Weekly Outlook: May 20 -24
Investing.com - This week investors will be looking ahead to the upcoming European elections amid potential risks for the single currency, while worries over Brexit will to continue to dominate sentiment on sterling.
Market participants will also get the chance to parse the minutes of the Federal Reserve’s May meeting, as well as data on U.S. durable goods orders, amid concerns over the economic impact of the worsening trade dispute between the U.S. and China.
The dollar moved higher on Friday as concerns over the upcoming European Union elections pressured the euro, while the British pound hit four month lows on Brexit worries.
The U.S. dollar index, which measures the greenback against six rival currencies, was up 0.18% to 97.852, for a weekly gain of 0.7%.
The dollar has been favoured as a safe-haven currency even as the U.S.-China trade war escalates.
“Rhetoric from both sides is getting more heated, making a U.S.-China deal seem a long way off,” Win Thin, global head of currency strategy at Brown Brothers Harriman in New York, said in a report.
“At this point, this means there will be no high-level negotiations between the two until a potential Trump-Xi (Jinping) meeting at the G20 meeting in late June.
This means the next round of tariffs will likely come into play, signalling further escalation and making a deal that much harder,” Thin said.
The euro briefly pared losses after the White House said President Donald Trump is delaying a decision for as long as six months on whether to impose tariffs on imported cars and parts to allow for more time for trade talks with the EU and Japan.
Sterling fell to the lowest since Jan. 15 after cross-party Brexit talks collapsed and concern grew about the impact Prime Minister Theresa May’s likely resignation would have on Britain’s exit from the EU.
The Australian dollar dropped to its lowest level since Jan. 3 on the escalating trade tensions.
Data on Friday showed U.S. consumer sentiment jumped to a 15-year high in early May on growing confidence over the economy’s outlook, though much of the surge was recorded before the trade war escalation.
Ahead of the coming week, Investing.com has compiled a list of significant events likely to affect the markets.
Monday, May 20
German PPI (April)
ECB's Praet Speaks
BoE’s Broadbent Speaks
FOMC Member Clarida Speaks
FOMC Member Williams Speaks
Market holiday – Canada
Tuesday, May 21
Fed Chair Powell Speaks
BoE Governor Carney Speaks
U.S. Existing Home Sales (April)
Eurozone Consumer Confidence (May)
FOMC Member Evans Speaks
FOMC Member Rosengren Speaks
Wednesday, May 22
U.K. CPI/PPI (April)
ECB's Praet Speaks
Canada Retail Sales (March)
FOMC Member Williams Speaks
FOMC Member Bostic Speaks
FOMC meeting Minutes
Thursday, May 23
German GDP (Q1)
French Flash Manufacturing/Services/ Composite PMI
German Flash Manufacturing/Services/ Composite PMI
Eurozone Flash Manufacturing/Services/ Composite PMI
German Ifo Business Climate Index (May)
ECB minutes
EU Parliamentary Elections
U.S. Initial Jobless Claims
U.S. New Home Sales (April)
U.S. Manufacturing/Services PMI (May)
FOMC Member Barkin Speaks
FOMC Member Bostic Speaks
FOMC Member Daly Speaks
FOMC Kaplan Speaks
Friday, May 24
U.K. Retail Sales (Apr)
ECB's Nowotny Speaks
U.S. Durable Goods Orders (April)
EU Parliamentary Elections
--Reuters contributed to this report
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