High Impact Economic Data for the upcoming week (All Times GMT+3)
This week will feature a high volume of significant economic data across major fx pairs. The main currencies in focus for the releases are the EUR, USD, GBP, JPY, CAD and AUD, NZD and CNY. On Sunday the Swiss SNB Asset Vote outcome will be determined and released by media whilst the Royal Bank of New Zealand Governor Wheeler also speaks at an Inflation Conference. The Swiss Vote will have an effect on Gold at the re-opening at the start of the new week. On Monday Manufacturing PMI data will be released in China, the UK and the US. The first to be released is in Asia with China, moving to the UK in Europe and then to the USA. China is expected to post a reading of 50.0, UK 53.1 and US 57.9. Stronger readings would tend to support the currency involved while weaker readings are not supportive of that currency. On Tuesday the main highlights are the AUD Cash Rate which is expected to remain unchanged, followed by the RBA Rate Statement and then the UK Construction PMI and a speech by Fed Chair Yellen at the College Fed Challenge National Finals in Washington DC. Big data again the next day in Australia with GDP Growth expected to expand to 0.7% growth q/q. Over in Europe in the morning Services PMI is expected to advance to 56.6 following by the US ADP Non-Farm Employment Change. The ADP is very important to track ahead of the official government NFP data coming up on Friday and the ADP survey is forecasting 223,000 jobs added in November for the US economy. Still to come on Wednesday are the CAD Overnight Rate and BOC Rate Statement followed by the US ISM Non-Manufacturing PMI. More big data arrives on Thursday in the shape of Interest Rate decisions in the UK and EU and the big highlight on this trading day is the ECB Press Conference. The ECB Press Conference generally leads to high volume and volatility, last month the EURUSD declined 170 pips during and after the event. Thursday also features Retail Sales and the Trade Balance on the Aussie currency as well as the Unemployment Claims for the US which has been deteriorating over recent weeks. Finally on Friday the highlight of each month's economic calendar is the USD Non-Farm Payrolls and Unemployment Rate. Markets are forecasting 225,000 jobs added to the US economy and for the Unemployment Rate to hold steady at 5.8%. A release above 22k will support the USD as well as a reduction in the Unemployment Rate will be healthy for the USD. Also on Friday the US Trade Balance data and the CAD Employment Change, Unemployment Rate and Trade Balance figures will be released for market consumption.
Events to Watch this Week
WTI Crude Oil has extended declines in the week past breaking below the key $70 level before reaching as low as $67.73. The price had been as high as $77.01 last week and the previous low on WTI has been $73.18 before a massive sell-off occurred due to the indecisiveness of Opec to cut production of oil. If Crude Oil weakens this will have a variety of effects across asset classes such as stocks and bonds but in fx markets it would be expected to strengthen inflows into the US Dollar and weigh on the CAD and AUD in particular.
The main factors that will affect the fx markets and trends next week will be the:
- ADP Employment data in the US on Wednesday
- The Interest Rate Decisions in the UK and Europe and particularly the Press Conference by Mario Draghi of the ECB on Thursday
- The US NFP Payrolls data and the Unemployment Rate on Friday
These releases will be instrumental to the fx price action and direction during this week and they supersede all other factors, barring any unexpected events such as breakout of wars, natural disasters etc