Wednesday 02 November Germany. Index (PMI) of business activity in the manufacturing sector (final release) This S&P Global report is an analysis of a survey of 800 purchasing managers that asks respondents to rate the relative level of business conditions, including employment, production, new orders, prices, supplier shipments and inventory. Since purchasing managers have perhaps the most up-to-date information on the situation in the company, this indicator is an important indicator of the state of the German economy as a whole. This sector of the economy forms a significant part of Germany's GDP. A result above 50 is considered positive and strengthens the EUR, below 50 is considered negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro. Previous values: 47.8, 49.1, 49.3, 52.0, 54.8, 54.6, 56.9, 58.4, 59.8, 57.4, 57.4, 57.8 , 58.4, 62.6. The preliminary value was 45.7. The level of influence on the markets (final release) is average. Eurozone. Index (PMI) of business activity in the manufacturing sector (final release) The Eurozone Manufacturing PMI (from S&P Global) is an important indicator of the state of the entire European economy. A result above 50 is considered positive and strengthens the EUR, below 50 is considered negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro. Previous values: 48.4, 48.9, 49.8, 52.1, 54.6, 56.5, 58.2. The preliminary value was 46.6. The level of influence on the markets (final release) is average. USA. ADP Private Sector Employment Report ADP will present the monthly report on employment in the private sector of the US economy in October. This report usually has a strong impact on the market and dollar quotes, although, as a rule, there is no direct correlation with Non-Farm Payrolls. Strong data has a positive effect on the dollar; a decrease in the indicator can negatively affect it. In any case, during the release of this report, there may be an increase in volatility in the market and, above all, in dollar quotes. Previous values: 208,000 in September, 185,000 in August, 270,000 in July, 358,000 in May, 457,000 in April, 425,000 in March, 375,000 in February, 372,000 in January 2022. The level of influence on the markets is medium to high. USA. The Fed's interest rate decision. Fed Commentary on Monetary Policy The level of interest rates is the most important factor in assessing the value of a currency. Most other economic indicators are only looked at by investors to predict how rates will move in the future. The Fed is widely expected to raise interest rates again by 75 bps (up to 4.00%) and, possibly, will announce plans for its further increase, and Fed Chairman Jerome Powell will explain the decision. Market participants expect the US central bank to accelerate the tightening cycle of monetary policy. However, what will happen after the November meeting is not entirely clear. During the announcement of the Fed's decision, volatility in the market usually increases sharply, primarily in the US stock market and in dollar quotes. Powell's comments could affect both short-term and long-term USD trading. A more hawkish stance on the Fed's monetary policy is seen as positive and strengthens the US dollar, while a more cautious stance is seen as negative for the USD. Investors want to hear Powell's opinion on the Fed's plans for this year. The level of influence on the markets is high. USA. FOMC (Open Market Committee) press conference The press conference of the Federal Open Market Committee is used by the Fed to communicate with investors regarding monetary policy. It examines the factors that influenced recent interest rate decisions and comments on the economic environment in which the decision was made. The FOMC press conference lasts about an hour and consists of two parts. The first part reads the ruling, followed by a series of questions from invited members of the press and answers from the leadership of the Fed. Almost always, the course of the Fed's press conference (after the meeting on monetary policy) is accompanied by an increase in volatility in the markets, primarily in dollar quotes and US stock market instruments. The level of influence on the markets is high. Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325632

  The last full trading week of October has ended, extremely volatile, during which meetings of three largest world central banks (Canada, eurozone, Japan) took place at once. If the decisions taken by the European Central Bank (ECB) and the Bank of Japan (BOJ) on interest rates coincided with market expectations, then the Bank of Canada made an unexpected decision, surprising investors. The central bank raised its interest rate by 50 basis points to 3.75%, although markets had expected a 75 bps hike. The decision, which appears to have been fueled by growing concerns about the threat of a slowdown in the Canadian economy and a deepening global recession, disappointed market participants and sent the Canadian dollar sharply weaker. Moreover, the head of the bank, Tiff Macklem, said that the central bank is nearing the end of the tightening phase, although further interest rate hikes are still possible. Next week, market participants will focus on two main and key events: the Federal Reserve (Fed) meeting and the release on Friday of the monthly report of the US Department of Labor for October. In addition, the Reserve Bank of Australia (RBA) and the Bank of England (BoE) will also hold their meetings on monetary policy issues. A lot of important macro statistics for China, Germany, the eurozone, Canada, New Zealand, and the USA will also be published. In other words, the coming week will be even more volatile. But it also carries a ton of trading opportunities. Take note that next week European countries are switching to winter time: in the trading terminals of forex brokers and in the economic calendar, the time will be shifted back by 1 hour. Monday 31 October Australia. Retail sales level The Retail Sales Level Index is the main indicator of consumer spending, which accounts for the majority of overall economic activity. It is also considered an indicator of consumer confidence and reflects the state of the retail sector in the short term. The growth of the index is usually a positive factor for the AUD; a decrease in the indicator and worse-than-expected data are negative. Previous index values: +0.6%, +1.3%, +0.2%, +0.9%, +0.9%, +1.6%, +1.8%, +1.8 % (in January 2022). September forecast: -0.2%. The level of influence on the markets is average. China. Chinese Federation of Logistics and Purchasing PMI (CFLP) business activity indexes in the manufacturing and services sectors of the Chinese economy This report is an analysis of a survey of 3,000 purchasing managers, in which respondents are asked to rate the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries, and inventory. Purchasing managers have perhaps the most up-to-date information about the situation in the company, so this indicator is an important indicator of the state of the Chinese economy as a whole. Since the Chinese economy is, according to various estimates, the first in the world (at the moment), Chinese macro data can have a big impact on the financial market and investor sentiment, especially on the markets of the Asia-Pacific region. Data above 50 indicates an increase in activity. The relative growth of the index and values above 50 should have a positive impact on the CNY. Previous values: 50.1, 49.4, 49.0, 50.2, 49.6, 47.4, 49.5, 50.2, 50.1 (in January 2022) for manufacturing PMI , and 50.6, 52.6, 53.8, 54.7, 47.8, 41.9, 48.4, 51.6, 51.1 (in January 2022) for Services PMI. Forecast for October: 49.2 and 51.9, respectively. The level of influence on the markets is medium to high. Germany. Retail sales The statistical office of Germany will publish a report with data on retail sales. The change in the indicators of the report on retail sales affects the indicator of consumer spending, indirectly indicating the state of the German economy and the level of income of citizens. The German economy is the locomotive of the entire European economy. Therefore, euro quotes are very sensitive to the release of important macro statistics for Germany. A high result usually strengthens the euro, and vice versa, a low result weakens it. Data better than the forecast and/or the previous value is likely to have a positive impact on the euro, but - in the short term. Previous values: -1.3% (-4.3% YoY), +1.9% (-2.6% YoY), -1.5% (-9.6% YoY) , +1.2% (+1.1% YoY), -5.4% (-0.4% YoY), +0.9% (-1.7% YoY), + 0.2% (+6.9% YoY), -0.2% (+10.1% YoY) in January 2022. September forecast: -0.4% (annualized). The level of influence on the markets is medium to high. Eurozone. GDP for the 3rd quarter (preliminary estimate). Consumer Price Indices in the eurozone (preliminary release) Eurostat will publish a report with preliminary data on eurozone GDP for the 3rd quarter. There are three versions of the quarterly GDP, published at intervals of approximately 20 days - Preliminary, Updated, Final (final release). The pre-release is the earliest and therefore tends to have the most impact on the markets. This report reflects the general economic performance of the eurozone countries and has a significant impact on the decision of the ECB on monetary policy. GDP growth means an improvement in economic conditions, which makes it possible (with a corresponding increase in inflation) to tighten monetary policy, which, in turn, usually has a positive effect on national currency quotes. This report usually causes an increase in volatility in EUR quotes. It is likely that the release of the report with data on eurozone GDP for the 3rd quarter will be released with positive indicators. Data worse than forecast/previous values will have a negative impact on EUR quotes. Previous values: +0.8% (+4.1% YoY) in Q2 2022, +0.6% (+5.4% YoY in Q1 2022), + 0.3% (+4.6% YoY) in Q4, +2.2% (+3.9% YoY) in Q3, +2.2% (+14, 3% YoY) in Q2 and a -0.3% drop (-1.3% YoY) in Q1 2021. The level of influence on the markets is medium to high. The Consumer Price Index (CPI) determines the change in prices in a certain basket of goods and services over a given period, being a key indicator for assessing inflation and changing consumer preferences. In the core consumer price index (Core Consumer Price Index, Core CPI), food and energy are excluded from the calculation for a more accurate estimate. Estimating the level of inflation is important for the management of the central bank in determining the parameters of the current monetary policy. A reading lower than forecast/previous could trigger a weaker euro as low inflation forces the ECB to stay loose on monetary policy. Conversely, rising inflation and its high level will put pressure on the ECB to tighten its monetary policy, which in normal economic conditions is assessed as a positive factor for the national currency. Previous CPI values (annualized): +9.9%, +9.1%, +8.9%, +8.6%, +8.1%, +7.4%, +7.4 %, +5.9%, +5.1% (in January 2022). Previous Core CPI values (annualized): +4.8%, +4.3%, +4.0%, +3.7%, +3.8%, +3.5%, +3, 0%, +2.7%, +2.3% (in January 2022). The level of influence on the markets (preliminary assessment) is high. Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325632

With the National Bank of Hungary switching to a "whatever it takes" approach to ensure stability, we expect the base rate to remain unchanged at 13%, while the effective rate should remain at 18%. In Poland, data on money supply and unemployment will be in focus  In this article Poland: Cash in circulation continues to decline, unemployment remains unchanged Hungary: Base rate is expected to remain unchanged at 13% Source: Shutterstock   Poland: Cash in circulation continues to decline, unemployment remains unchanged Money supply (7.3% year-on-year): We estimate that money supply (M3) went up by 7.3% YoY in September vs. a 7.4% YoY increase in October. Both household deposit and corporate deposit growth are projected to increase in annual terms. At the same time, loans to households are very poor as mortgage loans are in free fall, whereas loans to enterprises are expanding robustly (mostly current loans). We forecast that cash in circulation continued to see a monthly decline. Registered unemployment (4.8%): We project registered unemployment to have remained unchanged at 4.8% in September. The economy is slowing, albeit gradually, and demand for labour remains solid. Tight labour markets and shortages of skilled workers are making businesses reluctant to lay off staff which may be difficult to re-employ later on. We expect labour hoarding during the current downturn to be substantial. Hungary: Base rate is expected to remain unchanged at 13% The National Bank of Hungary held an emergency meeting in mid-October, switching to a ‘whatever it takes’ approach. We expect the central bank to maintain this new modus operandi to ensure market stability. This means no material change in the monetary policy set-up at the upcoming regular rate-setting meeting. We expect the base rate to remain unchanged at 13%, while the effective rate (the new overnight deposit quick tenders rate) should remain at 18%. In addition to monetary policy, the focus will be on labour market data. With more and more companies giving one-off support to their employees or raising wages to mitigate the impact of the cost-of-living crisis, we expect an acceleration in wage growth. On the other hand, some companies are reacting to rising energy bills with cost-saving steps, translating into a higher unemployment rate. Key events in EMEA next week Source: Refinitiv, ING This article is part of Our view on next week’s key events   View 3 articles TagsPoland Hungary EMEA Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Regional PMI reports and industrial output data are the highlights of the coming week Source: Shutterstock Regional PMI readings: weak manufacturing PMI is expected China’s PMI is expected to follow the declining trajectory of the previous months. The worrying amount of Covid cases in China led to the tightening of measures in multiple cities including in the tech hub of Shenzhen, as well as a weeks-long lockdown in Chengdu. This could contribute to falls in orders, employment and business confidence, leading to the Caixin Manufacturing PMI and NBS non-manufacturing PMI falling for the fourth straight month. The impact of the economy might be cushioned for large-scale and state-owned firms surveyed in the NBS manufacturing PMI as orders and input costs for these companies are stable and business sentiment is less affected, contrary to that of private companies.  In Japan, we believe that the reopening of the economy is likely to support service sector activity. Thus, the composite PMI is expected to rebound mainly on a rise in the services PMI while the manufacturing PMI continues to fall. In Korea, local business surveys are due to be released next week, and these are expected to deteriorate amid several headwinds, such as high interest rates both at home and abroad, production disruptions at major steel factories due to typhoons, and poor performance expectations in the semiconductor sector. The recent depreciation of the Korean won probably played a role in worsening the sentiment as well. Regional industrial production data points to a slowdown Japan, Korea, and Singapore will release their August industrial production data next week which will suggest a slowdown in manufacturing activity throughout the Asian region. In Japan, despite a boost from the reopening, industrial production in August is expected to take a breather and decline moderately after a strong gain over the past two months. South Korea's industrial production is expected to contract more intensely on the back of weak output from automobiles and IT/semiconductors. In Singapore, we also expect a modest monthly decline as the manufacturing PMI fell in August. However, as the material shortage situation has improved since June, the magnitude of the decline should be smaller than in the previous month.  India's repo rate The Reserve Bank of India will meet on 30 September to discuss interest rates. It is likely the Bank will hike its key repo rate by 30bp to 5.7%. As inflation rose from 6.7% in July to 7% in August, policymakers should continue to feel the pressure and increase repo rates in an attempt to cool the economy. Asia Economic Calendar Source: Refinitiv, ING Read this article on THINK TagsAsia week ahead Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Despite the Central Bank of Turkey implying in its forward guidance that further rate cuts are ahead, we believe it will keep the policy rate unchanged for now to assess the impact of recent moves. For Poland, we forecast that unemployment will remain at 4.9% whilst PPI inflation will decline to 24.5% In this article Turkey: Expecting the CBT to keep rates unchanged this month Poland: Key data for the week ahead Hungary: Further widening of the current account deficit Source: Shutterstock   Turkey: Expecting the CBT to keep rates unchanged this month While the Central Bank of Turkey (CBT) cut the policy rate last month in a surprise move, it did issue forward guidance implying further rate cuts were ahead, citing some loss in economic momentum. The CBT moves will likely be determined by FX developments, as the tourism season comes to end, as well as the growth outlook. We expect the CBT to keep the policy rate unchanged this month to see the impact of recent moves, though the risks are on the downside. Poland: Key data for the week ahead Industrial output: Annual growth of industrial production moderated to a single-digit pace in July (7.6%), but is projected to improve somewhat in August (9.8%) amid the less negative impact of the number of working days in year-on-year terms. The output should be supported by shorter summer production halts in the automotive industry and house appliances plants. Electricity production was also rather solid. Output was reduced in some energy-intensive industries due to the soaring price of natural gas. PPI inflation: We forecast that PPI inflation declined to 24.5%YoY in August from 24.9%YoY in July as prices in the manufacture of coke and refined petroleum products eased. Annual growth of metal products manufacture also declined. Unless we see yet another upswing in energy and industrial commodities, the producers’ prices should continue to decline. We believe that the peak is most likely behind us. Enterprise wages: In July, enterprise wages jumped up by 15.8%YoY boosted by one-off payments and compensations for high inflation in the mining, energy and foresting sectors. In August, growth is expected to be lower, albeit still at a double-digit level. Nevertheless, real wages in the enterprise sector are projected to turn negative again. The labour market remains tight, which is what drives wages upwards. Enterprise employment: Average paid employment went up by 2.3%YoY in July, with the number of posts increasing by 11,000 people versus the previous month. In August we expect a seasonal decline, but smaller than last year, which should drive annual employment growth up to 2.4%YoY. Despite signs of slowing activity, particularly in industry and construction, demand for labour remains solid, especially in services. Unemployment rate: The labour market is drained from skilled workers and even the inflow of refugees from Ukraine that have assimilated quite well and are active in the labour market is not putting upward pressure on the unemployment rate so far. Since January the number of unemployed people is on a downward path and the registered unemployment rate is projected to remain at 4.9% for the second month in a row in April. Hungary: Further widening of the current account deficit The National Bank of Hungary will release the second quarter current account balance and it is expected to be in the same ballpark that we saw during the first quarter. A roughly €2tr deficit is the result of the rising energy bill of the country, deteriorating the balance of goods in an extreme manner. An early estimation of the July balance suggests further widening of the current account deficit. When it comes to the labour market, we see wage growth accelerating further, as the price-wage spiral has started. More and more companies have announced extra compensation for employees (either one-off or mid-year salary hikes) in the last couple of months, which will be visible in the wage statistics as well. On the other hand, the news has also been about companies planning redundancies in the future (various surveys put the share of these corporates between 25-50%), thus we won’t be surprised if the unemployment rate reflects that development, moving a bit higher compared to the previous month. Key events in EMEA next week Source: Refinitiv, ING TagsTurkey Poland industrial production Hungary EMEA   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

In the coming week, several central banks will meet to discuss policy with inflation in the spotlight Source: Shutterstock Content The week ahead: Central bank super Thursday The BoJ meeting RBA meeting minutes Philippines and Indonesia policy meetings Inflation out from Japan and Singapore The week ahead: Central bank super Thursday It’s a busy week for central banks next week. The Bank of Japan (BoJ) will meet to possibly discuss currency intervention measures, while the Reserve Bank of Australia (RBA) releases minutes from its meeting in September. Meanwhile, the central banks of the Philippines and Indonesia will meet on Thursday to discuss rate hikes in order to slow above-target inflation. The BoJ meeting The BoJ will meet on 22 September and this meeting will likely be the highlight of the week. Given recent warnings about FX movements, markets will be looking for clues as to how the BoJ will respond to volatile currency movements and how it will justify its ultra-low policy to support the country’s economy. RBA meeting minutes The RBA will release its minutes from the September meeting. The meeting should have provided more clarity on the pace of tightening from here on, given the recent speech from Governor Philip Lowe that seemed to suggest some slowdown was imminent. Philippines and Indonesia policy meetings Bangko Sentral ng Pilipinas (BSP) meets on Thursday to determine policy. We expect BSP to hike by 50bp in a bid to slow inflation which has moved past the target. The central bank will likely retain its hawkish tone and signal additional rate hikes for the rest of the year with inflation still expected to breach the BSP’s inflation target for the year. Bank Indonesia (BI) surprised markets with a rate hike at its August meeting and we can’t rule out another surprise next week. We expect BI to hike 50bp when it meets on Thursday. Headline inflation has just recently moved past the central bank’s target and we can expect this trend to continue after its fuel price hike. BI Governor Perry Warjiyo, however, did rule out “jumbo-sized” rate hikes, possibly referring to the 75bp rate hikes carried out by the Fed. Inflation out from Japan and Singapore August inflation is set for release on Friday and we expect inflation to heat up to 7.2% year-onyear driven by both demand and supply-side factors. More importantly, core inflation, the measure of price gains more closely monitored by the Monetary Authority of Singapore (MAS), could move past 5% YoY and prod further tightening by the central bank in October. Meanwhile, we expect the August CPI inflation in Japan to rise further to near 3% YoY given the low base last year. The monthly gain should slow as import prices and producer prices fell recently mainly due to the decline in global energy prices. Asia Economic Calendar Source: Refinitiv, ING Read full article on ING Economics: Key events in EMEA next week | Article | ING Think TagsTurkey Poland industrial production Hungary EMEA Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Next week's US inflation numbers will need to be quite surprising for the Fed to deviate from a 75bp hike at its September meeting. The Bank of England's scheduled meeting has been postponed, and instead the focus will be on several pieces of key UK data In this article US: Core inflation likely to rise to 6.1% UK: Bank of England to stick to 50bp rate hike despite energy package Source: Shutterstock Article updated on 9 September to reflect the postponement of the Bank of England's scheduled meeting US: Core inflation likely to rise to 6.1% We have the last full week of economic data ahead of the September Federal Open Market Committee (FOMC) meeting, but it will take some surprising numbers to make the Fed deviate from a third consecutive 75bp rate hike. After all, the economy is posting decent growth, creating jobs in significant numbers, and Fed Chair Jerome Powell is arguing that “we need to act now, forthrightly, strongly as we have been doing and we have to keep at it until the job is done”. The data includes CPI, which should show headline inflation being depressed by lower gasoline prices, but core inflation is likely to rise to 6.1% from 5.9%. Retail sales should post flat growth, but remember this is a nominal figure and those falling gasoline prices will be a major drag. Real consumption is likely to be up in the third quarter. We also expect manufacturing output to grow further. The deteriorating global outlook and weakening domestic housing market combined with the cumulative impact of policy tightening and the strong dollar means we think the Fed will moderate its hiking to 50bp in November and 25bp in December. Weaker wage pressure and more limited month-on-month increases in CPI thanks to lower import and other input costs would certainly help this argument. UK: Bank of England to stick to 50bp rate hike despite energy package The United Kingdom will observe a period of mourning following Queen Elizabeth II’s death on Thursday, and Parliament will be adjourned during this time. The Bank of England's scheduled meeting has also now been postponed to the following week, but the ONS has confirmed that several pieces of important data will still be released. Here's what we expect: July GDP (Monday): Expect a large bounce-back from June, where the addition of an extra bank holiday artificially distorted the monthly GDP numbers. Depending on the arrangements during the period of mourning, the addition of an extra bank holiday in September is possible, and this would factor into the GDP numbers for the current month. We’ll therefore have to wait until the fourth quarter to get a clearer idea of how the economy is faring in GDP terms, and we suspect there’s still a risk of a negative growth figure. However, the announcement of an energy price guarantee by the government considerably reduces the risk of a deep downturn, and potentially also a technical recession. Jobs (Tuesday): Hiring demand is falling, though recent data and surveys have suggested that the worker shortages plaguing the jobs market have only improved slightly over recent months. The announcement of an energy price cap for businesses should help limit what otherwise could have been a more immediate rise in redundancies as firms’ costs increased. We expect the unemployment rate to remain stable next week, but we’ll also be watching closely for signs of a more pronounced return of inactive workers to the jobs market. Inflation (Wednesday): A 6% fall in petrol/diesel prices through August will drag headline inflation slightly lower. That doesn’t mean we’re past the peak, though the introduction of the energy price cap means inflation is less likely to materially surpass 11% in the autumn. Without the cap, we’d forecast inflation would go to 16% or above in January. This is a double-edged sword for the BoE. On one hand, the reduced the peak in headline inflation should ease concerns about consumer inflation expectations becoming even less anchored. That points to another 50bp rate hike when the BoE meets later in September, despite the Fed and ECB going more aggressively. The BoE has shown in past meetings that it isn’t pressured to follow those other central banks, albeit the hawks will be worried about the recent slide in sterling. They will also argue that the government’s action increases the risk of inflation staying elevated in the medium-term, given the reduced risk of recession, Some members are therefore likely to vote for a 75bp hike at the next meeting. But ultimately with a lot already priced into markets for the BoE, policymakers will be wary about adding fuel to the fire. As we saw with the ECB on Thursday, the decision to go with a 75bp hike saw markets price that as the default move at the next meeting. Key events in developed markets next week Source: Refinitiv, ING This article is part of Our view on next week’s key events View 3 articles   TagsUS Bank of England   Read this article on ING Economics   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more    

  The dollar first jumped sharply and then fell almost as sharply after Federal Reserve Chairman Jerome Powell said last Friday that "the Fed should continue like this until the job is done," meaning that "the main focus is on the return of inflation to the target level of 2%. But in the end, the dollar resumed growth: one way or another, Powell confirmed the intention of the Fed to defeat high inflation. It should be noted, by the way, that in July annual inflation in the US did decline from the 40-year high of 9.1% reached in June. Although "the decision to raise the rate in September will depend on the aggregate data from the July meeting", and "at a certain point, as the policy tightens further, it will be advisable to slow down the pace of rate hikes", "the central bank purposefully moves the policy to a fairly tight level, to bring inflation back to 2%," Powell added. And this means that the Fed will continue to act decisively to return the inflation rate to 2.0%, i.e. continue to tighten monetary policy, and this is a serious argument in favor of further growth of the dollar. As always, a number of important macroeconomic data and a number of important news are expected to be published during the new trading week. It is also worth noting that changes may be made to the economic calendar during the coming week. Monday, 29 August The End of Summer Holiday in most of the UK. Banks and stock exchanges of the country do not work on this day, which will affect the trading volumes during the European trading session: they will be lower than usual. Australia. Retail sales level The Retail Sales Level Index is the main indicator of consumer spending, which accounts for the majority of overall economic activity. It is also considered an indicator of consumer confidence and reflects the state of the retail sector in the short term. The growth of the index is usually a positive factor for the AUD; a decrease in the indicator and worse-than-expected data are negative. Previous index values: +0.2%, +0.9%, +0.9%, +1.6%, +1.8%, +1.8% (in January 2022). Forecast for July: +0.3%. The level of influence on the markets is average. Tuesday, 30 August Germany. Harmonized Consumer Price Index HICP (Advance release) Consumer prices account for the bulk of overall inflation. Under normal economic conditions, rising prices force the country's central bank to raise interest rates in order to avoid excessive inflation (above the target level of the central bank). One of the dangerous periods of the economy is stagflation. This is rising inflation in a slowing economy. In this situation, the central bank must act very carefully so as not to harm the recovery of economic growth. The index (CPI) is published by the EU Statistics Office, is an indicator for assessing inflation and is used by the Governing Council of the European Central Bank to assess the level of price stability. Usually, a positive result strengthens the EUR, a negative one weakens it. The growth of the indicator is a positive factor for the national currency (under normal conditions). Data worse than the previous value and/or forecast will negatively affect the euro. Previous indicator values: +8.5% in July, +8.2% in June, +8.7% in May, +7.8% in April, +7.6% in March, +5.5% in February, +5.1% in January 2022 (annualized). Forecast for August: +8.7% in August (according to preliminary estimate) The level of influence on the markets is medium to high. USA. Consumer Confidence Index This document is a report by the Conference Board of a survey of approximately 3,000 US households that asks respondents to assess the level of current, future economic conditions and the overall economic situation in the United States. The confidence of American consumers in the economic development of the country and in the stability of their economic situation is a leading indicator of consumer spending, which accounts for a large part of overall economic activity. A high level of consumer confidence indicates growth in the economy, while a low level indicates stagnation. The previous value of the indicator is 95.7. An increase in the indicator will strengthen the USD, and a decrease in the value will weaken the dollar.The level of influence on the markets is medium to high. Wednesday, 31 August China. Chinese Federation of Logistics and Procurement PMI (CFLP) business activity indexes in the manufacturing and services sectors of the Chinese economy This report is an analysis of a survey of 3,000 purchasing managers, in which respondents are asked to rate the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries, and inventory. Purchasing managers have perhaps the most up-to-date information about the situation in the company, so this indicator is an important indicator of the state of the Chinese economy as a whole. Since the Chinese economy is, according to various estimates, the first in the world (at the moment), Chinese macro data can have a big impact on the financial market and investor sentiment, especially on the markets of the Asia-Pacific region. Data above 50 indicates an increase in activity. The relative growth of the index and values above 50 should have a positive impact on the CNY. Previous values: 49.0, 49.6, 47.4, 49.5, 50.2, 50.1 (in January 2022) for manufacturing PMI, and 53.8, 47.8, 41, 9, 48.4, 51.6, 51.1 (in January 2022) for Services PMI. Forecast for August: 49.2 and 52.2, respectively. The level of influence on the markets is medium to high. Eurozone. Consumer Price Indices in the eurozone (preliminary release) The Consumer Price Index (CPI) determines the change in prices in a certain basket of goods and services over a given period, being a key indicator for assessing inflation and changing consumer preferences. In the core consumer price index (Core Consumer Price Index, Core CPI), food and energy are excluded from the calculation for a more accurate assessment. Estimating the level of inflation is important for the management of the central bank in determining the parameters of the current monetary policy. A reading lower than forecast/previous could trigger a weaker euro as low inflation forces the ECB to stay loose on monetary policy. Conversely, rising inflation and its high level will put pressure on the ECB to tighten its monetary policy, which in normal economic conditions is assessed as a positive factor for the national currency. Previous CPI values (annualized): +8.9%, +8.6%, +8.1%, +7.4%, +7.4%, +5.9%, +5.1 % (in January 2022). Previous Core CPI values (annualized): +4.0%, +3.7%, +3.8%, +3.5%, +3.0%, +2.7%, +2, 3% (in January 2022). Forecast for August 2022: +9.0% (annualized) and +4.1%, respectively. The level of influence on the markets is medium to high. USA. ADP Private Sector Employment Report ADP will present the monthly report on employment in the private sector of the US economy in August. This report usually has a strong impact on the market and dollar quotes, although, as a rule, there is no direct correlation with Non-Farm Payrolls. Strong data has a positive effect on the dollar; a decrease in the indicator can negatively affect it. In any case, during the release of this report, there may be an increase in volatility in the market and, above all, in dollar quotes. Previous values: 128,000 in May, 202,000 in April, 249,000 in March, 601,000 in February, 512,000 in January 2022. Forecast for August: +200,000. The level of influence on the markets is medium to high. Canada. GDP This Statistics Canada report is the broadest indicator of economic activity and the main indicator of the state of the economy. High GDP figures will have a positive impact on the CAD quotes, and, conversely, a weak GDP report will have a negative impact on the CAD. Previous reports came out with values of +3.1% in the 1st quarter of 2022, +6.7% in the 4th quarter, +5.5% in the 3rd quarter of 2021. Forecast for the 2nd quarter of 2022: +4.3%, which in general should have a positive impact on CAD quotes. Despite the relative decline, the data suggests that the Canadian economy is still recovering after its strong fall in early 2020 due to the coronavirus pandemic (in the 1st quarter of 2020, Canada's GDP fell by -8.6%, and in the 2nd -44.2%). Better-than-expected data will also have a positive impact on CAD. Thursday, 01 September Germany. Retail sales The statistical office of Germany will publish a report with data on retail sales. The change in the indicators of the report on retail sales affects the indicator of consumer spending, indirectly indicating the state of the German economy and the level of income of citizens.The German economy is the locomotive of the entire European economy. Therefore, euro quotes are very sensitive to the release of important macro statistics for Germany.A high result usually strengthens the euro, and vice versa, a low result weakens it. Data better than the forecast and/or the previous value is likely to have a positive impact on the euro, but - in the short term.Previous values: -1.6% (-8.8% y/y), +0.6% (-3.6% y/y), -5.4% (-0.4% y/y) , -0.1% (-2.7% y/y), +0.3% (+7.0% y/y), +2.0% (+10.3% y/y) in January 2022.Forecast for July: +0.2% (-8.0% in annual terms),The level of influence on the markets is medium to high. Germany. Index (PMI) of business activity in the manufacturing sector (final release) This S&P Global report is an analysis of a survey of 800 purchasing managers that asks respondents to rate the relative level of business conditions, including employment, production, new orders, prices, supplier shipments and inventory. Since purchasing managers have perhaps the most up-to-date information on the situation in the company, this indicator is an important indicator of the state of the German economy as a whole. This sector of the economy forms a significant part of Germany's GDP. A result above 50 is considered positive and strengthens the EUR, below 50 is considered negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro.Previous values: 49.3, 52.0, 54.8, 54.6, 56.9, 58.4, 59.8, 57.4, 57.4, 57.8, 58.4, 62.6 The level of influence on the markets (final release) is average. Eurozone. Composite index (PMI) of business activity in the manufacturing sector (final release) The Eurozone Manufacturing PMI (from S&P Global) is an important indicator of the state of the entire European economy. A result above 50 is considered positive and strengthens the EUR, below 50 is considered negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro. Previous values: 49.8, 52.1, 54.6, 56.5, 58.2. The level of influence on the markets (final release) is average. UK. Index (PMI) of business activity in the manufacturing sector (final release) The UK Manufacturing PMI (from S&P Global) is an important indicator of the health of the UK economy. If the data turns out to be worse than the forecast and the previous value, then the pound is likely to fall 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 positive and strengthens the GBP, below 50 is considered negative for the GBP.Previous values: 52.1, 52.8, 54.6, 55.8, 55.2, 58.0, 57.3.The level of influence on the markets (final release) is average. USA. Unemployment claims The US Department of Labor will publish a weekly report on the state of the US labor market with data on the number of primary and secondary claims for unemployment benefits. The state of the labor market (together with data on GDP and inflation) is a key indicator for the Fed in determining the parameters of its monetary policy.The result is higher than expected and the growth of the indicator indicates the weakness of the labor market, which negatively affects the US dollar. The drop in the indicator and its low value is a sign of the recovery of the labor market and may have a short-term positive impact on the USD.Initial and re-claims are expected to remain at pre-coronavirus lows, which is also positive for the dollar, indicating the stability of the US labor market.Previous (weekly) figures for initial jobless claims: 250,000, 252,000, 248,000, 254,000, 261,000, 244,000, 235,000, 231,000, 232,000, 202,000, 211,000Previous (Weekly) Values for New Jobless Claims Data:1,437,000, 1,430,000, 1,420,000, 1,368,000, 1,384,000, 1,333,000, 1,372,000, 1,324,000, 1,331,000, 1,309,000, 1,309,000 The level of influence on the markets is medium to high. Canada. Business activity index (PMI) in the manufacturing sector The monthly S&P Global report publishes (among other data) the PMI in the manufacturing sector of the Canadian economy, which is an important indicator of the state of this sector and the Canadian economy as a whole. A result above 50 is seen as positive and strengthens the CAD, below 50 as negative for the Canadian dollar. The data above the value of 50 indicate an acceleration of activity, which has a positive effect on the quotes of the national currency. If the indicator falls below the forecast and, especially, below the value of 50, the dollar may sharply weaken in the short term.Previous indicator values: 52.5, 54.6, 56.8, 56.2, 58.9, 56.6, 56.2 (in January 2022).The level of influence on the markets is average. USA. Business activity index (PMI) in the manufacturing sector The monthly report of the Institute of Supply Management (ISM) publishes (among other data) the PMI index of manufacturing activity in the US economy, which is an important indicator of the state of this sector and the American economy as a whole. A result above 50 is considered positive and strengthens the USD, below 50 is considered negative for the US dollar. The data above the value of 50 indicate an acceleration of activity, which has a positive effect on the quotes of the national currency. If the indicator falls below the forecast and, especially, below the value of 50, the dollar may sharply weaken in the short term.Previous indicator values: 52.8, 53.0, 56.1, 55.4, 57.1, 58.6, 57.6 (in January 2022).Forecast for August: 52.6. The level of influence on the markets is high. Friday, 02 September USA. NFP (number of new jobs created outside the agricultural sector) and unemployment rate The central event of Friday will be the release of the monthly report of the US Department of Labor with data on the main indicators of the country's labor market for August. Market participants are closely following this report, and market volatility during the period of its publication usually rises sharply, especially in dollar quotes.The growth of this report's figures (average hourly wages and the number of new jobs created outside the agricultural sector) and the decrease in the unemployment rate are positive for the dollar.Previous values (average hourly wages / new jobs created outside the agricultural sector / unemployment rate): +0.5% in July, +0.3% in June, May and April, +0.4% in March, 0% in February, +0.7% in January 2022 / +0.528 million in July, +0.372 million in June, +0.390 million in May, +0.428 million in April, +0.431 million, +0.678 million in February, +0.467 million in January 2022 / 3.5% in July, 3.6% in June, May, April and March, 3.8% in February, 4.0% in January 2022.Forecast for August: +0.3% / +0.290 million / 3.5%, respectively.The indicators can be called, if not strong, then very positive. At the same time, unemployment remains at minimal levels. In any case, the market reaction to the publication of the US Department of Labor report may be unpredictable, because indicators of previous monthly reports can often be revised, and not always for the better.With volatility traditionally expected to spike around the time this report is released, it may be best for conservative traders to stay out of the market during this time frame. The level of influence on the markets is high. Relevance up to 16:00 2022-08-31 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320057