The upcoming week features central bank rate decisions from the ECB and the Bank of Canada. We’ll get a look at GDP data in the UK, the eurozone and Japan.
German CPI declined by 0.1%, the third decline in the past four months. Eurozone CPI fell by 0.2%, as deflation in the bloc remains a serious concern.
In Australia, the RBA held rates at 0.25%, where they have been pegged since March. The economy contracted by some 7.0% in Q2, marking the worst quarter on record, as the coronavirus hampered business activity. With GDP falling for a second straight quarter, the country is officially in a recession.
- Australian ANZ Job Advertisements: Monday, 1:30. The Australia and New Zealand Banking Group employment indicator enjoyed a strong month in July, with a gain of 16.7%. Will we see another gain in the August data?
- Japan Final GDP: Monday, 23:50. Analysts are braced for a dismal GDP read in the second quarter, with an estimate of -8.1%. This reflects the sharp deterioration in economic activity as a result of Covid-19.
- Eurozone GDP: Tuesday, 9:00. GDP for the second quarter is expected at -12.1%, which would confirm the previous two estimates. Unless the actual release is well off the estimate, reaction to this event will be muted.
- Bank of Canada Rate Decision: Wednesday, 14:00. The Canadian economy is showing signs of recovery, but the BoC is unlikely to change rate levels anytime soon. We can expect the bank to maintain rates at 0.25%, where they have been pegged since March. The tone of the rate statement could affect the movement of USD/CAD.
- ECB Rate Decision: Thursday, 11:45. ECB policymakers are expected to maintain current monetary policy, as the fragile eurozone economy shows some signs of recovery from the devastating Covid-19 pandemic. The main headaches for the ECB are the strong euro and the threat of deflation, so the rate statement could address these issues.
- German Final CPI: Friday, 6:00. Inflation dropped by 0.1% in August and this initial reading is expected to be confirmed. A reading in negative territory will reiterate that the eurozone could be facing a deflation problem due to weak economic activity.
- British GDP: Friday, 6:00. GDP has rebounded nicely since a disastrous plunge of 20.4% in April, which reflected the severe economic slowdown due to Covid-19. In June, GDP climbed 8.7% and the forecast for July is a solid gain of 6.6%.
- US Inflation: Friday, 12:30. Both the headline figure and the core figures posted gains of 0.6% in July. We now await the August data.
- All times are GMT