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Forex - Weekly outlook: November 15-19

Published 11/14/2010, 03:53 AM
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Investing.com - Last week saw the euro tumble the most against the U.S. dollar in three months, amid concerns over the sovereign debt problems of peripheral euro zone nations, especially Ireland.

The single currency trimmed losses on Friday after finance ministers from Germany, France, Italy, the U.K. and Spain issued a joint statement saying government bonds issued before mid-2013 would be unaffected by changes to the EU's bailout program.

Earlier in the week, Irish government bond yields had soared to record highs amid concerns that the country would struggle to repay its bondholders.

Meanwhile, the U.S. dollar ended the week higher against all of its major counterparts as the recent risk rally faded and after a hard-and-fast agreement on exchange rates failed to emerge from the meetings of the Group of 20 leading and developing countries.

G-20 leaders vowed action to seek more balanced growth and set "indicative guidelines" for measuring imbalances between economies, but left the details to be discussed in the first half of 2011.

In the week ahead, the U.S. is to release a flurry of data with reports on retail sales, inflation, manufacturing, foreign investment and building permits. The country is also to release key weekly data on initial jobless claims and the chairman of the Federal Reserve is to speak at a public engagement.

Also next week, the euro zone is to publish key data on German economic sentiment as well as data on inflation. In the U.K. the Bank of England is to publish the minutes of November’s monetary policy meeting. The country is also to publish official data on employment, retail sales and inflation.

Elsewhere, Japan is to publish preliminary data on GDP, the Reserve Bank of Australia is to publish its November monetary policy meeting minutes while New Zealand is to release official data on retail sales and inflation.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, November 15

The U.K. will begin the week with a report on house prices from the country’s largest property website, Rightmove. Meanwhile, Australia is to publish official data on new vehicle sales, a leading indicator of consumer confidence.

The euro zone is to publish data on the region’s trade balance while Switzerland is to publish official data on producer price inflation, a leading indicator of economic growth.

The U.S. is to publish key monthly data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. The country is also to publish data on manufacturing and business inventories.

Also Monday, Japan is to publish preliminary data on GDP, the leading indicator of economic growth, while New Zealand is to publish official data on retail sales.

Tuesday, November 16

The Reserve Bank of Australia is to publish the minutes of the November meeting of its monetary policy committee. The minutes provide in-depth insight into the economic conditions that influenced the decision on where to set interest rates. Later in the day, the country is to publish an index of leading economic indicators, designed to predict the future direction of the economy.

In the euro zone, the ZEW Centre for Economic Research is to publish key data on German economic sentiment as well as data on economic sentiment in the wider euro zone. The region is also to publish data on consumer price inflation, a leading indicator of economic growth.

The U.K. is also to release official data on consumer price inflation while the Bank of England is to publish its inflation letter which gives insight into the future direction of monetary policy. 

Also Tuesday, the U.S. is to publish key data on producer prices, a leading indicator of consumer inflation, as well as government data on the difference in value between foreign long-term securities purchased by U.S. citizens and U.S. long-term securities purchased by foreigners. The country is also to release official data on industrial production, a leading indicator of economic health as well as data on the capacity utilization rate.

Wednesday, November 17

The U.S. is to release key data on its consumer price index, as well as government data on building permits and housing starts, both leading indicators of health in the housing sector. The country will also publish a report on crude oil inventories.

In the U.K., the Bank of England is to publish the minutes of the November meeting of the monetary policy committee. The minutes provide as in-depth insight into the economic conditions that influenced the committee's decision on where to set interest rates.

The country will also produce data on claimant count change, the change in the number of people unemployed during the previous month, as well as data on the country’s overall unemployment rate and average cash earnings.

Also Wednesday, New Zealand is to produce data on producer price inflation, a leading indicator of economic growth, while Australia is to publish data on wage changes, an important inflationary indicator.

Thursday, November 18

The U.S. is to release key weekly data on initial jobless claims, while the Federal Reserve Bank of Philadelphia is due to release a report on the city’s manufacturing sector. The country is also due to publish an index of leading economic indicators, designed to predict the future direction of the economy, as well as a report on natural gas inventories.

The euro zone is to publish data on the region’s current account while European Central Bank President Jean-Claude Trichet is to give a speech; his comments will be closely watched for any clues to the future direction of monetary policy.

Meanwhile, the U.K. is to release preliminary data on mortgage approvals, as well as official data on retail sales, a primary gauge of consumer spending, while the Bank of England is to publish data on public sector borrowing. Later in the day, the country is to produce industry data on industrial order expectations, an important indicator of economic health.

In Switzerland, the ZEW Centre for Economic Research will publish data on Swiss economic expectations, a leading indicator of economic health. The country is also to release official data on its trade balance.

Elsewhere, Canada is to publish a report on foreign securities purchases, a strong driver of currency demand. The country will also produce data on an index of leading economic indicators and a report on wholesale sales.

Later in the day, the Bank of Canada will publish its quarterly review, which includes articles related to the country’s economy written by analysts from the Department of Monetary and Financial Analysis.

Friday, November 19

Federal Reserve Chairman Ben Bernanke and ECB President Jean Claude Trichet are both to deliver speeches at an ECB conference in Frankfurt.

Meanwhile, in the euro zone, Germany is to publish data on its producer price index, a leading indicator of consumer inflation.

Elsewhere, New Zealand is to produce data on credit card spending and Japan is to release a report on industry-wide activity.

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