Weekly Forex Forecast: November 2 – 6

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.

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.