Forecasting the Coming Week: US inflation in the spotlight… and more Fedspeak!

The Greenback saw a decent recovery during this week, against the backdrop of the generalized erratic performance in the FX space, the continuation of the monetary policy divergence, and a cautious Fedspeak.

The US Dollar managed to reverse two weeks of losses and reclaim the area beyond the 105.00 barrier amidst some consolidative mood in US yields. On May 14, Producer Prices are due, seconded by CPI prints, Retail Sales, Business Inventories, and the NAHB Housing Market Index, all due on May 15. On May 16, the Philly Fed Manufacturing Index is expected, along with the usual weekly Initial Jobless Claims, Building Permits, Housing Starts, and Industrial Production. Finally, the CB Leading Index is due on May 17.

EUR/USD managed to clinch its fourth consecutive week of gains, although a test or surpass of the 1.0800 barrier seems elusive for the time being. Germany’s final Inflation Rate is due on May 14, along with the ZEW’s Economic Sentiment in Germany and the broader euro area. On May 15, another revision of the EMU’s GDP Growth Rate is expected, followed by the final Inflation Rate in the euro bloc on May 17.

GBP/USD retreated markedly and ended the week in negative territory amidst the bounce in the Greenback, while investors continued to assess the BoE event and positive results from key fundamentals. The UK labour market report is due on May 14, while the BoE will release its Financial Stability Report on May 16.

USD/JPY resumed its uptrend largely on the back of the increasing depreciation of the Japanese yen, despite the spectre of FX intervention continuing to linger. Producer Prices are expected on May 14, followed by preliminary GDP Growth Rate and Foreign Bond Investment figures on May 16. Final Industrial production prints will close the docket on May 17.

A choppy week prompted AUD/USD to close the week slightly on the defensive around the key 0.6600 region. The Australian Wage Price Index is due on May 15, and the labour market report is expected on May 16.  

Anticipating Economic Perspectives: Voices on the Horizon

• Fed’s Mester and Jefferson speak on May 13.
• Fed’s Powell and Cook speak on May 14 along with BoE’s Pill.
• Fed’s Bowman speaks on May 15.
• Fed’s Mester, Barr and Bostic speak on May 16, along with RBA’s Hunter and BoE’s Greene.
• Fed’s Waller and BoE’s Mann speak on May 17.

Central Banks: Upcoming Meetings to Shape Monetary Policies

• The Bangko Sentral ng Pilipinas (BSP) will hold its meeting on May 16.