weekly market outlook (21st -25th Aug)

This week will be a busy one with dozens of economic events scheduled. As usual, we will highlight events which will inject a substantial level of volatility in respective markets.

Monday

Canada wholesale sales MoM

Canada wholesale sales is a leading indicator of consumer spending .It measures the change in sales’ valuation at the whole sale level. In the latest release, the CAD hit 14-month highs after the better-than expected release.

This month’s release is expected to be 0.4% lower compared to Canada wholesale sales for July.

Tuesday

German ZEW Economic Sentiment

The German Zentrum für Europäische Wirtschaftsforschung (ZEW) Economic Sentiment Index is used to gauge 6-month economy outlook. The reading is arrived at after evaluating almost 350 German institutional investors as well as analysts.

A reading above zero is considered optimistic while a reading below zero is considered pessimistic. A higher than expected reading will be bullish for EUR, while lower than expected reading will definitely be bearish for EUR.

A reading of 15.0(-14.5%) is expected.

Core retail sales MoM

Considered as an economy pace indicator, Core retail sales MoM is an important metric which induces a fairly amount of volatility in CAD.A higher than expected reading will trigger positive investor sentiment while a lower reading will be bearish for the CAD.

A reading of 3.0% is very much on the cards.

Wednesday

French Manufacturing purchasing Managers PMI (AUG)

Basically, a reading above 50 signifies expansion in the manufacturing sector. A reading below 50 points to a shrinking manufacturing sector. A better than expected reading on August 1 was bullish for the EUR. A reading 54.5 is on the cards.

ECB president speaks

European Central Bank president ,Mario Draghi is expected to comment on short term interest rates. Frankly speaking, he has a lot of influence on the EUR value and his comments will trigger a short-term uptrend or downtrend.

Kaplan Speaks

FOMC member and the president of Federal Reserve Bank of Dallas,Robert Kaplan is expected to speak.His public speaking are usually used to give clues on future monetary policy.

Market to watch: USD crosses

New Home Sales MoM (Jul)

Among U.S. economic events lined up on Wednesday, New Home Sales data will probably be among the main market movers for USD and U.S. Indices this week. New home sales for July stood at 610K,5K short of the 615K forecast.

A higher-than expected reading will most likely trigger a short-term uptrend while a lower-than expected reading will be bearish to USD. Analysts have forecasted a 612K reading.

U.S. Crude Oil Inventories

Concerns over a tick in crude oil production by United States weighed down on Oil prices. A higher than expected reading will imply a decrease in demand and hence will be bearish for Oil prices. The reverse will be implied if the inventories are lower than expected.

Thursday

Spanish GDP QoQ (Q2)

It measures annualized change in inflation. Spanish GDP QoQ is expected to stagnate at 0.9%.A reading above 0.9% will be bullish for the EUR while a reading below 0.9% will be bearish for the EUR.

U.K. GDP QoQ (Q2)

A reading above 0.3% will most certainly be bullish to the GBP while a reading below 0.3% will be taken as bearish to the GBP.
Markets to watch: GBP crosses

Jackson Hole Symposium

Held in Jackson Hole, Wyoming, the economic symposium will be attended by academics, finance ministers and central bankers from all over the world. Speeches and comments from central bankers may create significant market volatility on respective currencies.

Friday

German GDP QoQ (Q2)

A reading at 0.6% is expected. A reading above 0.6% will be bullish to the EUR while a reading below 0.6% will be bearish to the EUR.

Janet Yellen Speaks(US)

The Federal Reserve chairperson, Janet Yellen, is expected to speak on Thursday. Her speeches usually shed some light on future monetary policies and will trigger a short-term uptrend or downtrend.