A Light Global Macroeconomic Calendar Today
A quiet calendar to start the week with no important events or reports scheduled for release today. In the UK, the only data due today is the Conference Board Leading Economic Index. However, the Brexit debate will continue to set the tone for the Pound.
However, do not underestimate this slow start to the week as it might be the calm before the big storm. This week is pivotal as four central banks are scheduled to present their monetary policy outlooks; the Bank of Japan, the US Federal Reserve (Fed), the Bank of England (BoE), and the Swiss National Bank, although market expectations dictate that none of them will act. Adding to this hype, there will also be a slew of economic releases from all around the globe.
Pound Sterling – UK Markets
The Pound has extended its losses against its major peers this morning as Brexit hangs over the British kingdom like the Sword of Damocles. The Conference Board Leading Economic Index for May is the only data point due for release in the UK today. The index dipped to a five-month low level in the previous month. A slew of key economic releases is scheduled throughout this week in Britain. However, it is not expected to influence the movement of the Pound to a large extent, given the proximity of the pivotal European Union referendum. Interestingly, the BoE will hold its pre-referendum monetary policy meeting towards the end of this week and may see the central bank hinting at what action it could take in the event of a Brexit vote.
On Friday, although British Eco-stats posted positive results, Sterling hit a fresh seven-week low against the greenback after a new poll showed that the majority of British people voted in favour of leaving the 28-nation bloc, thus limiting the Pound’s appeal.
US Dollar – US Markets
The greenback gained ground against most of its major peers on Friday following a better than expected outcome for the University of Michigan consumer confidence score in June. Last week, the Fed Chairwoman, Janet Yellen, had indicated that a significant increase in the US consumer spending is necessary in order to boost the nation’s second-quarter GDP growth. Separately, the US posted a budget deficit in May, driven by a continued rise in government spending and a decline in corporate profits that strained government revenues.
This week is of crucial importance for market participants all across the globe. The two-day FOMC meeting that will conclude this Wednesday is likely to keep investors on tenterhooks. While it is largely expected that the Fed will refrain from increasing the key interest rate this month, market participants will scrutinise the Fed’s updated economic forecast statement and press conference for further guidance on the overall path of monetary policy.
Euro – European Markets
The shared currency is trading higher against the US Dollar and the Pound in the morning session. The Euro zone economic calendar is devoid of any data today. Earlier in the session, the Bundesbank President, Jens Weidmann, indicated that the current monetary policy environment in the Euro zone requires no further easing and that the ECB needs to give its existing policy some time to work. Looking ahead, there are a string of important data points scheduled for release this week in the Euro region, namely the Euro zone's industrial production, trade balance and consumer price index data, along with the ECB’s Economic Bulletin.
On Friday, the Euro declined against the greenback but made major strides against the Sterling. Gains against the Pound stemmed from the result of the most recent polls which suggested that the majority of British people were inclined towards a Brexit. On the data front, the final estimate of German consumer prices did not deviate from the previous figures and was largely in line with investor expectations.
Other Currencies – Highlights
The Canadian Dollar is trading lower against the greenback this morning. Moving ahead, the most important data point for Canada this week is the nation’s consumer price index for May. Inflation levels remain very low and it is a major concern for the Bank of Canada (BoC). Apart from this, Canada’s existing home sales data for May and a speech by the BoC Governor, Stephen Poloz, is also scheduled this week.
On Friday, data showed that Canada’s jobless rate dropped to an almost one-year low level in May. However, the Canadian Dollar failed to exhibit this optimistic news, as the commodity-linked currency was restrained by a second consecutive day of decline in oil prices. Canada’s job market bounced back to life last month as the unemployment rate surprisingly fell to 6.9%. Further, the Canadian economy witnessed a surge in job creation, led by new jobs in the public administration and construction sector.