WEEKLY MARKET SNAPSHOT 30/10-03/11|Key interest rate decisions from the BoE and FOMC, combined with NFP jobs data, provide the highlights of a major economic calendar news week

Oct 27 • Is The Trend Still Your Friend • 234 Views • No Comments

The upcoming week is an extremely busy week for high impact news releases, what’s often referred to as “hard data”. The outstanding events are the interest rate decisions from the U.K. and USA and the traditional NFP monthly jobs report for the USA, published on the first Friday of each month. German CPI data is also revealed, various Bank of Japan policy reports, E.Z. and Canadian GDP, USA consumer confidence, N.Z. and German unemployment, and various PMI and ISM readings.

The U.K. central bank is forecast to announce a rise in the base rate, for the first time in approximately ten years, when it meets on Thursday; from 0.24% to 0.5%. Whereas the forecast for the FOMC, once the “heads of the Feds” concludes a meeting on Wednesday, is mixed; many analysts are now predicting no change, from the 1.25% current Fed key interest rate. FX traders need to be vigilant as both data releases will likely impact the value of sterling and the U.S. dollar, irrespective of the actual interest rate decisions.

The first Friday of the month is the traditional NFP jobs report, with a collapse to -33k reported for September, entirely impacted by hurricane season in the USA, a bounce back to 330k jobs created in October is forecast. However, a slower jobs recovery could indicate other wider economic issues in the USA economy.

On Sunday evening Japan’s retail figures begin the week’s delivery of economic calendar news, the expectation is for a MoM improvement on the -1.7% figure printed in August. Sight deposits detail from the Swiss banking authorities is traditionally published each Monday to start the weekly European data, information that can often move the value of the Swissie, if the deposits level alters dramatically week on week. U.K. consumer data on credit and more specifically credit secured on dwellings are revealed, which could be significant given that consumer spending in the country, has apparently slipped recently. In the Eurozone various confidence readings will be delivered, later in the afternoon German CPI will be revealed, forecast to remain unchanged at 1.8%. Late evening Japan publishes its jobless rate, currently at 2.8%, industrial production rate and household spending figures are also revealed.

Tuesday continues as Monday ends, with Japanese high impact data; a BOJ outlook policy report will be delivered, as will be the central bank’s policy balance rate. New Zealand’s business confidence and home sales data from Australia are published in quick succession, two confidence readings are released concerning the U.K. economy; the GfK consumer confidence reading and the Lloyds business barometer. Later in the morning, the BOJ’s Kuroda will hold a press conference discussing the monetary policy detail published earlier. China’s manufacturing and non-manufacturing PMIs are published early morning, as is Japan’s: vehicle production data, housing starts, construction orders and small business confidence. Both France’s and the wider Eurozone latest monthly and annualised GDP figures will be revealed, France is expected to maintain a 2.1% Q3 growth figure YoY, whilst the Eurozone is expected to print a 2.3% Q3 YoY rise. The Eurozone CPI is forecast to remain unchanged, from its current rate of 1.5% annualised. Canada’s GDP is forecast to remain at (or close to), the current 3.8% YoY growth level. The Case Shiller house price data for the USA is published on Tuesday, the current twenty major city price change of 5.8% YoY, is forecast to be maintained. Consumer confidence in the USA for October is forecast to rise moderately, to 120 from 119.8. A raft of Australasian data closes the day out; New Zealand’s unemployment rate and Australia’s AiG performance of manufacturing, are the stand out publications.

Wednesday starts with the publication of China’s Caixan manufacturing PMI, currently at 51 for September, the reading is only marginally above the 50 line, which separates growth from contraction. Significant European news begins with the U.K. PMI manufacturing figure, currently at 55.9. Manufacturing PMIs are also published for Canada and the USA, as are several ISM readings for the USA. The USA’s FOMC will reveal their latest decision regarding interest rates, currently at 1.25%, many economists appear divided on the possibility of a rise to 1.5%.

Thursday begins with building approvals and trade balance data from Australia, Japan’s consumer confidence reading is also revealed. Swiss retail sales and the latest confidence index reading are also published, thereafter Germany’s latest key unemployment numbers are delivered, and the expectation is for the headline rate to remain unchanged at 5.6%. The latest U.K. construction PMI will be revealed, forecast to come in slightly improved from the contraction figure of 48.1 registered for September. The U.K.’s central bank, the Bank of England, is forecast to raise the base interest rate to 0.5%, from its current 0.25% level. The BoE will also publish its latest inflation report to accompany the interstate rate decision, dampening inflation being the key reason rates might rise, as opposed to any underlying strength in the U.K. economy. The weekly jobless claims and continuous claims numbers from the USA are revealed, during “NFP week”, this data often takes on greater impact.

Friday begins with Australia’s retail sales data, and China’s Caixan PMIs for services and composite, Markit PMIs for the U.K. services and composite are also published as is the U.K. official reserves figure. Any significant divergence, from the $554m recorded in September, could impact on the value of sterling. Canada’s October unemployment rate is forecast to remain constant at 6.2%. The monthly non-farm payroll figure, NFP, is forecast to deliver a significant bounce back from the -33k hurricane and tropical storm impacted September jobs creation figure. The forecast is for jobs growth of circa 330k for October. The unemployment rate, hours worked and wage growth data will also be published, accompanying the key NFP reading. The ISM non-manufacturing reading will be revealed, forecast to fall to 58, from the 59.8 registered in October. The USA monthly trade balance deficit for September, is predicted to deteriorate to -$44.0, from -$42.4.

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