The Week Ahead: Markets Brace for Key Events (19th - 23rd August)
As we step into another action-packed week, there’s plenty on the agenda that could stir the markets. From central bank updates to critical economic data, here’s a breakdown of what’s coming up between the 19th and 23rd of August, and why it matters for traders.
Monday, 19th August
- New Zealand Trade Balance (July)
We kick things off with New Zealand’s trade balance for July. While it might not steal the spotlight, this data offers insight into the country’s economic health, particularly its export-import dynamics. For traders with an eye on the New Zealand dollar, any surprises here could be a reason to adjust positions, especially in light of the global trade environment.
Tuesday, 20th August
- RBA Meeting Minutes
- Eurozone Final CPI (July)
- Canadian CPI (July)
RBA Minutes (Tuesday):
The Reserve Bank of Australia (RBA) is set to release the minutes from its meeting held earlier this month. While the RBA decided to keep the Cash Rate unchanged at 4.35%, the tone of the discussion behind that decision is what traders will be dissecting. Governor Bullock, in her recent statements, has kept the door open for further rate hikes, especially if inflation remains sticky. Expect these minutes to give us a deeper look into the RBA’s current thinking and any potential shifts in their strategy.
Eurozone Final CPI (Tuesday):
Inflation has been a hot topic across the Eurozone, and the release of the final CPI data for July is another chance to assess how the region is handling price pressures. The initial estimate showed inflation easing slightly, but not by enough to take the heat off the European Central Bank (ECB). With the ECB recently holding rates steady, this CPI data could influence whether they maintain that course or start signaling more aggressive moves in the months ahead.
Canadian CPI (Tuesday):
Up north, Canada’s inflation numbers are also on deck. The Bank of Canada (BoC) recently kept its inflation forecast steady for the end of 2024 but nudged up its 2025 outlook. This CPI release will be crucial in determining whether the BoC was right to hold its ground, or if inflation is creeping higher than they anticipated. With the Canadian dollar often sensitive to these reports, traders should be prepared for possible volatility following the release.
Wednesday, 21st August
- FOMC Meeting Minutes
- Japanese Trade Balance (July)
FOMC Minutes (Wednesday):
The Federal Reserve’s meeting minutes from their July session are due out, and they’re likely to be closely watched. The Fed kept rates steady last month, but the language around inflation and future rate cuts could be telling. With Chair Powell hinting that the central bank is still “highly attentive” to inflation risks, these minutes could offer clues on just how close—or far away—the Fed is from making any dovish pivots. With the Jackson Hole Symposium looming later in the week, this release could set the tone for what’s to come.Up north, Canada’s inflation numbers are also on deck. The Bank of Canada (BoC) recently kept its inflation forecast steady for the end of 2024 but nudged up its 2025 outlook. This CPI release will be crucial in determining whether the BoC was right to hold its ground, or if inflation is creeping higher than they anticipated. With the Canadian dollar often sensitive to these reports, traders should be prepared for possible volatility following the release.
Japanese Trade Balance (Wednesday):
Over in Japan, the trade balance for July is set to be released. This data gives us a snapshot of the health of the Japanese economy, particularly its export sector, which is a major driver of growth. A stronger trade balance might bolster the yen, especially if it signals that Japan’s economy is holding up well amid global uncertainties.
Thursday, 22nd August
- ECB Meeting Minutes
- Jackson Hole Economic Symposium Begins
- Bank of Korea Announcement
- Eurozone/UK/US Flash PMIs (August)
- New Zealand Retail Sales (Q2)
ECB Minutes (Thursday):
The European Central Bank will release the minutes from its latest policy meeting. While the ECB chose to keep rates steady after a previous 25 basis point cut in June, the debate within the Governing Council will be under the microscope. President Lagarde has emphasized a data-dependent approach moving forward, so any insights into what might sway the ECB one way or another will be key for market participants.
Jackson Hole Economic Symposium (Thursday - Saturday):
One of the most anticipated events of the week kicks off on Thursday. The Jackson Hole Symposium brings together central bankers, economists, and policymakers from around the world. Fed Chair Jerome Powell is set to speak on Friday, and his remarks could provide critical insights into the Fed’s outlook on the U.S. economy. Given that Powell’s last comments hinted at a cautious approach towards rate cuts, any shift in tone could send ripples through the markets.
Bank of Korea Announcement (Thursday):
The Bank of Korea (BoK) will announce its latest policy decision. With the Korean economy facing headwinds, traders will be watching to see if the BoK takes any steps to stimulate growth or signals future moves.
Flash PMIs (Thursday):
Preliminary Purchasing Managers’ Index (PMI) readings for August are due from the Eurozone, UK, and the U.S. These PMIs are closely watched as leading indicators of economic health, giving a snapshot of activity in the manufacturing and services sectors. Strong readings could boost market confidence, while weak numbers might fuel concerns about a slowdown, particularly in Europe where growth has been sluggish.
New Zealand Retail Sales (Thursday):
Later in the day, New Zealand will release its retail sales figures for the second quarter. Retail activity is a key driver of economic growth, and with recent data suggesting flat spending levels, this release could shed light on whether consumers are starting to tighten their belts. A weaker-than-expected print could weigh on the New Zealand dollar, especially if it points to a broader slowdown.
Friday, 23rd August
- Jackson Hole Economic Symposium (Continues)
- Japanese CPI (July)
- Canadian Retail Sales (June)
Japanese CPI (Friday):
Rounding out the week, Japan’s core CPI for July is set to be released. The data is expected to show a slight uptick to 2.7% from 2.6% in June, but with the Bank of Japan (BoJ) still in tightening mode, the outcome could be crucial in determining their next steps. If inflation continues to rise, the BoJ might find itself under pressure to take additional measures, despite the challenges this could pose to the broader economy.
Canadian Retail Sales (Friday):
Canada’s retail sales for June are also on the docket. This data will give insight into consumer spending habits, which have been a bit of a mixed bag lately. With the Canadian economy showing signs of resilience, a strong retail sales figure could support the Canadian dollar, while a weaker number might raise concerns about the strength of domestic demand.
What to Keep an Eye On:
- Central Bank Minutes: The RBA, ECB, and FOMC minutes will provide deeper insights into the thinking of these key central banks. With monetary policy still in the spotlight, these minutes could influence market expectations for the coming months.
- Inflation Watch: The CPI data out of Canada and Japan will be crucial in shaping the narrative around inflation. Any surprises here could have immediate market implications, particularly for the Canadian dollar and Japanese yen.
- Jackson Hole Symposium: Powell’s speech at Jackson Hole will be the highlight of the week. Traders will be keen to hear his thoughts on the U.S. economy and any hints about future Fed policy. This event has a history of moving markets, so expect plenty of attention.