The upcoming week will be very important for all of the financial markets despite the lack of major economic events and reports. Traders will be watching the price action very closely for all of the major assets because this is going to be the last week before September busy month when everyone comes back from the summer vacation season. Most of the huge trends usually start forming a couple weeks before the Autumn and it is always important to feel the overall market sentiment before starting a new season. The currency market will be also influenced by several local politic topics as well as the geopolitical situation. Several processes like Brexit and NAFTA are still in a negotiation stage and any progress might give a signal for traders to change things. Emerging markets’ sentiment is also a big topic for investors who will be looking for attractive assets to invest in for the nearest future.
Monday, August 27.
The trading week starts with the Summer Bank Holiday in the United Kingdom and one of the three financial capitols of the world will be closed. While traders will rest in London exchanges, the rest of the financial market players will be monitoring German Ifo Business Climate reports which will kick off the trading week on Monday at 09:00 AM GMT. A modest growth is widely expected and a strong reading of the reports might confirm the recent Euro strength and support EUR/USD currency pair in its recovery. French unemployment figures and BTF Auction are also key economic events to watch for traders. Bank of Canada will publish the economical review at the American opening. The only Monday report from the United States will come out at the same time - Dallas Fed Manufacturing Index is expected to confirm the recent economic growth.
Tuesday, August 28.
While Asian session is expected to be rather quiet on Tuesday, the European traders will watch M3 Money Supply report and Private Sector loans figures but those events might have a limited impact for EUR/USD as ECB have clearly stated the monetary policy outlook in their meeting minutes published last week. British pound might try to extend the recovery versus the greenback on Inflation Report Hearings which are tentative on Tuesday. Some support could also come from Brexit negotiators as the process seems to be approaching the final stage. The U.S. trading session starts with Goods Trade Balance in July (-$68.6B consensus). That was one of the main concerns for the Fed statement published last Wednesday. Gerome Powell also expressed some dovishness due to the negative trade balance in the United States, so markets could have a volatile reaction for any outcome of that report. CB Consumer Confidence and Redbook economic outlook are also due to release at 03:00 PM GMT on Tuesday.
Wednesday, August 29.
Japanese traders will be listening to BoJ Board Member Suzuki’s speech. Any confirmation for the continuation of the current ultra-soft monetary policy from the regulator might support Yen bears, especially in the scope of risk appetite spike in the last two weeks. USD/JPY might reach 112.00 next week, but the main growth is expected in Japanese Yen cross rates like EUR/JPY. European trading session will be influenced by GfK German Consumer Sentiment forecast for September, which is quite high currently. Another important event in the economic calendar is French Consumer Spending (0.3% is expected versus 0.1% monthly growth in June) and quarterly GDP report (0.2% flat expectations). Any improvement in these reports might give a significant lift to EUR/USD which was extending the recovery momentum recently. American trading session will be busy on Wednesday as well with the headline GDP second-quarter report (4.0% growth is expected). Any revision down might have a dramatic impact on the greenback demand as it was overbought recently. Moreover, any negative news would be a strong driving factor for a complete reversal in traders’ mood, especially in the scope of unexpected dovishness from the Fed officials last week. The U.S. Weekly Crude Oil inventories will be in focus of the market at 03:30 PM GMT and commodity bulls need to have confirmation for the uptrend to move forward. Any increase in the stock report might cause a sell-off for WIT Crude Oil.
Thursday, August 30.
The busy trading week continues with Asian reports on Thursday. Japan will release Retail Sales figures (1.2% expected in July) and Foreign Investments in Japanese Bonds and Stocks. New Zealand traders will monitor Building Consents and Business Confidence index, while Australian officials will publish Business Activity index and Public New Capital Expenditure. These reports will be important in the scope of the new Australian Prime Minister’s first steps. Spanish Inflation and German Import prices will start the European trading session. But it would be much more important to watch the German Unemployment figures, especially for EUR/USD bulls who need to have a continuous support from the fundamentals. British BoE Consumer Credit, Mortgage Lending and M4 Money Supply - these are key events for sterling bulls who are desperately trying to hold GBP/USD from the further slide. European Business Sentiment and German CPI - these reports will shift the focus back to Euro on Thursday. The American trading session is also full of important events: Core PCE price index is one of the main figures for the Fed to monitor in the scope of inflationary pressure. This would also be one of the last reports before the September meeting, so the volatility is expected to be high for all of the greenback assets across the boards. Loonie bulls will be looking for the fundamental support from Canadian GDP report which is expected to slow down somewhat (0.1% versus 0.5% previously). This modest consensus leaves a lot of room for a positive surprise though.
Friday, August 31.
The final trading session for the week and for the whole August will be very important for the technical analysis. Moreover, this will be the last trading session before the Labour Day Holiday in the United States which traditionally opens the new busy season. The economic calendar starts with Japanese inflation numbers and Tokyo Core PCI report. Manufacturing PMI from China should show how far the officials might go with their supportive economic measures. Tentative Nationwide HPI report from the United Kingdom will determine the GBP/USD price action. French, Italian and European CPI reports are going to confirm dovish ECB outlook. Canadian Inflation and Budget balance - these are the last reports in August to watch for Loonie traders. The United States will report Chicago PMI and Michigan COnsumer expectations which will inflence the demand for the greenback on Friday.