- Focus among traders will remain on the US political landscape after Biden won the election.
- The Reserve Bank of New Zealand will deliver its rate decision this week.
- Other key events will be the ECB annual forum and US inflation numbers.
The US dollar index (DXY) declined last week as the market reacted to the United States election and Joe Biden victory. It also rose because of a potential gridlock in Washington, which leave most of Trump’s policies intact. The currency also reacted to the Fed interest rate decision, manufacturing and services PMIs, and nonfarm payroll numbers. Let us look at some of the key events to watch out this week in the economic calendar
RBNZ interest rate decision
The Reserve Bank of New Zealand (RBNZ) will be the only major central bank to release its interest rate decision this week. It will start its meeting on Tuesday and deliver the decision on Wednesday morning.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
While the country has handled the Covid-19 pandemic well, it is still facing a significant slowdown because of the services sector. Therefore, analysts polled by Reuters expect the central bank will leave interest rate unchanged at 0.25% and be relatively dovish.
In addition to the RBNZ, we will receive key numbers from New Zealand, including electronic card sales, external migration and visitors data, and business PMI.
ECB annual forum
The market will also focus on the European Central Bank (ECB) annual forum, which will take place virtually this week. Christine Lagarde will deliver the welcome address on Wednesday. She will then be joined by other key central bank governors, including Bank of England’s Andrew Bailey and Fed’s Jerome Powell. Still, nothing new is expected in this forum since the three banks have made their rate decisions recently. Last week, the BOE increased its asset purchases while the Fed left everything intact.
The US inflation will be another key data to watch in the economic calendar this week. Analysts polled by Reuters expect the CPI will increase by 0.2% in October after rising by 0.4% in the previous month. That will be the fifth straight month that the rate of inflation has been rising. However, the annual inflation rate remains below 2%, which is the target of the Federal Reserve.
Other countries will also release their inflation numbers. For example, China will release its data on Tuesday as analysts price-in a 0.8% increase.
UK GDP data
The UK third quarter GDP data is another thing to watch in the economic calendar this week. Analysts expect that the data, which will come out on Wednesday, will show that the economy bounced back by 15.8% in the third quarter. That will be a significant bounce after it dropped by more than 19.8% in the previous month. They also expect the GDP to decline by 9.4% on a year-on-year basis. Still, that decline will be significantly below the 30%+ increase in the United States.
Other important numbers to watch from the UK will be industrial production, manufacturing production, and employment numbers.
Other events to watch
There will be other key events in the economic calendar this week. On Friday, Eurostat will release the third-quarter GDP estimate of the Eurozone. Analysts expect the data to show that the economy expanded by 12.7% in Q3. We will also receive inflation numbers from Sweden and Germany. Also, investors will watch for the Turkish lira after the president fired the country’s central bank governor for the second time in more than a year. Read our review of the best forex brokers here.