A busy week for fundamental news for forex trading which started overnight with the release in China of manufacturing PMI data which came in slightly worse than expected at 51.2 against a forecast of 51.5, indicating a possible slowdown in China’s manufacturing complex which could jolt the forex markets as the trading session gets under way.
Moving to the European markets the first important news came from Switzerland with retail sales dropping sharply to report a figure of 0.9% against a forecast of 4.1% which has promptly translated into a modicum of bearish sentiment for the Swiss Franc against both the US dollar and Euro.
This has been followed by further manufacturing data but this time in the UK which reported a PMI figure of 57.3 against a forecast of 57.1 and a previous of 57.6. With a Bank Holiday in Canada the next item of news comes in for the US markets with a further manufacturing PMI figure which is forecast for the US at 54.2, down from last time’s 56.2 which if correct would once again the bearish economic picture in the US economy at present. This is followed later in the US session with a speech from Fed Chairman Bernanke entitled “Challenges for the Economy and State Government”. The forex trading session rounds off for Monday with data for the New Zealand job market and the labour cost market which is forecast to show a small rise from 0.3% to 0.4%.
Tuesday starts in the Far East session with a raft of important news for Australia and five items in particular starting with ANZ job advertisements, followed by building approvals which are expected to show strong growth, up from last month’s -6.6% to +2.1% this time. This is followed by retail sales which again are expected to be goods for the economy, up from 0.2% last time to 0.4% this time. Finally later in the Asian forex trading session we have an interest rate decision from the RBA with interest rates expected to remain on hold at 4.5% following last month’s small quarter point rise. If all the above figures come in on target (or better) then expect the recent bullish trend in the aud usd to continue.
Tuesday’s London forex trading session opens with the month and month HPI figures, forecast at -0.4%, marginally better than last month’s minus -0.6%. The only other major item of news for Tuesday are the pending home sales figures in the US which are forecast to reverse last month’s awful -30% to a positive 0.9%.
Wednesday’s forex trading session again starts in the Far East with the trade balance figures for Australia, forecast at 1.81bn against a previous of 1.65bn. Later in the morning the UK market waits for the services PMI data which is expected to show a small rise from 54.4 to 54.6 this time around.
With a new month now in progress the focus for the markets on Friday will be the non farm payroll data with Wednesday afternoon’s ADP figures generally providing a good guide to Friday’s figure. The forecast for the ADP is 36k, up from last month’s 13k which if replicated in the nfp data could provide a boost for the US dollar as a result. Later on Wednesday afternoon we have the ISM non manufacturing PMI data which is expected to show a small decline from 53.8 to 53.3. The forex trading day rounds off in New Zealand with further employment data with a forecast of the change in the employment figures falling from 1% last time to 0.5%, with a consequent rise in the headline rate from 6% to 6.2%.
Thursday sees very little news overnight with the forex markets concentrating on the UK and Europe where both will be releasing interest rate announcements. In the UK the rate is expected to stay at 0.5% while in Europe interest rates too are expected to remain the same, ie 1% – so little change. As always the forex markets will watch the associated statements for any clues to central bank thinking for future policy on this topic. The only other item of news for Thursday is the unemployment claims in the US which are expected to remain more or less flat at 456k.
Friday’s forex trading session starts in Asia with an RBA monetary policy statement which again will highlight the aud usd and associated aussie pairs, making it a volatile and potentially productive week in this market. Attention then shifts to Europe and the UK with the release of the manufacturing production month on month figures which are expected to show a small increase from 0.3% to 0.5% and for a change in PPI input from -0.2% to -0.4%. All eyes will then turn to the US and Canada with non farm payroll preceded by the Canadian employment change numbers which are expected to show a steep fall from last month’s 93.2k down to 10.3k with the headline rate remaining at 7.9%. The non farm payroll figures in the US are forecast to show an improvement from last month’s -125k down to -75k but also to show an increase in the unemployment rate from 9.5% to 9.6%.
The forex trading week rounds off with the IVEY PMI data in Canada which again is forecast to show a decline from 58.9 last time to 56.3. It is interesting to note throughout the week there is no significant fundamental news in Europe which suggests a week of sideways consolidation, narrow price action with thin volumes as Europe closes for its annual holidays.
