GBP is Among Last Week Outsiders (Weekly Review)

Macroeconomic calendar of the past week was rich in important events. Released data on consumer inflation and GDP in Germany and the Eurozone could not inspire euro bulls, but the fall of the British pound paired with the GBP kept the EUR/USD afloat, while not keeping the pair from a slight decline to the level of 1.1151. Prospects for the euro remain negative, and only the ability to return and gain a foothold above the 12th figure will give the bulls hope for a more ambitious growth.

Regular calls by party comrades for Teresa May to resign reminded everyone of political risks in the UK and thus contributed to a resumption of the decline in the British pound against both the EUR and the USD. Due to the fall, they lost a considerable part of their achievements; pressure on it remains, and against this background, an update of the GBP/USD current minimums looks possible.

One of the main topics in the financial markets remains the failure of trade negotiations between the United States and the People's Republic of China, which caused a decline primarily in the Australian dollar and the strengthening of the Japanese yen. Nevertheless, market participants are still set to end the trade war in the foreseeable future, which was reflected in the rebound of stock indexes from correction lows and the strengthening of the dollar against the yen. Under conditions of uncertainty and low volatility, a significant strengthening of the pair can hardly be expected.

Schedule for this week:

Monday, May 20
09:00 GMT - Eurozone. Current Account;
12:30 GMT - USA. Chicago Fed National Activity (Apr);
17:05 GMT - USA. FOMC Member Clarida Speaks.

Tuesday, May 21
23:00 GMT - USA. Fed Chair Powell Speaks;
01:30 GMT - Australia. Reserve Bank of Australia Meeting Minutes;
02:15 GMT - Australia. RBA Governor Lowe Speaks;
12:55 GMT - USA. Redbook Index;
14:00 GMT – New Zealand. GlobalDairyTrade Price Index;
14:00 GMT - USA. Existing Home Sales (MoM) (Apr).

Wednesday, May 22
22:45 GMT - New Zealand. Retail Sales (QoQ) (Q1);
23:50 GMT - Japan. Trade Balance;
23:50 GMT - Japan. Import/Export;
01:30 GMT - Japan. Bank of Japan Board Member Harada Speaks;
08:30 GMT – United Kingdom. Consumer Price Index (CPI);
08:30 GMT – United Kingdom. Core Consumer Price Index (CPI);
08:30 GMT – United Kingdom. Retail Price Index (RPI);
12:30 GMT – Canada. Retail Sales;
18:00 GMT - USA. Federal Open Market Committee (FOMC) Meeting Minutes.

Thursday, May 23
23:50 GMT - Japan. Foreign Investments in Japanese Stocks;
06:00 GMT - Germany. GDP;
06:00 GMT - Germany. GDP Total n.s.a.;
07:30 GMT - Germany. Markit Manufacturing Purchasing Managers Index (PMI);
07:30 GMT - Germany. Markit Services Purchasing Managers Index (PMI);
08:00 GMT - Eurozone. Markit Services Purchasing Managers Index (PMI);
12:30 GMT - USA. Initial Jobless Claims;
13:45 GMT - USA. Markit Manufacturing Purchasing Managers Index (PMI);
14:00 GMT - USA. New Home Sales (MoM) (Apr).

Friday, May 24
22:45 GMT - New Zealand. Trade Balance;
23:30 GMT - Japan. National Consumer Price Index (CPI);
08:30 GMT – United Kingdom. Retail Sales;
12:30 GMT - USA. Goods Orders Non Defense Ex Air (Apr);
12:30 GMT - USA. Durable Goods Order.

Author: Anthony Porter, IAFT Analyst