News 17.07 - 20.07

The G20 (also known as the Group of Twenty) is an informal association of the largest economically developed countries.

The G20 countries account for about 80% of global GDP, 75% of trade turnover, and even 60% of the world's population.

Today, the G20 includes: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Korea, South Africa, Turkey, the United Kingdom, the United States, and the European Union (EU).

The topics discussed at G20 summits change from year to year. Recent examples include climate change, health and epidemic prevention, migration, digitalization, and women's economic empowerment. If all 20 members of the group can reach agreement on these topics, they issue a joint declaration outlining their approach to addressing these issues. This is not always easy, as some countries may take a hard line on certain issues.

As the summit members bring the global economy to the table, it depends on the statements and agreements that are made. Markets can react in different ways.

Manufacturing PMI - determines the level of economic health of the manufacturing sector by surveying about 200 manufacturers.

A lower value signals a decline in production activity, while a higher value indicates its growth.

Core Retail Sales Index - reflects changes in retail sales, excluding automobiles. This is an important indicator of consumer spending, as well as the pace of development of the US business and economy.

Figures above expectations are viewed as positive/bullish for the USD, while data below the forecast is seen as negative for the USD.

The retail sales index is a measure of all goods sold by retailers, including both hypermarkets and small stores. It is an important indicator of consumer spending and reflects consumer confidence.

Industrial Production - reflects the change in real production in the United States in the reporting month compared to the previous month. The value of the index is calculated for the base period, which is assigned a reference level of 100% (2012).

The indicator is calculated on the basis of two types of standard data: production volume expressed in physical units and data on the inclusion of materials in the production process. Data on physical output are obtained from trade associations and government agencies. When such data are not available, output is calculated based on hours worked by employees by industry (collected monthly by the Bureau of Labor Statistics).

The Fed uses this index to assess inflation and the state of the country's manufacturing sector. This indicator can be used to forecast GDP for the current period. If the index exceeds the forecast, it indicates an increase in manufacturing activity and may have a positive impact on the US dollar.

Building permits, m/m - demonstrates how the number of permits for the construction of new residential buildings issued by state authorities changed in the reporting month compared to the previous month.

The Federal Reserve Board uses the indicator in analyzing economic conditions both at the national level and separately by region. The Department of Housing and Urban Development uses the data to develop housing programs. Banks use the statistics to assess the demand for mortgage loans in the short and medium term.

An increase in the number of building permits issued indicates an improvement in economic sentiment and an increase in investment in construction. However, if the volume of new home construction is lower than the volume of permits issued, this may indicate unfavorable economic conditions that are causing projects to be postponed.

An increase in the number of building permits could have a positive impact on the dollar.

Initial Jobless Claims in the United States - determines the number of people who filed for unemployment benefits for the first time during the past week. This data is collected by the Department of Labor and published in a weekly report.

The number of applications for benefits is used to measure the state of the labor market, as an increase means that fewer people are being hired.

A reading above expectations is seen as a negative/bearish market for the USD, while a reading below expectations indicates a positive/bullish direction for the USD.

An index of the number of sold houses that make up the secondary housing market. The indicator complements the Housing starts and New home sales reports, making the picture of the construction segment more complete and understandable. The indicator is calculated by the National Association of Realtors. The calculation compares the number of homes sold last month with the number of homes sold in the current month. The resulting indicator is converted into an annual format by multiplying it by 12.

The secondary housing market in America is a large part of the economy, especially since a large number of contractors are involved in renovating real estate before it is sold. As a result, the sale of secondary housing stimulates economic activity in the construction sector and contributes to employment growth, which, of course, is reflected in mortgage rates.

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