The fear of recession in America stroke back

Currency and Stock Markets Weekly Outlook

Mon, Jun 9 2008, 13:07 GMT
by Adam Narczewski

X-Trade Brokers, XTB

After last Friday’s U.S labor market report, the fear of recession in America stroke back. Markets dropped and the dollar tumbled. How investors will react to the situation? The upcoming week can bring some answers since some interesting macroeconomic reports will be published.

On Monday, investors will pay attention to the Pending Home Sales publication from the U.S and Jean Claude Trichet who is due to speak at the Forum for New Diplomacy in Paris. Tuesday will be much more exciting. We will start the day with Ben Bernanke who will deliver a speech titled "Outstanding Issues in the Analysis of Inflation" at the Federal Reserve Bank of Boston 53rd Economic Conference in Massachusetts. Bank of England’s Governor, Mervyn King, will also be speaking at the British Bankers Association Annual Banking Conference in London. Close attention will be paid to the U.S and Canadian Trade Balance publication. For investors, who play on the Canadian dollar, the news of the day will be the Bank of Canada’s interest rate statement.

Wednesday will be calmer with the most important publication being the Beige Book. On Thursday, we will get reports from the U.S economy including retail sales and unemployment claims. Again, close attention will be paid to Bernanke who will give introductory remarks at the dedication of the New Federal Reserve Bank of Kansas City in Kansas City.

Same as last week, Friday might be the most important day of the week. Investors betting on the Australian dollar, important will be RBA’s Governor Stevens, who is expected to speak about economic conditions at the American Chamber of Commerce in Australia Luncheon in Melbourne. Also, a press conference by the Bank of Japan is expected. At the end of the day American CPI will be published and that is the publication that investors are waiting on. If inflation in the U.S really increases, it will be the last confirmation that the Fed will stop cutting interest rates.