High Impact Economic Data for the upcoming week (All Times GMT+2)
Week Ahead - February 1-6
This week features a raft of key economic indicators across the EUR, USD, GBP, CNY, NZD and CAD. In addition to the economic data scheduled to be released throughout the global economy there are several ongoing situations in the works that may impact financial markets in the week ahead. The top three risks come from the Greek debt negotiations, the Ukrainian 'Civil War' and the volatility and weakness in the oil markets. In addition the conflict of ISIS in the Middle East, the potential exacerbation of tensions between Israel and Lebanon and further progress and inroads of 'anti-euro'' political parties within Europe are worth keeping an eye on.
Data out on Sunday revealed that the Chinese Manufacturing PMI has slipped below 50 to 49.8 for the first time in 27 months as data missed expectations of a print at 50.3. On Monday an alternative Manufacturing PMI Survey by HSBC is forecast to confirm the 49.8 reading of the above data in China. Also on Monday the Spanish Unemployment Change is forecast to show a further decline in the persons Unemployed in the economy. GBP Manufacturing PMI is expected to increase from 52.5 to 52.9 while USD ISM Manufacturing PMI looks set to decline from 55.5 to 54.9. On Tuesday top of the agenda is the AUD Cash Rate and RBA Rate Statement followed by the Employment Change and the Unemployment Rate out of New Zealand. The Cash Rate in Australia is set to remain unchanged at 2.5% although the RBA Rate Statement could provide hints to future interest rate policy while in New Zealand the Unemployment Rate is forecast to improve from 5.4% to 5.3%. On Wednesday the GBP Services PMI is expected to advance from 55.8 to 56.6 in a further sign that the UK economy is continuing to improve. US ADP Non-Farm Unemployment Change will be eagerly watched in the run up to the official government data on Friday and the ADP is set to show 221 000 jobs added to the US economy for January 2015. Also on Wednesday in the US ISM Non- Manufacturing PMI data is expected to advance to 56.6 from 56.2 last month. On Thursday we look forward to the Bank of England Meeting and the Official GBP Bank Rate which will be followed up with the MPC Rate Statement. At 13:30 GMT the USD and CAD Trade Balance are expected by markets with the CAD Trade deficit set to deteriorate with an increase from -0.6B to -1.0B while the US Trade Deficit is expected to shrink from -39.0B to -38.0B. Following an improvement in the US Unemployment Claims last week this week's figures are expected to be well within the 300k level. On Friday the highlight of the week arrives with the USD Non-Farm Payrolls data as well as the Unemployment Rate. The NFP is expected to show that the economy created 231k jobs last month, down from the 251k for the previous month while the Unemployment Rate is set to stay at 5.6%. In Canada the Employment Change data forecast is for 5.1k new jobs created and a deterioration in the Unemployment Rate to 6.7% from 6.6%. The US NFP is likely to generate above average volatility and price movements across related financial assets.
Crude Oil 30 Minute Chart
EURUSD 1 Hour Chart
Key Economic Events to Watch this Week
The main factors that will affect the fx markets and trends next week will be the:
- EURUSD bounced back last week from a new low of 1.1097 to close the week at 1.1282 after having risen to as high as 1.1423. The price of the pair has begun the week in an encouraging fashion climbing to 1.1330 and as of yet holding above last week's close price @ 1.1282. The Euro being the world's second reserve currency is under the spotlight after declining to a 12 year low. The global economy will benefit from a strong European economy while a stagnating Europe will weigh on global growth. Look out for developments in Greece's debt renegotiation efforts.
- Crude Oil made new lows last week falling to $43.57 a barrel after breaking below the previous low of $44.21. We have seen Oil rise back up sharply to climb above $48 a barrel and the strength of the bounce may indicate some further upside potential. On the other hand with Crude Oil declining so aggressively and losing as much as 60% of its price value in the preceding seven months it could be a case of trying to catch falling knives at this stage. Demand for Crude and the price are considered a barometer of the health of the global economy by many economists and investors and therefore we will be keeping a close eye on developments in energy markets.