Weekly Forex Preview: March jobs reports!

The US Dollar posted a dramatic turnaround last week erasing the gains from the previous week. Closing the week ending 25th March as the strongest currency, the US dollar was supported mostly by various Fed members’ speaking engagements who came out broadly in support of a rate hike. Economic data from the US was mixed this week as durable goods orders showed a contraction in February. However, the final revised GDP for the fourth quarter of 2015 was yet again, revised higher to 1.40%, from 1.10% revision in the second quarter. Despite a thin holiday trading on Friday, the Dollar managed to bounce higher closing the week with gains.

The British Pound made up the tail end of the scale, losing -2.35%. The declines came on political developments in the UK with Brexit being the core. Last week’s terror attacks in Brussels also saw the GBP being hit hard as uncertainty on the Brexit outcome prevails. Economic data from the UK was disappointing with inflation in February rising at the same pace as in January at 0.30%, below estimates of 0.40%. Retail sales data was also weak but better than a month ago, all adding to the bearish sentiment in the British Pound.

Fundamentals for the Week 28/03 – 01/04

Date	Time	Currency	Event	Forecast	Previous
28-Mar	12:30	USD	Core PCE Price Index m/m	0.20%	0.30%
		USD	Goods Trade Balance	-62.3B	-62.2B
		USD	Personal Spending m/m	0.20%	0.50%
		USD	Personal Income m/m	0.10%	0.50%
	14:00	USD	Pending Home Sales m/m	1.20%	-2.50%
	23:30	JPY	Household Spending y/y	-1.80%	-3.10%
		JPY	Unemployment Rate	3.20%	3.20%
	23:50	JPY	Retail Sales y/y	1.60%	-0.20%
29-Mar	15:30	USD	Fed Chair Yellen Speaks
	23:50	JPY	Prelim Industrial Production m/m	-5.80%	3.70%
30-Mar	All Day	EUR	German Prelim CPI m/m	0.60%	0.40%
	12:15	USD	ADP Non-Farm Employment Change	194K	214K
31-Mar	00:00	AUD	HIA New Home Sales m/m		3.10%
	00:30	AUD	Private Sector Credit m/m	0.50%	0.50%
	05:00	JPY	Housing Starts y/y	-2.20%	0.20%
	06:00	EUR	German Retail Sales m/m	0.30%	0.70%
		GBP	BOE Gov Carney Speaks
	07:55	EUR	German Unemployment Change	-5K	-10K
	08:30	GBP	Current Account	-21.8B	-17.5B
		GBP	Final GDP q/q	0.50%	0.50%
	09:00	EUR	CPI Flash Estimate y/y	-0.10%	-0.20%
		EUR	Core CPI Flash Estimate y/y	0.90%	0.80%
	12:30	CAD	GDP m/m	0.30%	0.20%
		USD	Unemployment Claims	269K	265K
	21:00	USD	FOMC Member Dudley Speaks
	23:50	JPY	Tankan Manufacturing Index	8	12
		JPY	Tankan Non-Manufacturing Index	23	25
01-Apr	01:00	CNY	Manufacturing PMI	49.3	49
	01:45	CNY	Caixin Manufacturing PMI	48.3	48
	02:00	JPY	Final Manufacturing PMI	49.1	49.1
	07:15	CHF	Retail Sales y/y	0.50%	0.20%
	07:30	CHF	Manufacturing PMI	51.3	51.6
	08:00	EUR	Final Manufacturing PMI	51.4	51.4
	08:30	GBP	Manufacturing PMI	51.3	50.8
	09:00	EUR	Unemployment Rate	10.30%	10.30%
	12:30	USD	Average Hourly Earnings m/m	0.30%	-0.10%
		USD	Non-Farm Employment Change	208K	242K
		USD	Unemployment Rate	4.90%	4.90%
	13:45	USD	Final Manufacturing PMI	51.5	51.4
	14:00	USD	ISM Manufacturing PMI	50.8	49.5
		USD	Revised UoM Consumer Sentiment	90.6	90
		USD	Construction Spending m/m	0.20%	1.50%
		USD	ISM Manufacturing Prices	44.5	38.5
	17:00	USD	FOMC Member Mester Speaks

Time: GMT

Currencies/Events to Watch this Week

CNY: China will be back in focus as the world’s second largest economic releases its monthly manufacturing and non-manufacturing data where manufacturing is expected to pick up pace, rising to 49.3 in March, up from February’s 49.0 while non-manufacturing is expected post a modest increase, rising to 48.3 in March from 48.0 in February.

NZD: It will be a slow week for the Australian dollar with economic data limited to private sector credit which is slated to remain unchanged at 0.50%, rising as the same pace as in January.

JPY: Economic data continues from Japan with the week seeing the release of the unemployment rate which is expected to stay put at 3.20% for the second month in a row. Retail sales will be key in judging consumer inflation with the expectation of an increase of 0.40% in February, up from -0.10% in January on a year over year basis. Industrial production numbers are expected to show a contraction falling -5.0% for the month in February and -2.0% on a year over year basis. Friday will see Japan’s Tankan manufacturing and non-manufacturing index, both of which are expected to show a slowdown.

EUR: The Eurozone will be the manufacturing PMI data with expectations of an unchanged print of 51.4 from February. CPI estimates are also due this week with the headline consumer inflation expected to fall -0.10% from 0.20% increase previously, while the Core inflation is expected to rise 0.90% from 0.80% previously. Regional manufacturing PMI numbers are also due including inflation data.

CAD: It is likely to be a slow week for the CAD with data from Canada for the week ahead is limited to the GDP numbers due on Thursday followed by the Producers price index ahead on Tuesday.

USD: The calendar is busy for the US Dollar during the week. Fed officials continue with their speaking engagements with this week’s line up seeing Evans, Mester, Williams and Kaplan in focus. US pending home sales and PCE data is expected to show a mixed print with the PCE core expected to rise 1.70% on a year over year basis, unchanged from last month while the headline PCE index is expected to rise at a slower pace of 1.0%. Pending home sales are expected to rise 1.40% after falling to -2.50% a month ago. The main focus will, of course, be the Friday’s jobs report which is expected to see a hawkish outcome. A number of jobs are expected to rise 200k while the unemployment rate is expected to remain steady at 4.90%. The average hourly earnings are also set to increase 0.20% for the month of March.