Senior Analyst

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Welcome to the easyMarkets weekly outlook starting this Monday 04 September. We’ll be looking at the week’s key economic events on the financial calendar covering Monday to Thursday. This week is all about interest rate decisions and second quarter GDP figures. We have action coming from Europe down to Australia and lots for traders to keep a keen eye on.

 

Event: RBA Interest Rate Decision

Date: Tuesday 05 September 2017 at 04:30 GMT

Markets affected: AUD/USD, AUD/NZD

Trending hashtags: #aud, #interestrate

Expectations are for the Reserve Bank of Australia to maintain the current interest rate at 1.5% for the 13th month in a row. Governor Lowe has commented as much during August and suggested any moves would be to increase rather than drop rates. The RBA is in a controversial position where cutting rates might fan the furnace of rising house prices and household debt, whereas increasing rates before reaching target inflation is unlikely. An increase of the benchmark cash rate is likely to drive the AUD up, something the central bank is not keen to do as it will hold back inflation and economic growth.

 

Event: Swiss GDP (Q2)

Date: Tuesday 05 September 2017 at 05:45 GMT

Markets affected: EUR/CHF, CHF/USD

Trending hashtags: #chf, #gdp

 

Gross Domestic Product data for the second quarter is due for release on Tuesday for the Swiss. The last quarter saw a 0.3% increase on the previous quarter and annualised growth of 1.1%. A couple of hours later at 07:15 (GMT), the Consumer Price Index for August is due which had a previous change of 0.3% annually (and monthly) and is expected to show a 0.5% change. The Swiss franc will be closely followed on the back of these two key announcements as current geopolitical tensions in the US have seen the swissy rise on its safe haven status.

 

Event: Australia GDP (Q2)

Date: Wednesday 06 September 2017 at 01:30 GMT

Markets affected: AUD/USD, AUD/NZD

Trending hashtags: #aud, #gdp

Gross Domestic Product for Australia is expected to show the economy to have expanded 1.8% on a year-to-year basis, or 0.8% increase from July on a monthly basis. Recent construction spending saw record increases last quarter thanks to the mining sector who spent big on major engineering projects. That is expected to give a significant boost GDP. The Australian Bureau of Statistics data showed a 9.3% increase in construction for Q2, far outpacing expected growth of just 1%. The central bank is preparing for market activity around the GDP and may increase economic forecasts ahead of the indicator’s release.

 

 

Event: BoC Interest Rate Decision

Date: Wednesday 06 September 2017 at 15:00 GMT

Markets affected: CAD/USD

Trending hashtags: #cad, #interest rate

The Bank of Canada is not expected to change the interest rate which has sat comfortably at 0.75% for some time now. GDP data from the previous week showed an impressive 4.5% growth, surpassing the 3.7% forecasted figure and topping the G7 countries in terms of economic expansion. Household spending reached pre-2008 crisis levels and is leading many to speculate that a hike in rates may be due soon with the odds of a rise this Wednesday hitting 41%.

 

Event: Eurozone GDP (Q2)

Date: Thursday 07 September 2017 at 09:00 GMT

Markets affected: EUR/USD, EUR/GBP

Trending hashtags: #eur, #gdp

The GDP release is expected to show the Eurozone economy expanded by 2.2% annually and 0.6% against the previous quarter. Last week saw positive economic sentiment for the economy in the 19 countries sharing the euro currency with numbers hitting a 10 year high as it reached 111.9. Previous estimates for Q2 were for a 2.1% annualised increase but economists are already revising their outcome for the release on Thursday to 2.2%.

 

Event: ECB Interest Rate Decision

Date: Thursday 07 September 2017 at 11:45 GMT

Markets affected: EUR/USD, EUR/GBP

Trending hashtags: #eur, #interestrate

 With the interest rate remaining unchanged at 0%, European Central Bankers don’t seem intent on making any changes to that any time soon. ECB President Draghi certainly didn’t make any comments along that vein at the Jackson Hole Symposium from a couple of weeks ago. However, policy makers will be privy to the GDP data ahead of the rest of us mere mortals so any surprises from that release earlier in the morning may be reflected in the final rate decision.

 

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