quotes, as well as the quotes of commodity currencies and currencies of the Asia-Pacific region, since it may indicate a slowdown in the growth rate of the Chinese economy.

The growth of the indicator will have a positive effect on the Chinese yuan, as well as on the world, primarily Asian stock indices, as well as on the quotes of commodity currencies such as the New Zealand and Australian dollars. China is the…

Source link