Weekly Forex Forecast: November 2 – 6

Nov 02 2015, 5:25 am

The Australian dollar turned out to be the weakest currency last week as weak inflation numbers saw the Aussie being sold off ahead of the RBA’s meeting the coming week. While expectations remain for the RBA to hold rates steady, there is a view that the RBA could cut rates in light of the new inflation data. AUDUSD was down -1.11%, closing the week near the lows of 0.7136. The Swiss Franc came in with losses of -0.90% despite lack of any clear data from Switzerland.

Weekly Spot FX Performance – 30/10/2015 (Source: Finviz.com)
Weekly Spot FX Performance – 30/10/2015 (Source: Finviz.com)

The British Pound came out on the tops rising 0.75% as the Q3 GDP numbers barely managed to meet the estimates, rising 0.5% for the third quarter, below estimates of 0.6%. GBPUSD managed to reverse off the lows near 1.526 to close the week at 1.5426, but the Cable could come under pressure into the BoE’s monetary policy meeting this coming week. The Canadian dollar was the stronger performing currencies and managed to ride off the recent strength in Crude oil prices. USDCAD settled with weekly gains of 0.70%, closing at 1.3077.

Fundamentals for the Week 02/11 – 06/11

Date Time Currency Detail Forecast Previous
02-Nov 00:30 AUD AIG Manufacturing Index 52.1
01:30 AUD MI Inflation Gauge m/m 0.30%
02:30 AUD Building Approvals m/m 1.10% -6.90%
03:35 JPY Final Manufacturing PMI 52.1 52.5
03:45 CNY Caixin Manufacturing PMI 47.7 47.2
07:30 AUD Commodity Prices y/y -21.30%
10:15 CHF Retail Sales y/y 0.20% -0.30%
EUR Spanish Manufacturing PMI 51.9 51.7
10:30 CHF Manufacturing PMI 50.2 49.5
10:45 EUR Italian Manufacturing PMI 52.9 52.7
10:50 EUR French Final Manufacturing PMI 50.7 50.7
10:55 EUR German Final Manufacturing PMI 51.6 51.6
11:00 EUR Final Manufacturing PMI 52 52
11:30 GBP Manufacturing PMI 51.3 51.5
16:30 CAD RBC Manufacturing PMI 48.6
16:45 USD Final Manufacturing PMI 54 54
17:00 USD ISM Manufacturing PMI 50 50.2
USD Construction Spending m/m 0.50% 0.70%
USD ISM Manufacturing Prices 39.5 38
19:00 USD FOMC Member Williams Speaks
03-Nov 02:00 NZD ANZ Commodity Prices m/m 5.50%
05:30 AUD Cash Rate 2.00% 2.00%
AUD RBA Rate Statement
10:00 EUR Spanish Unemployment Change 70.3K 26.1K
11:30 GBP Construction PMI 58.9 59.9
17:00 USD Factory Orders m/m -0.80% -1.70%
USD IBD/TIPP Economic Optimism 47.5 47.3
Tentative NZD GDT Price Index -3.10%
All Day USD Total Vehicle Sales 17.8M 18.2M
21:00 EUR ECB President Draghi Speaks
23:45 NZD Employment Change q/q 0.40% 0.30%
NZD Unemployment Rate 6.00% 5.90%
NZD Labor Cost Index q/q 0.50% 0.50%
04-Nov 00:30 AUD AIG Services Index 52.3
01:50 JPY Monetary Base y/y 36.20% 35.10%
02:01 GBP BRC Shop Price Index y/y -1.90%
02:30 AUD Retail Sales m/m 0.40% 0.40%
AUD Trade Balance -2.92B -3.10B
03:45 CNY Caixin Services PMI 50.5
07:00 JPY Consumer Confidence 41.1 40.6
10:15 EUR Spanish Services PMI 55.5 55.1
10:45 EUR Italian Services PMI 53.7 53.3
10:50 EUR French Final Services PMI 52.3 52.3
10:55 EUR German Final Services PMI 55.2 55.2
11:00 EUR ECB President Draghi Speaks
EUR Final Services PMI 54.2 54.2
11:30 GBP Services PMI 54.6 53.3
12:00 EUR PPI m/m -0.40% -0.80%
12:30 USD FOMC Member Brainard Speaks
15:15 USD ADP Non-Farm Employment Change 181K 200K
15:30 CAD Trade Balance -2.5B
USD Trade Balance -43.2B -48.3B
16:45 USD Final Services PMI 54.6 54.4
17:00 USD Fed Chair Yellen Testifies
USD ISM Non-Manufacturing PMI 56.6 56.9
17:30 USD Crude Oil Inventories 3.4M
21:30 USD FOMC Member Dudley Speaks
05-Nov 00:25 AUD RBA Gov Stevens Speaks
01:50 JPY Monetary Policy Meeting Minutes
02:30 USD FOMC Member Fischer Speaks
03:00 AUD RBA Deputy Gov Lowe Speaks
05:45 JPY 10-y Bond Auction 0.34|3.0
08:45 CHF SECO Consumer Climate -14 -19
09:00 EUR German Factory Orders m/m 1.10% -1.80%
10:15 CHF CPI m/m 0.00% 0.10%
11:00 EUR ECB Economic Bulletin
11:10 EUR Retail PMI 51.9
12:00 EUR EU Economic Forecasts
EUR Retail Sales m/m 0.20% 0.00%
Tentative EUR Spanish 10-y Bond Auction 1.77|2.2
Tentative EUR French 10-y Bond Auction 0.98|2.2
13:45 EUR ECB President Draghi Speaks
14:00 GBP BOE Inflation Report
GBP MPC Official Bank Rate Votes 1-0-8 1-0-8
GBP Monetary Policy Summary
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
14:30 USD Challenger Job Cuts y/y 93.20%
14:45 GBP BOE Gov Carney Speaks
15:30 USD Unemployment Claims 264K 260K
USD FOMC Member Dudley Speaks
USD Prelim Nonfarm Productivity q/q 0.10% 3.30%
USD Prelim Unit Labor Costs q/q 2.20% -1.40%
16:10 USD FOMC Member Fischer Speaks
17:00 CAD Ivey PMI 53.7
17:30 USD Natural Gas Storage
20:30 USD FOMC Member Lockhart Speaks
06-Nov 00:30 AUD AIG Construction Index 51.9
02:30 AUD RBA Monetary Policy Statement
03:00 AUD RBA Assist Gov Edey Speaks
07:00 JPY Leading Indicators 102.10% 103.50%
09:00 EUR German Industrial Production m/m 0.60% -1.20%
09:45 EUR French Gov Budget Balance -89.7B
EUR French Trade Balance -3.1B -3.0B
10:00 CHF Foreign Currency Reserves 542B
11:30 GBP Manufacturing Production m/m 0.50% 0.50%
GBP Trade Balance -10.7B -11.1B
GBP Industrial Production m/m -0.10% 1.00%
15:30 CAD Employment Change 12.1K
CAD Unemployment Rate 7.10%
CAD Building Permits m/m -3.70%
USD Non-Farm Employment Change 179K 142K
USD Unemployment Rate 5.10% 5.10%
USD Average Hourly Earnings m/m 0.20% 0.00%
17:00 GBP NIESR GDP Estimate 0.50%
22:00 USD Consumer Credit m/m 18.1B 16.0B
23:15 USD FOMC Member Brainard Speaks

Time: GMT+2

Currencies/Events to Watch this Week

RBA Cash Rate: The Reserve Bank of Australia meets next week and rates are expected to be on hold despite some minor hiccups last month. While Australian consumer inflation remains subdued, the producer price index increased strongly pointing to a recovery in consumer inflation in the coming quarters. Also, taking a clue from other Central Banks, the RBA might remain on the sidelines until the December FOMC meeting. Besides the RBA statement, other major economic releases include the speech by RBA Governor Stevens, retail sales and trade balance. This week will also see the RBA monetary policy statement being released.

Canada Employment Report: The monthly jobs report from Canada will be the major event this week as the Canadian unemployment rate stands at 7.1%. Recent economic data has shown that Canada’s economy has managed to weather the recent declines in Crude oil and as such the said sector is likely to contribute to the jobs market. USDCAD will be under pressure this week as both the US and Canadian jobs report will be released simultaneously.

Draghi’s speeches: ECB President, Mario Draghi is due to speak during the week and the markets will be looking to any new information from the ECB Chief after last week’s Eurozone inflation report showed a modest pick up on the headline inflation for the year. Besides Draghi’s speech other main events from the Eurozone include the services and manufacturing PMI numbers.

BoE Monetary Policy: The Bank of England meets this week for its monetary policy preview. No major changes are expected at this week’s meeting and it is also likely that the MPC bank rate votes will remain unchanged at 1 – 8. Other economic events from the UK this week includes the manufacturing, construction and services PMI along with manufacturing and industrial production numbers due for release.

New Zealand labour markets: The quarterly employment change numbers are due from New Zealand this week with expectations slightly dovish. The New Zealand unemployment rate is expected to rise 6.0% up from 5.9% previously while the quarterly employment change is expected to rise 0.4%, from 0.3% previously. Besides the above, the Global dairy trade index is also due.

Data heavy week for the US: The week ahead will see a lot of data from the US starting from Wednesday. The monthly ADP private payrolls report is due with expectations that the US economy added 181k jobs. The NFP report, due on the 6th of November is expected to show the US unemployment rate coming in at 5.1%, unchanged for the third month in a row, while the monthly jobs is expected to rise 182k, up from 142k seen last month. Expectations for the average hourly earnings are also for a rise of 0.2% after staying flat last month. With the FOMC keeping December hike alive, this week’s NFP report will definitely be closely watched.

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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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