Next week’s market movers

• On Monday, the market’s attention could be on China’s GDP growth rate for quarter 2.

• On Tuesday, New Zealand’s CPI rate for quarter 2, and UK employment data for May could prove to be the main releases of the day.

• On Wednesday, UK’s inflation rates for June as well as Eurozone’s final release of inflation rates are due out.

• On Thursday, Japan’s Trade Balance for June and Australia’s Employment data for June could grab the market’s attention.

• On Friday, Japan’s and Canada’s inflation rates for June could be the epicenter of discussions.

In the coming week a number of financial data releases could get the attention of the markets. Our team handpicked the ones which it considers as the most influential and discusses their possible (current) forecasts and their respective effects on various currencies.

On Monday, during the Asian session we get China’s GDP growth rate for the second quarter of 2018. The rate is forecasted to slowdown and reach +6.7% yoy compared to previous reading of 6.8% yoy.

Should the actual rates meet the forecast we could see the Aussie and the Kiwi weakening, as a slowdown in China’s GDP growth rate could imply less interaction with the Australian and New Zealand economy. Please be advised that the AUD and NZD are quite sensitive to Chinese data as their respective economies have a great exposure to China.

Also during the Asian morning we get China’s industrial production growth rate for June. The rate is forecasted to slowdown and reach +6.5% yoy compared to previous reading of +6.8% yoy.

This would be the second rate decelerating (if forecast is realized) and at the same time as the China’s GDP growth rate and could strengthen the arguments for the Kiwi and Aussie weakening.

On Tuesday, early in the Asian session, New Zealand’s CPI rate for Q2 is due out. The rate is forecasted to accelerate and reach +1.6% yoy compared to previous reading of +1.1% yoy.

Should the forecast be realized we could see the Kiwi strengthening as the rate accelerates substantially and aiming for RBNZ’s medium target of +2.0%. The acceleration could strengthen arguments for a more hawkish stance from RBNZ along with the Kiwi.

In the European session we get the UK employment data for May the unemployment rate is forecasted to remain unchanged at 4.2%, the Average Earnings (+Bonus) growth rate is forecasted also to remain unchanged at +2.5% yoy while the Employment change last figure was of +146.0k.

Should the forecasts be realized and the employment change figure be greater than the last reading, the employment data show a picture of a rather tight labour market, which could in turn support the pound.

On Wednesday, in the European session we get UK’s inflation data for June. The headline CPI rate is forecasted to accelerate and reach +2.6% yoy compared to previous reading of +2.4% yoy as well as the core CPI rate which is forecasted to reach +2.2% yoy compared to previous reading of +2.1% yoy.

Should the actual rates meet the forecasts we could see the pound getting some support as the acceleration of the headline rate would be substantial, strengthening the arguments for a potential rate hike by the BoE in August. We would also like to note that we see the risks for the headline rate on the upside as oil prices during the last ten days of June rose substantially.

Also in the European session we get Eurozone’s final CPI rates for June. The headline rate is forecasted to remain unchanged at +2.0% yoy if compared with the preliminary release. The core CPI rate is also forecasted to remain unchanged at +1.0% yoy if compared to previous preliminary.

Should the actual rates meet the forecast we could see the common currency getting some support as the stabilization of the headline rate at +2.0% yoy for June would mark the highest level for the indicator for more than a year, reaching ECB’s inflation target.

On Thursday, early in the Asian session we get Japan’s trade balance figure for June. The figure is forecasted to be a surplus of +534.24B Yen compared to previous month’s deficit of -578.3B Yen.

Should the actual figure meet the forecast we could see JPY strengthening as the deficit turns to a surplus and the Japanese economy is highly export oriented. Please note though that the surplus could also be caused partly by the slower pace of Export deceleration if compared to the imports deceleration rate. Should that perception dominate the market we could see a lower impact (yet possibly positive) on JPY.

Later in the Asian session, we get Australia’s employment data for June. The unemployment rate is forecasted to remain unchanged at 5.4% if compared to previous month’s reading while the employment change figure is forecasted to increase and reach +17.0k compared to previous reading of +12.0k.

Should the actual readings meet the forecasts we could see the AUD getting some support as the rising employment change figure could imply a rather tightening market, as unemployment remains at low levels for the Australian economy.

On Friday, early in the Asian session we get Japan’s inflation rates for June. The core CPI rate is forecasted to tick up and reach +0.8% yoy compared to previous reading of +0.7% yoy while the headline CPI rate’s last reading was +0.7% yoy.

Should the core CPI rate’s forecast be realized and the headline rate accelerate as well we could see the Yen strengthening as it would be good news for the inflation starving economy.

In the American session we get Canada’s CPI rates for June. The headline rate is forecasted accelerate reaching +2.5% yoy compared to previous reading of +2.2% yoy, while the Core BoC rate’s last reading was of +1.3% yoy.

Should the headline rate’s actual reading meet the forecast and the core rate accelerate as well, we could see the Loonie getting some support as a possible acceleration could strengthen the arguments for the BoC to retain a hawkish stance after the recent rate hike.