FXOpen UK: Your Weekly Financial Digest

 [] [FXOpen]( Any questions? [Email us](mailto:support@fxopen.co.uk?subject=) [Financial Market News] With US Q2 earning season now in full swing, its a busy week on both the corporate and economic news front. Please see below for this weeks key events that could trigger increased market volatility. [ [Trade now]( Economic data releases Tuesday, July 20 Japan: Inflation Rate (YoY; June) The inflation rate is calculated using the price increase of a defined product basket that contains products and services the average consumer spends money throughout the year on (groceries, clothes, rent, power, telecommunications, recreational activities, raw materials, as well as federal fees and taxes). In 2020, the inflation rate in Japan was about -0.02% compared to the previous year. Japan is ranked third among the countries with the largest GDP, after the US and China. Japan’s inflation rate is among the lowest worldwide. EU: Germany GfK Consumer Confidence (August) The Consumer Climate Indicator forecasts the development of real private consumption in the following month, and is based on a survey of thousands of individuals aged 14+. The questionnaire focuses on income expectations, buying propensity and savings. China: PBoC Interest Rate decision If the People's Bank of China is hawkish about the inflationary outlook of the economy and raises the interest rates, it is considered to be positive (= bullish) for the yuan. If the PBoC has a dovish view on the Chinese economy and keeps the ongoing interest rate, or cuts the interest rate, it is usually negative (= bearish). Australia: RBA Meeting minutes The Reserve Bank of Australia’s report contains details of the discussions held between the RBA’s board members on monetary policy and economic conditions that influenced their decision on adjusting interest rates and/or bond buys. This has a significant effect on the AUD. The report also reveals considerations on international economic developments and the exchange rate value. EU: ECB Bank Lending survey The survey’s main objective is to enhance the Eurosystem’s knowledge of financing conditions in the euro area. It provides input to the ECB Governing Council’s assessment of monetary and economic developments on which its monetary policy decisions are based. EU: Markit PMI Composite (July; prel) The monthly Purchasing Managers' Index reports on manufacturing and services are based on a large number of responses by business executives in private sector manufacturing and services companies. Results show the percentage of respondents reporting an improvement, deterioration or no change since the previous month. US: Building Permits (MoM; Jun) + Housing Starts (MoM; Jun) The Building Permits report shows the number of permits for new construction projects and implies the movement of corporate investments. The report has the potential to cause volatility to the USD; normally, the growing number of permits means a positive (= bullish) outlook for the USD. Housing Starts report tracks how many new single-family homes or buildings were constructed (privately and publicly-owned units). The report indicates movement of the US housing market. Wednesday, July 21 US: Crude Oil Inventories (also known as Crude Stocks, Crude Levels) This indicator measures the change in the number of barrels of crude oil held in inventory by commercial firms during the past week. Being a primary gauge of supply and demand imbalances in the market, Crude Stocks can lead to changes in production levels and price volatility. This US indicator also affects the Canadian dollar due to Canada's energy sector. Japan: BoJ Monetary Policy Meeting minutes In the early hours of Wednesday, the BofJ will release its report on the official interest rate (aka the discount rate) meeting. Such meetings produce a guideline for money market operations in inter-meeting periods. For the rest of the day, banks will be closed due to Marine Day. Australia: Retail Sales s.a. (MoM; June; prel) This survey of goods sold by retailers is considered an indicator of the pace of the Australian economy and one of the principal gauges of local consumer spending. This indicator influences inflation and GDP, as well as the Reserve Bank of Australia’s interest rates decision and AUD valuation. Canada: BofC Consumer Price Index Core (YoY; June) The Core CPI excludes the so-called volatile core 8 (fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation, tobacco products) considered to be the key indicator for inflation in Canada. Thursday, July 22 EU: Monetary Policy statement (aka ECB’s Interest Rate decision) + Press Conference (aka ECB president’s speech) The slight changes in each European Central Bank’s statement are traders’ main focus. The statement discusses the economic outlook and offers clues on the outcome of future decisions. It also contains the outcome of the ECB Governing Council’s decision on interest rates and commentary about the economic conditions that influenced them. The primary objective of the ECB’s monetary policy is to maintain price stability which is to keep inflation below but close to 2% over the medium term. As a rule, if the ECB is hawkish and raises the interest rate, it is positive, or bullish, for the euro, and vice versa in case the ECB cuts the interest rate. During the Press Conference, the ECB president’s comments have the potential to influence the volatility of eur and determine a short-term positive or negative trend. It is a two-part event: a prepared statement is read, then the conference is open to unscripted audience questions. EU: ECB’s Deposit Rate decision The deposit rate is the interest rate paid on the surplus liquidity that credit institutions may deposit overnight in an account with a national central bank that is part of the Eurosystem. Japan: BoJ Monetary Policy Meeting minutes In the early hours of Thursday, the BofJ is to publish a study of economic movements after the meeting held to review economic developments both inside and outside of Japan and indicate a sign of new fiscal policy. Changes announced in this report tend to affect the yen volatility: if the BofJ demonstrates a hawkish outlook, it is seen as positive (= bullish) for the yen, while a dovish outlook is seen as negative (= bearish) for the currency. For the rest of the day, banks will be closed due to Health-Sports Day Friday, July 23 EU: German Flash Manufacturing PMI + German Flash Services PMI The Manufacturing Purchasing Managers' Index measures the diffusion index based on the survey of purchasing managers in the manufacturing industry (they are asked to rate various business conditions such as employment, production, new orders, prices, supplier deliveries, and inventories). The PMI is a leading indicator of economic health. The two versions of this report are released about a week apart: Flash and Final, of which the former is released first and thus tends to have the most impact. The Flash Services PMI measures the diffusion index based on surveyed purchasing managers in the services industry. US: Markit Manufacturing PMI Flash (July) The US Markit Manufacturing PMI measures the manufacturing sector’s performance and is derived from a survey of about 600 industrial companies. UK: Markit Services PMI (July; prel) The UK PMI is an indicator of the economic situation in the local services sector and captures an overview of sales and employment conditions. Note, however, that the UK service sector is not as influential for the GDP as the Manufacturing PMI. Canada: Retail Sales (MoM; May) This monthly report shows all goods sold by retailers based on a sampling of retail stores of different types and sizes, and shows the performance of the retail sector in the short term The retail sales index is often taken as an indicator of consumer confidence. We hope our newsletter will help you shape your trading plan for this week. 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