The US dollar saw another week of strong declines with the Fed leaving monetary policy unchanged and economic data from the US showing a weaker pace of growth in the first quarter, with the GDP rising 0.50%. Monthly economic data was also weak with durable goods orders showing a lesser than expected pace of growth. Only next to the US dollar was the Australian dollar which weakened significantly on a risk aversion mode as well as ahead of the RBA’s monetary policy decision next week.
The yen emerged on the tops this week as the Bank of Japan left monetary policy unchanged, surprising many who expected the central bank to unleash a host of monetary policy tools to weaken the yen. The inaction led to the yen being bid up, gaining over 5% on the week. USDJPY along fell over 4.50% for the week and by late Friday, the euro also managed to make up for the lost ground, rising back above the $1.4 handle.
Fundamentals for the Week 02/05 – 06/05
| Date | Time | Currency | Event | Forecast | Previous |
| 02-May | 00:15 | USD | FOMC Member Dudley Speaks | ||
| 00:30 | AUD | AIG Manufacturing Index | 58.1 | ||
| 02:00 | AUD | MI Inflation Gauge m/m | 0.00% | ||
| 02:30 | AUD | NAB Business Confidence | 6 | ||
| 03:00 | JPY | Final Manufacturing PMI | 48 | 48 | |
| 07:30 | AUD | Commodity Prices y/y | -15.40% | ||
| 08:15 | CHF | Retail Sales y/y | 0.30% | -0.20% | |
| EUR | Spanish Manufacturing PMI | 53 | 53.4 | ||
| 08:30 | CHF | Manufacturing PMI | 53.6 | 53.2 | |
| 08:45 | EUR | Italian Manufacturing PMI | 54.1 | 53.5 | |
| 08:50 | EUR | French Final Manufacturing PMI | 48.3 | 48.3 | |
| 08:55 | EUR | German Final Manufacturing PMI | 51.9 | 51.9 | |
| 09:00 | EUR | Final Manufacturing PMI | 51.5 | 51.5 | |
| 10:30 | EUR | German Buba President Weidmann Speaks | |||
| 14:30 | CAD | RBC Manufacturing PMI | 51.5 | ||
| 14:45 | USD | Final Manufacturing PMI | 51 | 50.8 | |
| 15:00 | EUR | ECB President Draghi Speaks | |||
| USD | ISM Manufacturing PMI | 51.6 | 51.8 | ||
| USD | Construction Spending m/m | 0.50% | -0.50% | ||
| USD | ISM Manufacturing Prices | 51 | 51.5 | ||
| 17:30 | CHF | SNB Chairman Jordan Speaks | |||
| 03-May | 02:30 | AUD | Building Approvals m/m | -1.80% | 3.10% |
| 02:45 | CNY | Caixin Manufacturing PMI | 49.8 | 49.7 | |
| 05:30 | AUD | Cash Rate | 2.00% | 2.00% | |
| AUD | RBA Rate Statement | ||||
| 09:30 | GBP | Manufacturing PMI | 51.3 | 51 | |
| 10:00 | EUR | PPI m/m | 0.10% | -0.70% | |
| 10:30 | AUD | Annual Budget Release | |||
| 15:30 | USD | FOMC Member Mester Speaks | |||
| 17:30 | CAD | BOC Gov Poloz Speaks | |||
| 23:45 | NZD | Employment Change q/q | 0.60% | 0.90% | |
| NZD | Unemployment Rate | 5.50% | 5.30% | ||
| NZD | Labor Cost Index q/q | 0.30% | 0.40% | ||
| 04-May | 00:01 | GBP | BRC Shop Price Index y/y | -1.70% | |
| 00:30 | AUD | AIG Services Index | 49.5 | ||
| 02:00 | NZD | ANZ Commodity Prices m/m | -1.30% | ||
| 07:45 | EUR | French Trade Balance | -4.2B | -5.2B | |
| 08:00 | EUR | Spanish Unemployment Change | -86.6K | -58.2K | |
| 08:15 | EUR | Spanish Services PMI | 55.1 | 55.3 | |
| 08:45 | EUR | Italian Services PMI | 51.3 | 51.2 | |
| 08:50 | EUR | French Final Services PMI | 50.8 | 50.8 | |
| 08:55 | EUR | German Final Services PMI | 50.5 | 54.6 | |
| 09:00 | EUR | Final Services PMI | 53.3 | 53.2 | |
| 09:30 | GBP | Construction PMI | 54.1 | 54.2 | |
| 10:00 | EUR | Retail Sales m/m | 0.10% | 0.20% | |
| 13:15 | USD | ADP Non-Farm Employment Change | 205K | 200K | |
| 13:30 | CAD | Trade Balance | -1.2B | -1.9B | |
| USD | Prelim Nonfarm Productivity q/q | -1.30% | -2.20% | ||
| USD | Prelim Unit Labor Costs q/q | 2.90% | 3.30% | ||
| USD | Trade Balance | -45.6B | -47.1B | ||
| 14:45 | USD | Final Services PMI | 52.1 | 52.1 | |
| 15:00 | USD | ISM Non-Manufacturing PMI | 54.9 | 54.5 | |
| USD | Factory Orders m/m | 0.70% | -1.70% | ||
| 15:30 | USD | Crude Oil Inventories | 2.0M | ||
| 05-May | 02:00 | AUD | HIA New Home Sales m/m | -5.30% | |
| 02:30 | AUD | Retail Sales m/m | 0.30% | 0.00% | |
| AUD | Trade Balance | -2.95B | -3.41B | ||
| 02:45 | CNY | Caixin Services PMI | 52.6 | 52.2 | |
| 08:30 | GBP | Halifax HPI m/m | 0.10% | 2.60% | |
| 09:00 | EUR | ECB Economic Bulletin | |||
| 09:10 | EUR | Retail PMI | 49.2 | ||
| 09:30 | GBP | Services PMI | 53.6 | 53.7 | |
| 12:30 | USD | Challenger Job Cuts y/y | 31.70% | ||
| 13:30 | CAD | Building Permits m/m | 15.50% | ||
| USD | Unemployment Claims | 261K | 257K | ||
| 16:30 | USD | FOMC Member Bullard Speaks | |||
| 06-May | 00:15 | USD | FOMC Member Bullard Speaks | ||
| 00:30 | AUD | AIG Construction Index | 45.2 | ||
| 00:50 | JPY | Monetary Base y/y | 29.30% | 28.50% | |
| 02:30 | AUD | RBA Monetary Policy Statement | |||
| 08:00 | CHF | Foreign Currency Reserves | 576B | ||
| 13:30 | CAD | Employment Change | 0.2K | 40.6K | |
| CAD | Unemployment Rate | 7.20% | 7.10% | ||
| USD | Average Hourly Earnings m/m | 0.30% | 0.30% | ||
| USD | Non-Farm Employment Change | 206K | 215K | ||
| USD | Unemployment Rate | 5.00% | 5.00% | ||
| 15:00 | CAD | Ivey PMI | 50.1 | ||
| 20:00 | USD | Consumer Credit m/m | 16.1B | 17.2B |
Time: GMT+1
Currencies/Events to Watch this Week
AUD: It is a busy week for the Australian dollar with key economic data lined up over the week. Although starting off softly on Monday, the RBA monetary policy meeting is up on Tuesday. Despite last week’s quarterly inflation fall 0.20%, the RBA is widely expected to hold rates steady at this week’s meeting and will likely take a call in June if inflation continues to fall further. Building approvals and retail sales data make up the remainder of the data with expectations that Australian retail sales increased 0.30% in March.
NZD: Following the RBNZ’s decision to hold rates steady last week, the markets will focus on this week’s unemployment data. Reporting for the first quarter of 2016, New Zealand’s unemployment rate is expected to rise to 5.50% on the quarter up from 5.30% in Q4, 2015. However, hourly earnings report is expected to show an increase of 0.50%, up from 0.20% previously. Global dairy price index will also be coming out later in the week.
EUR: Economic data from the Eurozone will see the PMI data coming out over the week. Manufacturing PMI is expected to remain unchanged at 51.5, including services PMI expected to see no change at 53.2, same as in March. Retail sales data is due on Wednesday and is expected to show no change in March on a month over month basis, while retail sales on a year over year basis is expected to rise 2.60%.
GBP: The focus this week will be the manufacturing, construction and services PMI with mildly soft expectations. Manufacturing PMI is expected to rise by 2 points to 51.2 in April while construction PMI is expected to slip to 54, from 54.2 in March. Services PMI is also expected to come out weaker at 53.5, following March’s 53.7.
CAD: Economic data from Canada this week will see the building permits for the month of March, but focus will be on Friday’s jobs report. Canadian unemployment is expected to rise to 7.20% in April, following a 7.10% surprise decline in March. No change is expected on the net employment change. The data will be followed by the Canadian Ivey PMI.
USD: The week ahead will see the Fed members start with their speaking engagements with Dudley, Lockhart, Williams, Mester lined up for the week. On Monday, the ISM manufacturing index is due for release with expectations that manufacturing slipped to 51.5 in April, following March’s increase to 51.8. Construction spending is expected to show a gain of 0.40% for the month. On Wednesday, the ADP payrolls report is expected to show a 200k gain in monthly employment, while Friday’s nonfarm payrolls report is expected to show the US economy adding 205k jobs in April. The US unemployment rate is expected to stay put at 5.0%
