FX Week Ahead: US Jobs Report, Eurozone Inflation Estimates

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The week ahead of 27/08 – 02/09 will see investors focus on the US PC data and Friday’s payrolls report for August. With Yellen signaling rate hikes, the data this week could potentially seal the deal for a September rate hike.

The British pound managed to stay on the top this week gaining 0.61% against the US dollar. The gains came as economic data released over the past weeks showed smaller than expected Brexit effects on the UK’s economy. The second quarter GDP was confirmed at 0.60% while latest data such as retail sales and unemployment continued to post modest gains from a month ago. The US dollar managed to make up for the lost ground on Friday, largely thanks to Janet Yellen’s hawkish remarks at Jackson Hole on rate hikes sending the dollar higher.

Weekly Spot FX Performance – 26/08/2016
Weekly Spot FX Performance – 26/08/2016

The Swiss franc lost over 1.70% for the week followed by gold prices which were hit the most. The yen was also down over 1.0% by last week’s close as the safe haven instruments gave up some of their gains. The euro which was trading stronger over the week also fell sharply on Friday closing the week with over 1.0% in losses.

Economic Calendar for the Week 28/08 – 02/09

Date Time Currency Detail Forecast Previous
29-Aug 02:00 AUD HIA New Home Sales m/m 8.20%
13:30 USD Core PCE Price Index m/m 0.10% 0.10%
USD Personal Spending m/m 0.30% 0.40%
USD Personal Income m/m 0.40% 0.20%
23:45 NZD Building Consents m/m 16.30%
30-Aug 00:30 JPY Household Spending y/y -1.30% -2.20%
JPY Unemployment Rate 3.10% 3.10%
00:50 JPY Retail Sales y/y -0.90% -1.30%
02:30 AUD Building Approvals m/m 1.20% -2.90%
07:00 EUR German Import Prices m/m 0.00% 0.50%
All Day EUR German Prelim CPI m/m 0.10% 0.30%
08:00 CHF KOF Economic Barometer 103.1 102.7
EUR Spanish Flash CPI y/y -0.50% -0.60%
09:30 GBP Net Lending to Individuals m/m 4.9B 5.2B
GBP M4 Money Supply m/m 1.20% 1.10%
GBP Mortgage Approvals 63K 65K
14:00 USD S&P/CS Composite-20 HPI y/y 5.10% 5.20%
15:00 USD CB Consumer Confidence 97.2 97.3
31-Aug 00:05 GBP GfK Consumer Confidence -8 -12
00:50 JPY Prelim Industrial Production m/m 0.70% 2.30%
NZD ANZ Business Confidence 16
02:30 AUD Private Sector Credit m/m 0.40% 0.20%
06:00 JPY Housing Starts y/y 7.60% -2.50%
EUR German Retail Sales m/m 0.50% -0.10%
07:45 EUR French Consumer Spending m/m 0.30% -0.80%
EUR French Prelim CPI m/m 0.40% -0.40%
08:55 EUR German Unemployment Change -2K -7K
10:00 EUR CPI Flash Estimate y/y 0.30% 0.20%
EUR Core CPI Flash Estimate y/y 0.90% 0.90%
EUR Italian Prelim CPI m/m 0.10% 0.20%
EUR Unemployment Rate 10.00% 10.10%
13:15 USD ADP Non-Farm Employment Change 173K 179K
13:30 CAD GDP m/m 0.50% -0.60%
14:45 USD Chicago PMI 54.1 55.8
15:00 USD Pending Home Sales m/m 0.70% 0.20%
23:45 NZD Overseas Trade Index q/q -1.40% 4.40%
01-Sep 00:50 JPY Capital Spending q/y 5.60% 4.20%
02:00 CNY Manufacturing PMI 49.9 49.9
CNY Non-Manufacturing PMI 53.9
02:30 AUD Private Capital Expenditure q/q -4.00% -5.20%
AUD Retail Sales m/m 0.30% 0.10%
02:45 CNY Caixin Manufacturing PMI 50.1 50.6
03:00 JPY Final Manufacturing PMI 49.6 49.6
08:15 CHF Retail Sales y/y -3.10% -3.90%
EUR Spanish Manufacturing PMI 50.8 51
08:30 CHF Manufacturing PMI 50.5 50.1
08:45 EUR Italian Manufacturing PMI 51.3 51.2
08:50 EUR French Final Manufacturing PMI 48.5 48.5
08:55 EUR German Final Manufacturing PMI 53.6 53.6
09:00 EUR Final Manufacturing PMI 51.8 51.8
09:30 GBP Manufacturing PMI 49.1 48.2
13:30 USD Unemployment Claims 265K 261K
USD Revised Nonfarm Productivity q/q -0.60% -0.50%
USD Revised Unit Labor Costs q/q 2.00% 2.00%
14:30 CAD RBC Manufacturing PMI 51.9
14:45 USD Final Manufacturing PMI 52.1 52.1
15:00 USD ISM Manufacturing PMI 52 52.6
USD Construction Spending m/m 0.60% -0.60%
USD ISM Manufacturing Prices 54.5 55
All Day USD Total Vehicle Sales 17.2M 17.9M
02-Sep 00:50 JPY Monetary Base y/y 23.10% 24.70%
06:00 JPY Consumer Confidence 41.6 41.3
09:30 GBP Construction PMI 46.6 45.9
10:00 EUR PPI m/m 0.10% 0.70%
13:30 CAD Trade Balance -3.2B -3.6B
CAD Labor Productivity q/q 0.20% 0.40%
USD Average Hourly Earnings m/m 0.20% 0.30%
USD Non-Farm Employment Change 186K 255K
USD Unemployment Rate 4.80% 4.90%
USD Trade Balance -43.0B -44.5B
15:00 USD Factory Orders m/m 2.10% -1.50%

Time: GMT+1

Currencies/Events to Watch this Week

AUD: The week ahead from Australia will see the building approvals due on Tuesday. Forecasts point to a 1.20% increase in July following a 2.90% slump in the previous month. While the mid-week is quiet, on Thursday, Australia’s retail sales numbers are expected show consumer spending pushing retails up 0.30% on the month, which would see retail sales rise to a 3-month high.

JPY: Economic data from Japan is limited to Tier-2 economic releases. However, on Tuesday, the monthly unemployment numbers are expected to show a 3.10% unemployment rate for Japan. Retail sales are expected to fall 0.90% albeit at a slower pace than the previous month’s 1.30% declines. The final manufacturing PMI is due in September and is expected to confirm flash manufacturing estimates of 49.6.

EUR: From the eurozone, the week ahead will see more regional data coming out. German import prices and preliminary flash CPI estimates are due on Tuesday. Flash inflation estimates are also expected for the eurozone. Forecast points to the headline CPI rising 0.30% on the year, slightly higher than the July’s inflation of 0.20%. Core CPI is expected to remain unchanged. On Thursday and Friday Markit’s PMI numbers will be coming out. This week marks the final eurozone data ahead of the ECB’s meeting on September 8th.

GBP: The UK markets are closed on Monday, and the main economic events are due only Thursday and Friday which will see the manufacturing and construction PMI numbers. Estimates point to a pullback in both these sectors as forecasts show the manufacturing PMI likely to rise 49.1 while construction PMI is expected to rise to 46.6 following July’s 48.2 and 45.9 respectively.

USD: The US dollar looks to another busy week with Monday seeing the core PCE data. Forecasts show an unchanged print of 0.10% increase in Core PCE while personal incomes are expected to rise 0.40%. The monthly private payroll figures are due on Wednesday with estimates showing the US economy added 173k jobs in the private sector. The report is followed by a busy Thursday and Friday which will see the ISM manufacturing PMI and nonfarm payrolls which are expected to show a modest increase of 186k jobs in August, down from 255k in July. The US unemployment rate is expected to fall to 4.80%.

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