Next week in the FX markets: what’s on?

The foreign exchange trading week is now beginning to come to an end, and so now is a good time to look ahead at what’s on the agenda next week.

The forex week will kick off in earnest on Monday 13^th with an announcement from China on foreign direct investment levels for the month of June.

There is, as yet, no specified time for the announcement.

The day will be relatively quiet after this, though a speech from Andrew Bailey, who is the new Governor of the Bank of England and who has been in office since March, will occur at 3:30pm GMT.

This will be followed at 6pm GMT by the US monthly budget statement, which will cover the month of June.

On Tuesday 14^th, there may be something of a slowdown in trading volume from Europe due to a public holiday in France.

Banks will be closed there as part of the celebrations for Bastille Day.

Other economies, however, will remain highly active when it comes to forex.

In China, for example, import and export data for June is due out at some stage over the course of the day – though the time of this has again not yet been confirmed.

Japanese industrial production figures for the month of May will be out at 4:30am GMT.

In Britain, meanwhile, industrial production figures are also expected later in the day at 6am GMT.

These will cover the month of May.

Month on month, these are due to show a change from -20.3% to +15%.

Manufacturing production figures for the same period and country will be out during the same time slot.

These figures are due to go from a previous position of -24.3% to a new figure of -15.8%.

However, the key event in this time slot will be the British gross domestic product figures for May.

Month on month, these were last recorded at -20.4%.

There is as yet no clear analyst consensus on where the figures are likely to go next.

However, it is almost certain that this metric will reflect the performance of the British economy during the coronavirus outbreak – and as such it is likely to be closely monitored by traders.

In Germany, meanwhile, a harmonised index of consumer prices will be out at 6am GMT.

This figure will cover June and is likely to cause some response in the single European currency trading markets.

The figure is predicted to show a drop in prices in Europe’s largest economy, with the year-on-year figure due to go from 0.8% to 0.5%.

Later in the day, there will be a release from the European Central Bank.

The bank lending survey in the country will be out at 8am GMT.

Attention will shift back to Germany later in the day when the ZEW Economic Sentiment survey comes out at 9am GMT, covering July.

This is due to show a change from 63.4 to 60.

A busy morning for the markets will come to a close at lunchtime in the GMT time zone when the US consumer price index is released at 12:30pm GMT.

This will cover the month of June and is expected to show a year-on-year change from 0.1% to 0.3%.

About the author: Justin Freeman

Justin is an active trader with more than 20-years’ industry experience of working for big banks and hedge funds. He has an inside knowledge of how the financial markets work, thanks to roles including trader on a $750m Event-Arbitrage desk and CRO and COO of hedge funds running a variety of strategies. From stat-arb and trend-following CTA to fixed-income relative value. Firm’s he has worked at include big banks like Citi, and prominent hedge funds including D. E. Shaw and Millennium Capital Management.

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