Forex Daily Outlook – November 5 2010
Daily Look

Forex Daily Outlook – November 5 2010

American Non-Farm Payrolls, US Pending Home Sales, Ben Bernanke speech, Canadian employment data and Japan’s BOJ Press Conference are just a part of the many highly important events on our menu today. Here is an outlook on today’s market movers closing another trading week.  

In the US, American Non-Farm Payrolls fell by 95,000 jobs in September while the unemployment rate stayed at 9.6 per cent mainly due to government’s cutbacks in response to declining tax revenue, badly affecting the USD although growth in the Private-sector is encouraging. A rise of 63K is expected now.

More in the US, US Pending Home Sales rose a better-than-expected 4.3% in August due to the extended closing deadline for the home-buyer tax credit to Sept. 30, 2010. It was the second straight month of gains in the index. July contracts were revised down to show a 4.5 percent increase instead of the previously reported 5.2 percent rise. A smaller rise of 3.2% is expected this time.

Later in the US, Ben Bernanke Speaks- Federal Reserve Chairman Ben Bernanke will speak at the University, in Jacksonville and explain the QE2 will buy an additional $600 billion of Treasuries through June to boost American economy. His words will rock the market.

Further events in the US, Average Hourly Earnings the earliest data related to labor inflation released monthly expected to rise by 0.2% after remaining flat in the previous month indicating inflation.

Finally in the US Federal Reserve Bank of Kansas President Thomas Hoenig speaks at the National Association of Realtors meeting, in New Orleans. He will elaborate on the FOMC statement issued on November 3 including the target federal funds rate and the $600 Billion QE2. In addition, Federal Reserve Bank of St Louis President James Bullard participates in a panel discussion titled “From Passage of the 1913 Act until the 1951 Treasury Accord” at the Atlanta Federal Reserve Conference where further information could be revealed on the FOMC statement.  

In Canada, Unemployment Rate edged down to 8.0% in September from 8.1% in the previous month as fewer people joined the job market but Canada’s Employment Report Unexpectedly Dropped 6.6K after climbing 35.8K the month prior. A similar rate of 8.0% is expected in the Unemployment data and a rise of 14.3K is predicted in Employment change.

More in Canada, Building Permits a major gauge of future construction activity released monthly plunged 0.9% in the previous month beating expectations of 1.9% drop. However since Building Permits tend to be highly volatile the overall picture is not so bad though it does show a slowdown in construction in the Canadian housing sector. A 3.4% rise is expected now.

For more on USD/CAD, read the  Canadian dollar forecast.

In Europe, Retail Sales the primary gauge of consumer spending dropped unexpectedly by 0.4% in August when 0.2% drop was predicted. The drop in August sales in Eurozone was mainly due to decrease in sales of food items indicating Consumer  remains weak however a 0.3% rise is expected now.

More in Europe, German Factory Orders a leading indicator of production goes in line with the Bundesbank’s growth forecast climbing more than expected by 3.4% in August. A smaller rise of 0.5% is expected now.

In Great Britain, Producer Price Index Input a leading indicator of consumer inflation grew by 0.7% when only 0.3% increase was predicted a higher climb to 0.9% is forecasted indicating inflation in the British market.

Read more about the Pound in the  GBP/USD forecast.

In Australia, Australian RBA Monetary Policy Statement- The previous quarterly the RBA said that the Australian economy continues to exhibit considerable resilience in the face of a very difficult international environment. Consistent with this, they upgraded their forecasts for Australian GDP growth to ½ a per cent in 2009″‘10 and 2 ½ per cent in 2010″‘11. However the pace of recovery is still expected to be modest.

For more on the Aussie, read the  AUD/USD forecast.

In Japan, BOJ Press Conference- Following the US FOMC announcement of the new QE2, worldwide central bank meetings are taking place. The Bank of Japan may accelerate stimulus for its economy. Consumer prices in Japan have fallen for seven of the past 10 years, and gross domestic product, unadjusted for changes in prices, was the smallest since 1991 last year. The country was overtaken by China as the world’s No. 2 economy in the second quarter. With a 0.10% rate, this event is of major importance to the Yen.

That’s it for today. Happy forex trading!

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Anat Dror

Anat Dror

Anat Dror Senior Writer I conceptualize, design and create multi-lingual websites. Apart from the technical work, my projects usually consist of writing content for these sites in English, French and Hebrew. In the past, I have built, managed and marketed an e-learning center for language studies, including moderating a live community of students. I've also worked as a community organizer