WEEKLY MARKET SNAPSHOT 04/12-08/12|Australia and Canada’s interest rate decisions and NFP jobs data are the key economic calendar events over the coming week
Australia’s central bank will reveal its latest interest rate decision on Tuesday, with opinion finely balanced with regards to a rise or reduction, this economic calendar release will be closely monitored, as will be any accompanying, forward guidance explanation from the RBA, regarding their monetary policy. The Aussie dollar has sold off sharply versus the USD since mid-September, and versus its peers during a similar period. As to what harm a weak dollar is causing the Aussie economy is a subject for debate which should be covered by the RBA’s reports, who presumably will have prior sight of the latest Australian GDP figures, which are also released this coming week.
Canada’s central bank will also deliver its latest decision on its key interest rate, similar to the Aussie, the loonie currency (a slang term for the Canadian dollar), has sold off sharply versus its main peers since September, as a commodity currency, the selloff can’t exclusively be linked to the rise in the value of commodities over recent months.
The latest USA monthly NFP figure will be published on Friday, revealing the latest job creation figures for November. The September and October figures were affected by the severe hurricane season in the USA, as to why a low figure for November is forecast by Reuters is curious, a figure of 198k, versus the 261k recorded for October, appears to be pessimistic, particularly in a month when service and retail business should be gearing up for Xmas seasonal activity.
Monday starts the week’s economic calendar news with the monthly dairy auction results from New Zealand, as always this data can move the value of the kiwi dollar, given the reliance the country has on exports, to Asia in particular. The latest Japanese consumer confidence reading will be released in the Asian trading session, prior to this the latest monetary base figures for Japan will have been published.
As attention turns to Europe, the latest U.K. construction PMI will be delivered, coming in at 50.8 for October, that’s only marginally above the 50 level separating growth from contraction. However, the figure doesn’t necessarily reflect a seasonal slowdown in activity, moreover it provides a sentiment reading of how purchasing managers expect the construction industry to develop, over the short to medium term. The Eurozone producer price figures will be published, this key metric can often illustrate any movement in the next round of CPI/RPI (inflation) figures.
From the USA we receive the latest factory and durable orders data; with the last FOMC meeting scheduled for the second week in December, now beginning to concentrate investors and FX traders’ collective minds, in relation to a potential interest rate rise announcement, any positive data that can possibly support a rate rise, will be optimistically seized on by speculators.
On Tuesday we begin the day with the latest Japanese services and composite PMIs, whilst Australian data on: account balance, exports and retail sales is also published in the Asian trading session. China’s Caixan PMIs are released, China’s economy has been back in the news lately, as their domestic equity markets experienced a moderate sell off, due to a government lending clampdown, therefore continual growth will be looked for. Australia’s central bank the RBA will announce its decision on the interest rate, currently at 1.5% the expectation is for no change, with any accompanying press release and monetary policy statement ranking highly. A raft of PMIs for: Italy, France, Germany and the wider Eurozone are published on Tuesday, whilst the services and composite reading for the U.K. is also published. Eurozone: retail sales, government expenditure, household consumption and the latest GDP growth figures are also delivered.
Shortly after USA markets open, the latest trade balance figures for the U.S. economy will be revealed, PMIs for services and the composite will also be published, the ISM non-manufacturing composite will be delivered, a closely observed metric to deduce the overall performance of the USA economy.
On Wednesday focus immediately returns to the Australian economy, coming shortly after the interest rate decision earlier in the week, we receive the latest GDP growth figure, currently at 1.8% growth YoY the forecast is for this figure to be maintained. Prior to European markets opening Germany’s latest factory orders data is published, the October 9.5% YoY growth figure may have slipped back in November. Germany’s construction and retail PMIs are also published, as are the retail PMIs for Italy and France. The day’s significant impact events ends with Canada’s central bank revealing their latest decision on interest rates, the expectation is for the rate to remain unchanged at 1%.
Thursday witnesses the latest Swiss unemployment figures published, although a consistently low figure of circa 3%, the continual strength and stability of the Swiss economy helps maintain the Swiss franc’s appeal as a safe haven. German industrial growth data will be published, coming in at 3.6% YoY for October, the November figure is forecast to be similar. Halifax house price data is always closely observed in the U.K., due to the economy being heavily reliant on house price growth and the modest trickle-down effect, which rising house prices can generate.
From the USA the monthly challenger job cuts and the weekly jobless claims and continual claims numbers, comes prior to the NFP data published on Friday and as such, this series of jobs related metrics, is closely observed. Consumer credit numbers for the USA is also revealed.
Friday begins with a raft of Chinese data, including exports, imports and the latest trade balance data. The respected Japanese ECO watchers’ surveys are also published, as are the latest earnings data and the latest bankruptcy figures.
As attention turns to the pending European markets’ open, the latest German imports, exports and trade balance figures are released. A raft of data concerning the U.K. economy is published on Friday morning; industrial, manufacturing and construction output and production figures are released. The low production of the U.K. is a topical subject lately, therefore these latest figures will be seized on, for any signs of deterioration, or improvement. The U.K. ONS also releases the latest trade balance data, whilst generally in deficit the figures will be closely observed for any indication that the low pound has improved U.K. export figures. An estimate for U.K. inflation over the next twelve months will also be delivered, expected to come unchanged at circa 2.8%.
As attention shifts to North America Canada’s latest figures on housing starts and capacity utilization are published, before the BLS delivers the latest NFP data for the USA economy. The forecast is for a modest growth figure of 198k, significantly below the 261k figure registered in October. The overall unemployment rate for the USA is forecast to remain close to the multi decade low of 4.1%. Average USA earnings for November are forecast to rise by 0.3% in November, from the zero growth registered in October. The latest university of Michigan sentiment survey closes off the high impact news releases for the week, the November 98.5 reading is forecast to come in similar for December.