Weekly Forex Forecast for 06-10 April 2015 features the following:
A short trading week saw volatility rise on Friday as the March NFP numbers missed estimates by a large margin, further fuelled by downward revisions to January and February numbers as well. The US Dollar saw a knee-jerk selloff across the board.
Figure 1: Weekly Spot FX Performance – 03/04/2015 (Source: Finviz.com)
Over the week, the US Dollar was the second-most least performer with the Australian dollar taking the top spot for being the biggest loser of the week. Sentiment soured as Iron Ore prices plummeted and weaker PMI’s from China weighed in on the Aussie dollar. Market speculation drove the Aussie weaker on expectations of a rate cut from the RBA this week.
Fundamentals for the Week 06 – 10 April
| Date | Currency | Detail | Forecast | Previous | |
| 06-Apr | All Day | NZD | Bank Holiday | ||
| All Day | AUD | Bank Holiday | |||
| All Day | CNY | Bank Holiday | |||
| 08:00 | JPY | Leading Indicators | 105.20% | 105.50% | |
| All Day | CHF | Bank Holiday | |||
| All Day | EUR | French Bank Holiday | |||
| All Day | EUR | German Bank Holiday | |||
| All Day | EUR | Italian Bank Holiday | |||
| 10:00 | EUR | Spanish Unemployment Change | -13.5K | ||
| All Day | GBP | Bank Holiday | |||
| 15:30 | USD | FOMC Member Dudley Speaks | |||
| 16:45 | USD | Final Services PMI | 58.6 | 58.6 | |
| 17:00 | CAD | Ivey PMI | 51.1 | 49.7 | |
| USD | ISM Non-Manufacturing PMI | 56.6 | 56.9 | ||
| USD | Labor Market Conditions Index m/m | 4 | |||
| 17:30 | CAD | BOC Business Outlook Survey | |||
| 07-Apr | 02:30 | AUD | AIG Services Index | 51.7 | |
| 04:30 | AUD | Retail Sales m/m | 0.40% | 0.40% | |
| AUD | ANZ Job Advertisements m/m | 0.90% | |||
| 07:30 | AUD | Cash Rate | 2.25% | 2.25% | |
| AUD | RBA Rate Statement | ||||
| 10:00 | CHF | Foreign Currency Reserves | 509.3B | ||
| 7th-8th | GBP | Halifax HPI m/m | -0.30% | ||
| 10:15 | EUR | Spanish Services PMI | 56.5 | 56.2 | |
| 10:45 | EUR | Italian Services PMI | 51.1 | 50 | |
| 11:00 | EUR | Final Services PMI | 54.3 | 54.3 | |
| 11:30 | EUR | Sentix Investor Confidence | 20.9 | 18.6 | |
| GBP | Services PMI | 57.1 | 56.7 | ||
| GBP | FPC Meeting Minutes | ||||
| 12:00 | EUR | PPI m/m | 0.10% | -0.90% | |
| 17:00 | USD | JOLTS Job Openings | 5.01M | 5.00M | |
| USD | IBD/TIPP Economic Optimism | 49.2 | 49.1 | ||
| 22:00 | USD | Consumer Credit m/m | 13.6B | 11.6B | |
| 08-Apr | 02:01 | GBP | BRC Shop Price Index y/y | -1.70% | |
| 02:50 | JPY | Current Account | 0.61T | 1.06T | |
| Tentative | JPY | Monetary Policy Statement | |||
| 08:00 | JPY | Economy Watchers Sentiment | 50.9 | 50.1 | |
| 09:00 | EUR | German Factory Orders m/m | 1.50% | -3.90% | |
| Tentative | JPY | BOJ Press Conference | |||
| 09:45 | EUR | French Trade Balance | -3.8B | -3.7B | |
| 10:15 | CHF | CPI m/m | 0.10% | -0.30% | |
| 11:10 | EUR | Retail PMI | 46.4 | ||
| 11:30 | GBP | BOE Credit Conditions Survey | |||
| GBP | Housing Equity Withdrawal q/q | -10.2B | -10.9B | ||
| 12:00 | EUR | Retail Sales m/m | -0.10% | 1.10% | |
| 16:30 | USD | FOMC Member Dudley Speaks | |||
| 17:30 | USD | Crude Oil Inventories | 4.8M | ||
| 20:01 | USD | 10-y Bond Auction | 2.14|2.7 | ||
| 21:00 | USD | FOMC Meeting Minutes | |||
| 09-Apr | 02:01 | GBP | RICS House Price Balance | 15% | 14% |
| 02:30 | AUD | AIG Construction Index | 43.9 | ||
| 9th-13th | NZD | REINZ HPI m/m | 0.80% | ||
| 06:45 | JPY | 30-y Bond Auction | 1.51|3.8 | ||
| 08:00 | JPY | BOJ Monthly Report | |||
| 09:00 | EUR | German Industrial Production m/m | 0.10% | 0.60% | |
| EUR | German Trade Balance | 20.3B | 19.7B | ||
| JPY | Prelim Machine Tool Orders y/y | 28.90% | |||
| 9th-13th | CNY | New Loans | 1050B | 1020B | |
| 9th-13th | CNY | M2 Money Supply y/y | 12.30% | 12.50% | |
| 11:30 | GBP | Trade Balance | -9.1B | -8.4B | |
| Tentative | EUR | Spanish 10-y Bond Auction | 1.02|1.7 | ||
| 14:00 | GBP | Official Bank Rate | 0.50% | 0.50% | |
| GBP | Asset Purchase Facility | 375B | 375B | ||
| Tentative | GBP | MPC Rate Statement | |||
| 15:30 | CAD | Building Permits m/m | 5.10% | -12.90% | |
| CAD | NHPI m/m | 0.10% | -0.10% | ||
| USD | Unemployment Claims | 281K | 268K | ||
| 17:00 | USD | Wholesale Inventories m/m | 0.10% | 0.30% | |
| 17:30 | USD | Natural Gas Storage | -18B | ||
| 20:01 | USD | 30-y Bond Auction | 2.68|2.2 | ||
| 10-Apr | 02:50 | JPY | Bank Lending y/y | 2.50% | |
| 04:30 | AUD | Home Loans m/m | 3.10% | -3.50% | |
| CNY | CPI y/y | 1.30% | 1.40% | ||
| CNY | PPI y/y | -4.70% | -4.80% | ||
| 08:45 | CHF | Unemployment Rate | 3.20% | 3.20% | |
| 09:45 | EUR | French Gov Budget Balance | -9.4B | ||
| EUR | French Industrial Production m/m | -0.10% | 0.40% | ||
| 11:30 | GBP | Manufacturing Production m/m | 0.40% | -0.50% | |
| GBP | Construction Output m/m | 2.30% | -2.60% | ||
| GBP | Industrial Production m/m | 0.30% | -0.10% | ||
| 15:15 | CAD | Housing Starts | 175K | 156K | |
| 15:30 | CAD | Employment Change | 0.1K | -1.0K | |
| CAD | Unemployment Rate | 6.80% | 6.80% | ||
| USD | FOMC Member Lacker Speaks | ||||
| USD | Import Prices m/m | -0.40% | 0.40% | ||
| 17:00 | GBP | NIESR GDP Estimate | 0.60% | ||
| 21:00 | USD | Federal Budget Balance | -43.2B | -192.3B |
Currencies/Events to Watch this Week
Will the RBA cut rates? The markets have priced in a 25bps rate cut from the RBA as it meets on Tuesday for setting the monthly monetary policy. This could pose some significant upside risks should the RBA stand pat on policy, for which there is a very good chance. Ahead of the RBA’s rate statement, retail sales are also on the tap, which could add significant noise across the AUD crosses.
BoJ Monetary policy: The Bank of Japan meets on 8th April for its monthly monetary policy. With inflation continuing to remain subdued, there have been whispers from a few quarters that the BoJ could ease again by expanding its QQE program. Recent Tankan manufacturing and non-manufacturing data was mixed. However, this is unlikely to see the BoJ take another major step to expand its monetary policy. In this aspect, the BoJ’s April meeting could potentially be a close call and could weigh in on the JPY crosses.
Greece stalemate, should EUR worry? There has been conflicting rumors about Greece planning to default on its IMF loan repayment due on April 9th with some officials being quoted as stating that the interest of the Greek people comes first. With the EU and Greek officials not willing to budge, the Euro could be at risk should Greece trip the wire. However, it would be hard to judge the Euro’s reaction to the outcome. Will the Euro rally eventually when it becomes more evident that a Grexit is just around the corner, or will the Euro plummet on uncertainty?
BoE rate policy: The Bank of England meets on 10th April for its monthly monetary policy meeting. Widely expected to keep policy unchanged and could perhaps be a non event in all likelihood with the British Sterling remaining a muted spectator to the event. There are no notable releases from the UK this week, so the Cable could be mostly riding on the volatility from the US Dollar.
Canada unemployment rate: Last month’s unemployment data from Canada was disappointing but the markets remained neutral as the labor report largely met estimates. The Canadian labor data will be released this week, on 10th April for the month of March and expectations are for a rebound in the employment change while expecting unemployment rate to remain steady. A miss of estimates in either the employment change or the unemployment rate could see the Canadian dollar either breakout bullish or bearish.
FOMC Meeting Minutes: Will the March FOMC meeting minutes see a dovish or a hawkish stand from the Fed? That will be the focus heading into next week. A hawkish outlook from the Fed could well provide some respite for USD bulls. But if the markets perceive the meeting minutes to be dovish, it could seriously hamper the prospects of a June rate liftoff and further weaken the US Dollar.
