Weekly Forex Forecast: 07/09 – 11/09

The Japanese Yen maintained its top position for the third consecutive week gaining 2.24% for the week. Market uncertainty surrounding the US Fed rate hikes as well as the China economic slowdown continues to play out on investors minds. The Swiss Franc gave up its gains has remains weaker against the stronger currencies including the Yen, US Dollar, the Euro and the Canadian Dollar. Last week’s important data included the US Non farm payrolls which despite falling short of estimates managed to pull down the US unemployment rate lower to 5.1%.

The commodity currencies, the Aussie and the Kiwi made up the tail end of the list, losing -3.58% and -2.7% respectively indicating that the market was in no mood to take on risk. A strong rebound in the US Dollar led to most of the currencies trading weaker with the exception of the safe haven Yen.

Fundamentals for the Week 07/09 – 11/09

Date	Time	Currency	Detail	Forecast	Previous
07-Sep	02:30	AUD	AIG Construction Index	47.1
	04:30	AUD	ANZ Job Advertisements m/m		-0.40%
	08:00	JPY	Leading Indicators	104.90%	106.50%
	09:00	EUR	German Industrial Production m/m	1.20%	-1.40%
	10:00	CHF	Foreign Currency Reserves		532B
	11:30	EUR	Sentix Investor Confidence	16.2	18.4
08-Sep	01:45	NZD	Manufacturing Sales q/q		-2.80%
	02:01	GBP	BRC Retail Sales Monitor y/y		1.20%
	02:50	JPY	Current Account	1.25T	1.30T
		JPY	Final GDP q/q	-0.40%	-0.40%
		JPY	Bank Lending y/y		2.60%
		JPY	Final GDP Price Index y/y	1.60%	1.60%
	04:30	AUD	NAB Business Confidence		4
	06:45	JPY	30-y Bond Auction		1.44|3.3
	Tentative	CNY	Trade Balance	48.6B	43.0B
	08:00	JPY	Economy Watchers Sentiment	52.1	51.6
	08:45	CHF	Unemployment Rate	3.30%	3.30%
	09:00	EUR	German Trade Balance	21.8B	22.0B
	09:45	EUR	French Gov Budget Balance		-58.5B
		EUR	French Trade Balance	-3.2B	-2.7B
	8th-10th	GBP	Halifax HPI m/m	0.50%	-0.60%
	12:00	EUR	Revised GDP q/q	0.30%	0.30%
	Tentative	GBP	30-y Bond Auction		2.73|1.9
	13:00	USD	NFIB Small Business Index	96	95.4
	17:00	USD	Labor Market Conditions Index m/m		1.1
	22:00	USD	Consumer Credit m/m	18.4B	20.7B
09-Feb	02:01	GBP	BRC Shop Price Index y/y		-1.40%
	02:50	JPY	M2 Money Stock y/y	4.10%	4.10%
	03:30	AUD	Westpac Consumer Sentiment		7.80%
	04:30	AUD	Home Loans m/m	0.80%	4.40%
	05:00	AUD	RBA Deputy Gov Lowe Speaks
	08:00	JPY	Consumer Confidence	40.6	40.3
	09:00	JPY	Prelim Machine Tool Orders y/y		1.70%
	11:30	GBP	Manufacturing Production m/m	0.20%	0.20%
		GBP	Trade Balance	-9.5B	-9.2B
		GBP	Industrial Production m/m	0.10%	-0.40%
	12:00	AUD	RBA Assist Gov Debelle Speaks
	Tentative	EUR	German 10-y Bond Auction		0.61|1.3
	15:15	CAD	Housing Starts	194K	193K
	15:30	CAD	Building Permits m/m		14.80%
	17:00	CAD	BOC Rate Statement
		CAD	Overnight Rate	0.50%	0.50%
		GBP	NIESR GDP Estimate		0.70%
		USD	JOLTS Job Openings	5.30M	5.25M
10-Sep	00:00	NZD	Official Cash Rate	2.75%	3.00%
		NZD	RBNZ Rate Statement
		NZD	RBNZ Monetary Policy Statement
	00:05	NZD	RBNZ Press Conference
	02:01	GBP	RICS House Price Balance	46%	44%
	02:50	JPY	Core Machinery Orders m/m	3.40%	-7.90%
		JPY	PPI y/y	-3.20%	-3.00%
	04:00	AUD	MI Inflation Expectations		3.70%
	04:30	AUD	Employment Change	5.2K	38.5K
		AUD	Unemployment Rate	6.20%	6.30%
		CNY	CPI y/y	1.90%	1.60%
		CNY	PPI y/y	-5.60%	-5.40%
	08:30	EUR	French Final Non-Farm Payrolls q/q	0.20%	0.20%
	09:45	EUR	French Industrial Production m/m	0.30%	-0.10%
	10th-14th	CNY	M2 Money Supply y/y	13.30%	13.30%
	10th-14th	CNY	New Loans	850B	1480B
	14:00	GBP	MPC Official Bank Rate Votes	1-0-8	1-0-8
		GBP	Official Bank Rate	0.50%	0.50%
		GBP	Asset Purchase Facility	375B	375B
		GBP	MPC Asset Purchase Facility Votes	0-0-9	0-0-9
	Tentative	GBP	MPC Rate Statement
	15:30	CAD	NHPI m/m	0.20%	0.30%
		CAD	Capacity Utilization Rate		82.70%
		USD	Unemployment Claims	279K	282K
		USD	Import Prices m/m	-1.70%	-0.90%
	17:00	USD	Wholesale Inventories m/m	0.20%	0.90%
	17:30	USD	Natural Gas Storage		94B
	18:00	USD	Crude Oil Inventories		4.7M
11-Sep	01:30	NZD	Business NZ Manufacturing Index		53.5
	01:45	NZD	FPI m/m		0.60%
	02:50	JPY	BSI Manufacturing Index		-6
	09:00	EUR	German Final CPI m/m	0.00%	0.00%
		EUR	German WPI m/m	0.20%	0.10%
	11:00	EUR	Italian Industrial Production m/m	0.90%	-1.10%
	11:30	GBP	Construction Output m/m	0.50%	0.90%
		GBP	Consumer Inflation Expectations		2.20%
	Day 1	EUR	ECOFIN Meetings
	15:30	USD	PPI m/m	-0.10%	0.20%
		USD	Core PPI m/m	0.10%	0.30%
	17:00	USD	Prelim UoM Consumer Sentiment	91.8	91.9
		USD	Prelim UoM Inflation Expectations		2.80%
	21:00	USD	Federal Budget Balance	-83.5B	-149.2B

 

Currencies/Events to Watch this Week

Australia Jobs Report: A relatively quiet week for the Aussie, Thursday will see the monthly jobs report from Australia. The currency has declined considerably in the past few weeks as economic data continues to fall below estimates. The monthly jobs numbers for Australia point to a median forecast estimates of the unemployment rate falling back to 6.2% after rising to 6.3% a month before. On the employment change, it is expected that the Australian economy added 5.2k jobs, down from 38.5k a month ago.

BoC Rate statement: The Canadian economy has so far managed to stay within the BoC’s expectations in terms of inflation and GDP. The most recent jobs report from Canada also showed a bit of promise despite the unemployment rate rising to 7%. The Bank of Canada will meet this Thursday and is expected to keep interest rates unchanged at 0.5%. An unchanged interest rate decision could see some bounce in the Canadian dollar in the near term.

China Inflation: China, which was closed for most of last week is back in business this week and the yearly CPI data is due for release on Thursday. Expectations are riding high for the inflation to have risen to 1.9%, against previous month’s modest rise to 1.6%. A miss on the estimates could potentially see the equity markets come under pressure again.

Eurozone Revised GDP: The quarterly revised GDP for the Eurozone is due for release on Tuesday with expectations of no change to the GDP which stands at 0.3% presently. Besides the GDP data there are no major market moving events from the Eurozone due this week.

BoE Meeting: The Bank of England meets on Thursday to discuss its monetary policy. While no change is expected, the markets will be eager to see the MPC vote count, which as of last month showed only one dissenter as the annual CPI in the UK started to show signs of bottoming. The British Pound has declined considerably and any shift to the MPC votes could see the Cable suffer larger setbacks.

Japan GDP: The final quarterly revised GDP numbers from Japan is due on Tuesday with expectations of a decline to -0.4%, unchanged from the previous release. Besides the GDP data there are no other major market moving events scheduled from Japan for the week.

RBNZ Monetary Policy: The Reserve Bank of New Zealand meets this week on Thursday for its monetary policy meeting. Expectations are for the RBNZ to cut rates by 25bps in light of subdued economic growth from the country. The rate cut would be a straight back to back cut for the RBNZ. In its previous monetary policy meeting, the Kiwi reacted bullishly and we could probably expect to see the same reaction at this meeting as well.

US PPI and UoM Inflation expectations: It will be a quiet and a short week for the US Markets, which are closed on Monday due to Labour Day holiday. The week is marked with only minor releases with the most important of all due on Friday. The University of Michigan’s inflation expectations will be one to watch out for. UoM’s inflation expectation stands at 2.8% currently.