Your Weekly Fundamental View (7-11 August)
Need to Know
The upcoming trading week is expected to be relatively quiet news-wise, although there is a New Zealand interest rate decision on Wednesday. Other key events include the inflation rate from the U.S. as well as the data on the balance of trade from China, Germany, and Great Britain.
Coming Up
Australia's NAB Business Confidence on Tuesday, 8 August
The index is based on a survey of businesses, excluding the farming industry. Changes in their sentiment are seen as an early economic indicator.
Why should you care? A level above 0 indicates improved economic conditions whereas a level below 0 indicates a worsened economy. The previous rate is 9 (*).
Balance of Trade from China and Germany on Tuesday, 8 August
The balance of trade shows the difference between the imports and exports of goods from and to China and Germany. Both countries are known to be large exporters to the world.
Why should you care? A raise or fall in the balance of trade is expected to impact the Euro and Yuan versus other currencies. An increase in imports means more currency weakness whereas an increase in exports means more currency strength. The previous trade balance in Germany is €22B, whereas in China, it's $42.75B. The current forecast for the latter is $46.08B.
China's Inflation Rate on Wednesday, 9 August
The inflation rate is expected to be announced in China. The rate indicates the change in the number of consumers paying for goods and services.
Why should you care? The inflation rate is a key component in making decisions on the interest rate. The previous inflation rate is 1.5%, and the current forecast is exactly the same, at 1.5% (*).
New Zealand's Interest Rate Decision on Wednesday, 9 August
The Reserve Bank of New Zealand (RBNZ) announces its interest rate decision for New Zealand on Thursday (local time), which is Wednesday evening in the Americas, Europe, and Africa. The RBNZ are also expected to offer a statement and a press conference.
Why should you care? The interest rate has a direct impact on the supply and demand of the currency. A rate hike increases demand, whereas a rate drop does the opposite. The current interest rate is 1.75% (*).
Source: New Zealand interest rate decision from 2011 to 2017
Great Britain's Balance of Trade on Thursday, 10 August
The balance of trade shows the difference between the imports and exports of goods from and to Great Britain.
Why should you care? A raise or fall in the balance of trade is expected to impact the Great British Pound (GBP) versus other currencies. An increase in imports means more GBP are sold to buy foreign goods, whereas an increase in exports means more GBP are bought to buy British goods.
PPI and Unemployment Figures from the U.S. on Thursday, 10 August
PPI stands for Producer Price Index and indicates the price change of finished goods and services sold by producers to the market. Changes in PPI tend to impact consumer inflation. The initial jobless claims indicate the number of people who filed for unemployment insurance.
Why should you care? The previous figure for PPI is 0.1%, and the current forecast stands at 0.1% (*). The previous figure for the core PPI is 0.1%, with the current forecast being 0.2% (*). The previous figure for jobless claims is 240k, whereas the current forecast lies at 240k (*).
US Inflation Rate on Friday, 11 August
Inflation levels are monitored by Central Banks due to the fact that they are a critical component of any interest rate change. The inflation rate indicates the change in the prices that consumers pay for all goods and services in the economy.
Why should you care? The previous figure for the inflation rate is 1.6%; the current forecast, 1.8% (*). The previous figure for the core inflation rate is 1.7%, with the current forecast at 1.8% (*).
