HomeU.S. Inflation – The Highlight of the Trading Week Ahead

U.S. Inflation – The Highlight of the Trading Week Ahead

The week ahead is marked by U.S. economic data that may move the markets. Also, the Reserve Bank of New Zealand (RBNZ) is delivering its rate statement, a key decision for NZD traders. 

FOMC Members on the Watch

The week started with the Fed’s Chair being interviewed at the 60 Minutes show in America. Similar events are scheduled for the rest of the week, as Jerome Powell and other FOMC members are scheduled to deliver various speeches throughout the week.

Today it is all about the  Bank of Canada’s Business Outlook Survey. This is a highly regarded report that highlights the strengths and weaknesses of the Canadian economy and thus is very important for CAD traders.

On Tuesday, inflation in the United States is released. This is the most important event of the trading week, and the market expects an increase from 0.4% to 0.5% on the monthly data. Also, the core data that doesn’t account for energy prices is expected to double from 0.1% to 0.2%. The risks are that the inflation will overshoot, and rumors in the market suggest that the Fed already knows that, and this is the reason why so many Fed members are scheduled to intervene in the markets this week.

Right after the CPI data, Fed’s Bostic is scheduled to deliver closing remarks at an online event hosted by the Minneapolis Federal Reserve Bank. One day later, on Wednesday, it is Jerome Powell’s turn, as he speaks at the Economic Club of Washington, and audience questions are expected. If inflation data overshoots tomorrow, all the Fed members will try to reassure market participants that the Fed is in control and that the increase in prices is only temporary.

Moving toward the end of the trading week, Retail Sales in America are expected to increase by 5.3% on a month-to-month basis. The bias here is that the data will beat expectations as the American consumer spends the stimulus checks received lately.

Finally, late Thursday, the Chinese GDP is due. The expectations are that the Chinese economy grew by 18.3%, but traders should be aware of what this number means. The data refers to the quarterly value compared to the same quarter a year earlier. Most of the Chinese economy was closed in the first quarter of the previous year due to the COVID-19 virus.

All in all, an interesting week ahead, with the U.S. inflation data in focus.

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