Weekly Forex Forecast: 11 – 15 May

May 09, 8:26 am
Weekly Spot FX Performance – 08/05/2015 (Source: Finviz.com)

The British Pound which opened the weak on an uncertain note due to the UK elections saw a surprise rebound as the UK voters gave the Conservatives Party, led by David Cameron a thumping majority squashing all speculation of a hung parliament. The British Pound saw a strong rally across the board last week making it the strongest currency among its peers.

Weekly Spot FX Performance – 08/05/2015 (Source: Finviz.com)
Weekly Spot FX Performance – 08/05/2015 (Source: Finviz.com)

The Kiwi continued its declines since the past two weeks with the Greenback coming in a second close. Economic data from the US remained mixed and with the recent jobs report for April managing to meet estimates, investors were not too happy however. Prospects of a June rate hike start to fade and the Greenback lost its footing across the board especially as new data showed that the first quarter GDP was most likely going to show a contraction.

Fundamentals for the Week 11 – 15 May

11-May04:30AUDNAB Business Confidence3
09:00EURGerman WPI m/m0.40%1.00%
All DayEUREurogroup Meetings
14:00GBPOfficial Bank Rate0.50%0.50%
GBPAsset Purchase Facility375B375B
TentativeGBPMPC Rate Statement
17:00USDLabor Market Conditions Index m/m-0.3
02:01GBPBRC Retail Sales Monitor y/y3.20%
04:30AUDHome Loans m/m1.10%1.20%
12-May12th-15thNZDREINZ HPI m/m6.70%
06:45JPY10-y Bond Auction0.37|2.7
08:00JPYLeading Indicators105.50%104.80%
12th-16thCNYNew Loans1210B1180B
12th-16thCNYM2 Money Supply y/y11.90%11.60%
11:30GBPManufacturing Production m/m0.30%0.40%
GBPIndustrial Production m/m0.00%0.10%
12:30AUDAnnual Budget Release
All DayEURECOFIN Meetings
16:00USDNFIB Small Business Index95.895.2
17:00GBPNIESR GDP Estimate0.60%
USDJOLTS Job Openings5.21M5.13M
19:45USDFOMC Member Williams Speaks
21:00USDFederal Budget Balance138.0B-52.9B
00:00NZDRBNZ Financial Stability Report
00:05NZDRBNZ Gov Wheeler Speaks
13-May01:45NZDFPI m/m0.10%
02:50JPYCurrent Account1.34T0.60T
JPYBank Lending y/y2.60%
04:30AUDWage Price Index q/q0.60%0.60%
08:00JPYEconomy Watchers Sentiment52.152.2
08:30CNYIndustrial Production y/y6.10%5.60%
CNYFixed Asset Investment ytd/y13.60%13.50%
CNYRetail Sales y/y10.40%10.20%
EURFrench Prelim GDP q/q0.40%0.10%
09:00EURGerman Prelim GDP q/q0.50%0.70%
EURGerman Final CPI m/m-0.10%-0.10%
09:45EURFrench Prelim Non-Farm Payrolls q/q0.00%0.00%
EURFrench CPI m/m0.20%0.70%
11:00EURItalian Prelim GDP q/q0.20%0.00%
11:30GBPAverage Earnings Index 3m/y1.70%1.70%
GBPClaimant Count Change-20.1K-20.7K
GBPUnemployment Rate5.50%5.60%
12:00EURFlash GDP q/q0.50%0.30%
EURIndustrial Production m/m0.10%1.10%
12:30GBPBOE Gov Carney Speaks
GBPBOE Inflation Report
TentativeEURGerman 10-y Bond Auction0.13|1.5
14:30EURECB Monetary Policy Meeting Accounts
15:30USDCore Retail Sales m/m0.40%0.40%
USDRetail Sales m/m0.30%0.90%
USDImport Prices m/m0.30%-0.30%
17:00USDBusiness Inventories m/m0.20%0.30%
17:30USDCrude Oil Inventories-3.9M
20:01USD10-y Bond Auction1.93|2.6
01:30NZDBusiness NZ Manufacturing Index54.5
01:45NZDRetail Sales q/q1.60%1.70%
14-MayNZDCore Retail Sales q/q1.50%1.50%
02:01GBPRICS House Price Balance22%21%
02:50JPYM2 Money Stock y/y3.60%3.60%
06:45JPY30-y Bond Auction1.38|2.9
09:00JPYPrelim Machine Tool Orders y/y14.90%
15:30CADNHPI m/m0.30%0.20%
USDPPI m/m0.10%0.20%
USDUnemployment Claims271K265K
USDCore PPI m/m0.10%0.20%
17:30CADBOC Review
USDNatural Gas Storage76B
20:01USD30-y Bond Auction2.60|2.2
22:45CADGov Council Member Patterson Speaks
02:50JPYPPI y/y-2.10%0.70%
15th-19thCNYForeign Direct Investment ytd/y10.60%
15-May08:00JPYConsumer Confidence41.941.7
10:15CHFPPI m/m-0.10%0.20%
11:30GBPConstruction Output m/m4.10%-0.90%
15:30CADManufacturing Sales m/m0.30%-1.70%
CADForeign Securities Purchases7.23B9.27B
USDEmpire State Manufacturing Index5.1-1.2
16:15USDCapacity Utilization Rate78.40%78.40%
USDIndustrial Production m/m0.10%-0.60%
16:30GBPCB Leading Index m/m0.60%
17:00USDPrelim UoM Consumer Sentiment96.595.9
USDPrelim UoM Inflation Expectations2.60%
23:00USDTIC Long-Term Purchases9.8B

Currencies/Events to Watch this Week

BoE Bank Rate & Jobs Report: After staging a strong rally last week, the British Pound will shift focus on the Central Bank’s interest rate decision this week. Although it is expected to be a non-event, focus will be on the tone of the statement especially given that the election risk is now done with. Markets currently expect a rate hike in early 2016. Later in the week, the UK’s monthly jobs report will also be due with the unemployment rate expected to decline to 5.5%.

Eurozone GDP & CPI: Focus in the Eurozone this week will shift to the flash GDP estimates and the CPI data. So far fundamentals have been mixed from the Eurozone but better than previously thought. Although the Euro is susceptible to the ongoing Greece negotiations, an upbeat fundamentals is likely to keep the Euro stronger across the board.

Kiwi Retail sales: After being subdued and being the weakest currency last week, the Kiwi looks to the retail sales data due this week. However, any upside news is likely to be contained by dovish narrative from RBNZ Governor Wheeler who is expected to deliver a speech ahead of the retail sales data release.

US Retail sales: Economic calendar from the US is light this week with the retail sales being the main focus followed by the Empire State Manufacturing Index and the Preliminary UoM inflation and consumer sentiment expectations. The Greenback has been weaker across the board and the retail sales could give insights into how the first month of the second quarter is shaping out in regards to the Q2 GDP

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John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.

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