The week ahead is relatively from an economic data point of view, with no tier-one data set to be released. Coupled with the fact that we have officially entered summer trading, the currency market needs a driver other than the regular pieces of economic data. Once again, all eyes are on the United States stock market.
What to Consider This Week
The most important events on the economic calendar this week are due Monday and Tuesday. The week starts with Bank of Canada’s Governor Macklem’s speech about monetary policy in the era of COVID-19, and questions from the audience are expected – traders involved in CAD pairs will likely notice an increase in volatility during the questions and answers session.
Tuesday is the day when the PMI’s in the Eurozone are to be announced. Both flash manufacturing and services data will give traders a clue about how the economic recovery takes place in Europe now that its economies are open. Speaking of economies that reopen, the United Kingdom will reopen its restaurants this week – a move closely watched by authorities to see how it will impact the spread of the virus.
Still on Tuesday, the main event of the trading week comes out of New Zealand – the Reserve Bank of New Zealand announces its official cash rate and the rate statement. As always when there is a central bank due to announce the monetary policy, the currency will experience higher volatility.
Beyond Tuesday, nothing is worth mentioning on the economic agenda. Hence, the focus remains on how the virus impacted the world’s economies and, once again, on the US stock market.
The coronavirus pandemic continued to spread this weekend . Which is a sad record considering the global effort to fight it, with two countries responsible for most of the increase – the United States and Brazil, who now have over a million infections. The interest, though, already shifted from the number of infections to the number of fatalities, and on this front, things look better in the sense that a positive trend can be spotted.
The United States gets closer and closer to the election in the fall, and we have already seen Trump rallying its supporters. The closer we get, the likelier that the stock market will react more and more to the polls, and it will also impact the currency market.
Expect a slow week in terms of economic data, but it does not mean that volatility won’t be there.