Forecasting the Coming Week: Central Bank Action and Economic Data in Focus
Introduction
Another strong week for the US Dollar has left risk-sensitive assets on the defensive, as the central bank's policy divergence narrative continues to drive the Greenback's robust advance.
Key Economic Data
The following key economic data will be released in the coming week:
| Date | Event |
|---|---|
| June 25 | Chicago Fed National Activity Index, FHFA House Price Index, Conference Board's Consumer Confidence |
| June 26 | MBA's Mortgage Applications, New Home Sales |
| June 27 | Initial Jobless Claims, Durable Goods Orders, advanced Goods Trade Balance, Pending Home Sales, final Q1 GDP Growth Rate |
| June 28 | PCE, Personal Income, Personal Spending, final Michigan Consumer Sentiment |
Currency Outlook
EUR/USD
EUR/USD ended its third consecutive week of losses due to the unabated bullish stance in the US Dollar. Key data releases for the euro include:
- IFO Business Climate in Germany (June 25)
- GfK Consumer Confidence in Germany (June 26)
- Final Consumer Confidence in the euro area (June 27)
GBP/USD
GBP/USD closed at four-week lows on the back of the stronger Greenback and the dovish BoE. Key data release for GBP includes:
- UK final Q1 GDP Growth Rate (June 28)
USD/JPY
USD/JPY advanced to seven-week highs due to the BoJ's dovish stance and the Dollar's rally. Key data releases for JPY include:
- BoJ Summary of Opinions (June 24)
- Final Coincident Index and Leading Economic Index (June 25)
- Weekly Foreign Bond Investment (June 27)
- Unemployment Rate, Housing Starts, Retail Sales, and preliminary Industrial Production (June 28)
AUD/USD
AUD/USD managed to clinch its second straight week of gains, supported by the hawkish stance of the RBA. Key data releases for AUD include:
- Westpac Consumer Confidence Index (June 25)
- Westpac Leading Index and RBA's Monthly CPI Indicator (June 26)
- Consumer Inflation Expectations (June 27)
- Housing Credit figures (June 28)
Central Bank Speeches and Meetings
Central bank speeches and meetings will also be in focus:
Speeches
- Fed's Waller and Daly, ECB's Nagel, and BoC's Macklem (June 24)
- Fed's Bowman and Cook, and ECB's Nagel (June 25)
- RBA's Kent (June 26)
- BoE's Bailey and Hauser (June 27)
- Fed's Barkin and Bowman (June 28)
Meetings
- Banxico, CBRT, BSP, and Riksbank to decide on interest rates (June 27)
Conclusion
The coming week will be a busy one for economic data and central bank action. The Fed's policy stance and the US economy's performance will remain key drivers for the Greenback, while other currencies will also be influenced by their own economic data and central bank decisions. Investors should monitor these events closely as they have the potential to impact markets significantly.