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US housing data releases set to dominate the forex markets

forex graphTuesday’s economic calendar is set to be largely dominated by data releases from the US.

Housing will be the key area of attention, with the housing price index for May due out at 1pm GMT. This is expected to show a shift from 0.4% to 0.3% on a month on month basis.

Existing home sales data for June will follow at 2pm GMT. This is expected to also show a month on month shift, this time from 5.34 million to 5.33 million. Change in existing home sales data for June will show a month on month change from 2.5% to -0.2%.

Perhaps the main alternative source of news that could rock the foreign exchange markets is the result of the British Conservative Party’s leadership election, which comes at 11.45am GMT.

The battle has come down to Boris Johnson and Jeremy Hunt, both of whom have committed the UK to honouring the result of the Brexit referendum. Whichever wins will be named Prime Minister and will take over from Theresa May on Wednesday.

However, Johnson – who is the clear favourite – is expected to be somewhat more hard-line than Hunt. He is expected to reiterate his pledge to take Britain out of the bloc in October even if there is no deal.

Shortly after the result is announced, there will be a speech from the Bank of England’s Chief Economist, Andrew G. Haldane.

At 2pm GMT, there will be a preliminary European consumer confidence figure for July released. This is expected to show no change from its previous position of -7.2.

Looking ahead to Wednesday, French business climate data for July could have an effect on the performance of the euro. This metric is due out at 6.45am GMT and is expected to show no change from its previous position of 102.

Preliminary Markit PMI composite data for Germany, covering July, is due at 7.30am GMT. This is forecast to show a change from 45.0 to 45.2.

Looking ahead to Wednesday, there will be central bank events stretching across the whole day. The first one will be a speech from the Reserve Bank of Australia’s Governor, Philip Lowe, at 3.05am GMT.

Then the European Central Bank will make its interest rate decision at 11.45am GMT. This is widely expected to be held firm at 0%, with some indication of monetary easing later made.

On Friday, preliminary and annualised US gross domestic product data for the second quarter of 2019 is due out at 12.30pm GMT. This is expected to show a change from 3.1% to 1.8% – which, if it transpires, could be interpreted as a significant shock to the US system and an indication of poor economic health in the country.

If that is the case, it is likely that the Federal Reserve will factor the results of this release into its decision-making process before it meets next week to potentially cut interest rates.

US preliminary core personal consumption expenditures for the second quarter of 2019 will also be out at this time and are predicted to show a change from 0.5% to 0.6%.

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