Weekly Forex Forecast: 11 – 15 May
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.
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
| Date | Time | Currency | Detail | Forecast | Previous |
| 11-May | 04:30 | AUD | NAB Business Confidence | 3 | |
| 09:00 | EUR | German WPI m/m | 0.40% | 1.00% | |
| All Day | EUR | Eurogroup Meetings | |||
| 14:00 | GBP | Official Bank Rate | 0.50% | 0.50% | |
| GBP | Asset Purchase Facility | 375B | 375B | ||
| Tentative | GBP | MPC Rate Statement | |||
| 17:00 | USD | Labor Market Conditions Index m/m | -0.3 | ||
| 02:01 | GBP | BRC Retail Sales Monitor y/y | 3.20% | ||
| 04:30 | AUD | Home Loans m/m | 1.10% | 1.20% | |
| 12-May | 12th-15th | NZD | REINZ HPI m/m | 6.70% | |
| 06:45 | JPY | 10-y Bond Auction | 0.37|2.7 | ||
| 08:00 | JPY | Leading Indicators | 105.50% | 104.80% | |
| 12th-16th | CNY | New Loans | 1210B | 1180B | |
| 12th-16th | CNY | M2 Money Supply y/y | 11.90% | 11.60% | |
| 11:30 | GBP | Manufacturing Production m/m | 0.30% | 0.40% | |
| GBP | Industrial Production m/m | 0.00% | 0.10% | ||
| 12:30 | AUD | Annual Budget Release | |||
| All Day | EUR | ECOFIN Meetings | |||
| 16:00 | USD | NFIB Small Business Index | 95.8 | 95.2 | |
| 17:00 | GBP | NIESR GDP Estimate | 0.60% | ||
| USD | JOLTS Job Openings | 5.21M | 5.13M | ||
| 19:45 | USD | FOMC Member Williams Speaks | |||
| 21:00 | USD | Federal Budget Balance | 138.0B | -52.9B | |
| 00:00 | NZD | RBNZ Financial Stability Report | |||
| 00:05 | NZD | RBNZ Gov Wheeler Speaks | |||
| 13-May | 01:45 | NZD | FPI m/m | 0.10% | |
| 02:50 | JPY | Current Account | 1.34T | 0.60T | |
| JPY | Bank Lending y/y | 2.60% | |||
| 04:30 | AUD | Wage Price Index q/q | 0.60% | 0.60% | |
| 08:00 | JPY | Economy Watchers Sentiment | 52.1 | 52.2 | |
| 08:30 | CNY | Industrial Production y/y | 6.10% | 5.60% | |
| CNY | Fixed Asset Investment ytd/y | 13.60% | 13.50% | ||
| CNY | Retail Sales y/y | 10.40% | 10.20% | ||
| EUR | French Prelim GDP q/q | 0.40% | 0.10% | ||
| 09:00 | EUR | German Prelim GDP q/q | 0.50% | 0.70% | |
| EUR | German Final CPI m/m | -0.10% | -0.10% | ||
| 09:45 | EUR | French Prelim Non-Farm Payrolls q/q | 0.00% | 0.00% | |
| EUR | French CPI m/m | 0.20% | 0.70% | ||
| 11:00 | EUR | Italian Prelim GDP q/q | 0.20% | 0.00% | |
| 11:30 | GBP | Average Earnings Index 3m/y | 1.70% | 1.70% | |
| GBP | Claimant Count Change | -20.1K | -20.7K | ||
| GBP | Unemployment Rate | 5.50% | 5.60% | ||
| 12:00 | EUR | Flash GDP q/q | 0.50% | 0.30% | |
| EUR | Industrial Production m/m | 0.10% | 1.10% | ||
| 12:30 | GBP | BOE Gov Carney Speaks | |||
| GBP | BOE Inflation Report | ||||
| Tentative | EUR | German 10-y Bond Auction | 0.13|1.5 | ||
| 14:30 | EUR | ECB Monetary Policy Meeting Accounts | |||
| 15:30 | USD | Core Retail Sales m/m | 0.40% | 0.40% | |
| USD | Retail Sales m/m | 0.30% | 0.90% | ||
| USD | Import Prices m/m | 0.30% | -0.30% | ||
| 17:00 | USD | Business Inventories m/m | 0.20% | 0.30% | |
| 17:30 | USD | Crude Oil Inventories | -3.9M | ||
| 20:01 | USD | 10-y Bond Auction | 1.93|2.6 | ||
| 01:30 | NZD | Business NZ Manufacturing Index | 54.5 | ||
| 01:45 | NZD | Retail Sales q/q | 1.60% | 1.70% | |
| 14-May | NZD | Core Retail Sales q/q | 1.50% | 1.50% | |
| 02:01 | GBP | RICS House Price Balance | 22% | 21% | |
| 02:50 | JPY | M2 Money Stock y/y | 3.60% | 3.60% | |
| 06:45 | JPY | 30-y Bond Auction | 1.38|2.9 | ||
| 09:00 | JPY | Prelim Machine Tool Orders y/y | 14.90% | ||
| 15:30 | CAD | NHPI m/m | 0.30% | 0.20% | |
| USD | PPI m/m | 0.10% | 0.20% | ||
| USD | Unemployment Claims | 271K | 265K | ||
| USD | Core PPI m/m | 0.10% | 0.20% | ||
| 17:30 | CAD | BOC Review | |||
| USD | Natural Gas Storage | 76B | |||
| 20:01 | USD | 30-y Bond Auction | 2.60|2.2 | ||
| 22:45 | CAD | Gov Council Member Patterson Speaks | |||
| 02:50 | JPY | PPI y/y | -2.10% | 0.70% | |
| 15th-19th | CNY | Foreign Direct Investment ytd/y | 10.60% | ||
| 15-May | 08:00 | JPY | Consumer Confidence | 41.9 | 41.7 |
| 10:15 | CHF | PPI m/m | -0.10% | 0.20% | |
| 11:30 | GBP | Construction Output m/m | 4.10% | -0.90% | |
| 15:30 | CAD | Manufacturing Sales m/m | 0.30% | -1.70% | |
| CAD | Foreign Securities Purchases | 7.23B | 9.27B | ||
| USD | Empire State Manufacturing Index | 5.1 | -1.2 | ||
| 16:15 | USD | Capacity Utilization Rate | 78.40% | 78.40% | |
| USD | Industrial Production m/m | 0.10% | -0.60% | ||
| 16:30 | GBP | CB Leading Index m/m | 0.60% | ||
| 17:00 | USD | Prelim UoM Consumer Sentiment | 96.5 | 95.9 | |
| USD | Prelim UoM Inflation Expectations | 2.60% | |||
| 23:00 | USD | TIC Long-Term Purchases | 9.8B |
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
