Your Weekly Fundamental View (10 - 14 July)

July 10, 2017 12:00

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Need to Know

The upcoming week seems to be relatively calm from a fundamental point of view with only a few major news announcements. The most volatile news is to be expected from Canada as the Bank of Canada (BOC) will release its decision on raising interest rates. High on the list is also the speech from Fed Chair Yellen as well as CPI and retail sales in the U.S., which will reveal more information about the strength of the US economic growth.

Coming Up

The Australian NAB Business Confidence on Tuesday, 11 July

The National Australia Bank (NAB) is an index based on completed surveys with 350 businesses outside of the farming industry. The survey asks them to rate the relative level of business conditions.

Why should you care? A level above 0 indicates an improving economy, whereas a number below 0 shows decreasing economic conditions. The previous figure for the NAB is 7.

Unemployment Rate in Great Britain on Tuesday, 11 July

The unemployment level will be announced in Great Britain. The percentage provides important information about the job market and how many people are currently seeking employment.

Why should you care? A decline in the unemployment rate indicates economic improvement, whereas a rise indicates worsening conditions. Both the previous and current figures are at 4.6%.

Canada Interest Rate and Statement on Wednesday, 12 July

The Bank of Canada (BOC) will announce its interest rate decision for Canada. The BOC will add an official statement and policy report to provide investors and the general public with more information about the economic outlook as well as the conditions and trends behind the rate decision. A press conference that will address questions from the press is also expected.

Why should you care? The current interest rate stands at 0.5%, with the forecast remaining at the same figure, 0.5% (*).

Claimant Count Change and Average Earnings on Wednesday, 12 July

The claimant count change indicates how many people were claiming unemployment benefits in the previous month. The average earnings number covers the three-month average of the rise or fall of wages.

Why should you care? A rise of the count change shows that more benefits were claimed, which indicates a worsening of the job market, whereas a fall shows less benefits claimed and an improvement of the job market respectively. An increase in the average earnings is positive for consumption, CPI, and economy. The previous average earnings is 2.1%, and the current forecast stands at 1.8% (*). The previous claimant count change lies at 7.3k.

Fed Chair Yellen Testimony on Wednesday and Thursday, 13 and 14 July

On Wednesday, US Federal Reserve (Fed) Chair Yellen is expected to testify before the House Financial Services Committee on the semi-annual monetary policy report. The following day, Yellen will speak on the semi-annual monetary policy report before the Senate Banking Committee.

Why should you care? The Fed Chair announcements are always followed closely by the market for potential updates on the economic outlook, inflation development, and interest rate change.

China Trade Balance on Thursday, 13 July

The balance of trade will provide data on the difference between imported and exported goods from and to China in the previous month. A positive figure means that exports exceed imports, and a negative one indicates the opposite.

Why should you care? Export and import numbers from China have a large impact on the global economy as China produces and exports many articles to the West, but also imports many inputs to manufacture and deliver the products. The previous figure stands at $40.79B, and the forecast is $42.44B (*).

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Source: China Trade Balance Since 2011

CPI and Retail Sales Data from the U.S. on Friday, 14 July

The CPI, the core CPI, and retail sales are announced this day. The figures will provide more information about the pace of the US economy. Recent numbers have shown a slight slowdown in the growth, but the overall outlook remains bullish. These four data points will provide more information about the economic trend.

Why should you care? Positive numbers indicate a growing economy, whereas negative numbers, a potential slowdown. The previous inflation rate is 1.9%, and the expected rate stands at 1.7% (*). For the core inflation rate, both the previous and forecasted rates amount to 1.7% (*). The previous retail sales rate is -0.3%, and the expected rate, 0.1% (*).

(*) Admiral Markets – Forex Calendar

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