Forex Trading Library

Weekly Forex Preview: US Data to gain attention

1 316

Equity markets spiked on Friday morning and posted a turnaround in what would have otherwise seen another week of slump and risk off sentiment. The markets rallied as the Bank of Japan introduced negative interest rates. Despite a weak fourth quarter GDP numbers from the US, the BoJ’s move managed to rescue the markets with Crude Oil prices also posting decent gains to settle with 4.40% for the week at $33.6 a barrel. The Yen was, of course, the weakest currency, losing out nearly -1.90% while the commodity risk assets, the AUD and the CAD managed to emerge on the tops with 1.21% and 1.05% gains for the week.

Weekly Spot FX Performance – 29/01/2016 (Source: Finviz.com)
Weekly Spot FX Performance – 29/01/2016 (Source: Finviz.com)

The risk on sentiment managed to send the Swiss Franc tumbling as well, which lost out -0.78% for the week. The Euro was flat with 0.34% gains for the week.

Fundamentals for the Week 01/02 – 05/02

Date Time Currency Detail Forecast Previous
01-02-16 03:00 CNY Manufacturing PMI 49.6 49.7
CNY Non-Manufacturing PMI 54.4
03:45 CNY Caixin Manufacturing PMI 48.1 48.2
04:00 JPY Final Manufacturing PMI 52.4 52.4
10:30 CHF Manufacturing PMI 51.2 52.1
10:55 EUR German Final Manufacturing PMI 52.1 52.1
11:00 EUR Final Manufacturing PMI 52.3 52.3
11:30 GBP Manufacturing PMI 51.8 51.9
GBP Net Lending to Individuals m/m 4.9B 5.3B
GBP M4 Money Supply m/m 0.30% 0.40%
GBP Mortgage Approvals 70K 70K
15:30 USD Core PCE Price Index m/m 0.10% 0.10%
USD Personal Spending m/m 0.10% 0.30%
USD Personal Income m/m 0.20% 0.30%
16:30 CAD RBC Manufacturing PMI 47.5
16:45 USD Final Manufacturing PMI 52.7 52.7
17:00 USD ISM Manufacturing PMI 48.6 48.2
USD Construction Spending m/m 0.60% -0.40%
USD ISM Manufacturing Prices 35.5 33.5
18:00 EUR ECB President Draghi Speaks
20:00 USD FOMC Member Fischer Speaks
02-02-16 05:30 AUD Cash Rate 2.00% 2.00%
AUD RBA Rate Statement
10:15 CHF Retail Sales y/y -1.30% -2.10%
10:55 EUR German Unemployment Change -8K -14K
11:30 GBP Construction PMI 57.5 57.8
12:00 EUR Unemployment Rate 10.50% 10.50%
EUR PPI m/m -0.40% -0.20%
Tentative NZD GDT Price Index -1.40%
17:00 USD IBD/TIPP Economic Optimism 47.8 47.3
20:00 USD FOMC Member George Speaks
23:45 NZD Employment Change q/q 0.80% -0.40%
NZD Unemployment Rate 6.10% 6.00%
NZD Labor Cost Index q/q 0.50% 0.40%
03-02-16 00:30 AUD AIG Services Index 46.3
01:45 NZD RBNZ Gov Wheeler Speaks
02:30 AUD Building Approvals m/m 4.60% -12.70%
AUD Trade Balance -2.45B -2.91B
03:45 CNY Caixin Services PMI 50.5 50.2
07:00 JPY Consumer Confidence 43.8 42.7
10:55 EUR German Final Services PMI 55.4 55.4
11:00 EUR Final Services PMI 53.6 53.6
11:30 GBP Services PMI 55.4 55.5
12:00 EUR Italian Prelim CPI m/m -0.10% 0.00%
EUR Retail Sales m/m 0.40% -0.30%
15:15 USD ADP Non-Farm Employment Change 191K 257K
16:45 USD Final Services PMI 53.7 53.7
17:00 USD ISM Non-Manufacturing PMI 55.2 55.3
17:30 USD Crude Oil Inventories 8.4M
04-02-16 00:30 NZD RBNZ Assist Gov McDermott Speaks
10:00 EUR ECB President Draghi Speaks
11:00 EUR ECB Economic Bulletin
11:10 EUR Retail PMI 49
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
14:45 GBP BOE Gov Carney Speaks
15:30 USD Unemployment Claims 286K 278K
USD Prelim Nonfarm Productivity q/q -1.40% 2.20%
USD Prelim Unit Labor Costs q/q 3.90% 1.80%
17:00 USD Factory Orders m/m -2.00% -0.20%
05-02-16 02:30 AUD RBA Monetary Policy Statement
AUD Retail Sales m/m 0.40% 0.40%
09:00 EUR German Factory Orders m/m -0.40% 1.50%
10:00 CHF Foreign Currency Reserves 560B
15:30 CAD Employment Change 22.8K
CAD Trade Balance -2.0B
CAD Unemployment Rate 7.10%
USD Average Hourly Earnings m/m 0.30% 0.00%
USD Non-Farm Employment Change 192K 292K
USD Trade Balance -42.8B -42.4B
USD Unemployment Rate 5.00% 5.00%
17:00 CAD Ivey PMI 50.3 49.9

Time: GMT+2

Currencies/Events to Watch this Week

AUD: Data from Australia this week includes the RBA interest rate decision. However, not much is expected from the Central Bank as economic data from Australia has been largely modest with no downside risks as of yet. China remains an issue which is likely to be addressed by the RBA. Later in the week, building approvals are estimated to have risen 4.80% for the month while retail sales numbers due on Friday is expected to grow 0.40%.

NZD: The Kiwi will be seeing the quarterly employment numbers this week. Expectations are dovish with the New Zealand unemployment rate expected to rise to 6.10%, up from 6.0% previously while the employment is expected to rise 0.80% after contracting -0.40% in the previous quarter. Any gains in the Kiwi will likely come under pressure as RBNZ Governor Wheeler is expected to speak on Wednesday. With the RBNZ’s recent monetary policy taking a dovish stance, expect further dovish rhetoric from the RBNZ Governor.

JPY: After the BoJ’s decision to cut interest rates into negative territory, the week ahead is mostly quiet as far as economic data from Japan is concerned, and could keep the Yen as the main focus. Equity markets rallied on the BoJ’s action but the big question remains if there will be a follow through this week. Economic data from Japan includes final manufacturing PMI and consumer confidence data.

EUR: Data from the Eurozone this week is busy with manufacturing and services PMI numbers due for release. Most importantly, the markets will be looking to ECB’s Draghi speeches on Monday and Thursday for any clues to March’s policy actions. Besides this, the week ahead is mostly quiet from Eurozone.

GBP: The week ahead is busy for the Pound Sterling. Besides the monthly PMI numbers, the Bank of England is due to meet on Thursday. Expectations call for no change to monetary policy given that BoE officials in recent times took opportunities to remind the markets that interest rates are unlikely to change anytime soon. BoE’s Carney is also expected to speak later during the day.

CAD: Canadian jobs report will be the main focus this week especially after the Bank of Canada left rates unchanged in January. Last week’s GDP numbers released also managed to match expectations which could indicate that the Canadian economy could be looking at some positive data. Canada’s unemployment rate increased to 7.0% – 7.10% and stayed at this level since August last year.

USD: The US dollar looks to a fresh new month. Economic data will be scrutinized closely as it marks a full month after the Fed hiked interest rates. The Core PCE numbers are due out on Monday which is expected to stay flat at 0.10% for the month. ISM manufacturing PMI is due later with estimates showing a soft increase to 48.6 from 48.2 a month ago. Wednesday will see the monthly ADP payrolls report which is expected to show 191k jobs being added while Friday’s nonfarm payrolls are weak, with estimates of 192k jobs. The US unemployment rate is expected to remain steady at 5.0%.

Leave A Reply

Your email address will not be published.