Forex Daily Outlook – April 3rd 2009

King of Forex, Non-Farm Payrolls, will dominate the day. Current expectations are for a drop of 659K jobs. Apart from NFP, British, European and American Services PMI figures will be closely watched. Echoes from the G20 summit will also move the markets.

The day starts with  German Import Prices, which are expected to drop by 0.3%. Later in Europe,  Final Services PMI is expected to be left unchanged, at 40.1. This is a major indicator for Europe.

In Britain,  Halifax HPI is expected to fall by 1.9%, after plunging by 2.3% last month. Recent British data suggests that this figure could be better:  Nationwide HPI surprised yesterday, with a rise of 0.9% instead of a fall of 1.5% that was predicted.

Services PMI is another major British release: consensus is for a small rise to 43.6, from 43.2. British financial services aren’t seeing their best days…

At 12:30 GMT, the king of forex, Non-Farm Payrolls will be published in the US. Traders are expecting a drop of 659L jobs, but this week’s figures suggest an even worse result. Unemployment Claims and ADP Non-Farm Employment Change (though not-so-accurate) might lead to NFP under -700K.

At the same time, American  Unemployment Rate is expected to rise to 8.5%. Predictions for this important indicator missed time after time. A figure closer to 9% won’t be a big surprise.

The day isn’t over yet:  ISM Non-Manufacturing PMI is expected to stay almost unchanged, similar to expectations in Europe. A rise to 41.9, from 41.6 is predicted at the moment.

Also in the US:  Average Hourly Earnings is expected to rise by 0.2%, like last month. Speeches from FOMC members  Jeffrey Lacker and  Donald Kohn are expected, and they could also move the markets.

Near the end of the day,  Federal Reserve Chairman Ben Bernanke will speak about an interesting issue:  The Fed’s Balance Sheet. The last FOMC Statement increased the Federal Reserve’s balance sheet significantly. Printing $1 trillion dollars doesn’t happen every day, and Ben Bernanke will finally dedicate a full speech to this extreme move.

Happy Forex Trading!