Weekly Review for 09-13.05.2016
Market expectations regarding new jobs in the USA outside agricultural sector (Non-Farm PayRolls) proved to be wrong.
The number of new jobs in April was +160 000 against the forecast of 200 000 and the rise of 208 000 in March. Unemployment rate in the USA remained at the previous level of 5.0%. Following the release of the US Non-Farm PayRolls last Friday, the USD sharply fell against the major currencies in the Forex market. However, later on this day, the situations had changed and the USD was in the positive zone by the end of the trades.
It seems that the USD was supported by the data on the rise in hourly wages in the US private sector by 2.5% in April compared with the same period a year ago. Market participants probably decided that the moderate rise in wages and the rise in new jobs will enable the US fed to continue monetary policy tightening in the country.
The rise in the AUD last week was triggered by the decisions of the Reserve Bank of Australia to lower interest rate in the country for the first time since June 2015.
Important data scheduled for the release this week is as follows:
01:00 (GMT+2) –Retail sales report by the British Retail Consortium (BRC), which demonstrates situation in the British retail trade sector. The rise in the index will cause the rise in the Pound.
03:30 – Consumer price index (CPI), which is the key inflation index. Producer price index of China (PPI) - this index evaluates the pace of inflation growth. Positive index will be favourable for the CNY.
07:45 – Unemployment rate in Switzerland in April. Unemployment in the country has maintained at the level of 3.2-3.5% since July 2013. The decline in this index is favourable for the CHF.
08:00 – German statistics, including industrial production index and trade balance for March.
22:00 – Financial report of RBNZ evaluating the state and efficiency of the financial system of the country.
22:30 – American Petroleum Institute (API) will issue report on changes to the oil inventories in the USA for the last week.
07:00 (GMT+2) – Preliminary economic leading/coincident indicators in Japan for March. The decline in the indices will indicate the decline in economic activity in the country.
10:30 – British industrial production index. High level of this index will be a positive factor for the GBP. 16:00 – Assessment of GDP growth by NIESR. This indicator evaluates growth rate of the British economy in the past three months and is released prior to the official publication of GDP.
16:30 – US Department of Energy will issue weekly report on oil reserves in the USA.
00:30 (GMT+2) – business activity index in New Zealand’s manufacturing sector (PMI) evaluating condition in business environment. This index is an important indicator of general economic state in the country.
00:45 – Price index of food (FPI) in April. New Zealand depends on exports of agricultural and food products; therefore, the rise in this index will have a positive impact on the AUD. 03:00 – Inflation expectations in Australia in May.
08:00 – German wholesale price index for April.
11:00 – Industrial production in Eurozone in March.
13:00 – The main event on Thursday and the key event of this week is the interest rate decisions by the Bank of England. Changes are not expected. The minutes of the meeting will show MPC’s plans for the future monetary policy and interest rate. Currently interest rate in the UK is at the level of 0.5%. Minutes of the meeting may change movement direction in the Pound in the medium-term.
14:30 – US price index of export and imports for April.
05:30 (GMT+2) – a speech of the Bank of Japan’s president Mr. Kuroda. Japanese Finance Minister Mr. Taro Aso has stated on Monday that the Bank f Japan is ready to carry out intervention in the currency market in case of the sharp rise in the Yen. Market participants will pay a lot of attention to Mr. Kuroda’s speech.
08:00 – German macro-economic statistics, including GDP in Q1.
11:00 – Preliminary European GDP for Q1. It is expected that GDP in Eurozone will grow: (+0.6% and +1.6 on annual basis). It the forecast proves to be correct, Euro will go up.
14:30 – Volume of retail sales in the USA for April. This index is the main indicator of consumer spending. In case of the positive data the USD will grow and vice versa.