Rate decision in Australia and New Zealand, US Crude Oil Inventories, Unemployment Claims, Consumer Sentiment and Canadian employment data. These are the highlights of this week. Join is as we explore the market-movers coming our way:
Last week U.S. monthly jobs report showed the economy continues to expand in 2017. America added 227,000 jobs in January, much better than December’s gain of 157,000 jobs. The reading exceeded analysts’ forecast of a 170,000 jobs gain. The unemployment rate inched up 0.1% to 4.8% as more Americans started looking for work again. Wages have grown 2.5% in January compared to last year. Trump inherits a solid job market and will find it hard to create that many jobs with such low unemployment rate. Let’s start,Updates:
- Australian rate decision: Tuesday, 03:30. The Reserve Bank of Australia maintained its benchmark interest rate at 1.50% and kept its monetary policy unchanged in December. The decision was in line with market forecast. RBA noted that low inflation, slow wage growth and weak expansion were the main reasons behind this decision. However the central bank believes conditions will improve in the coming months thanks to above average business confidence.
- US Crude Oil Inventories: Wednesday, 15:30. U.S. crude stocks increased in the week to Jan. 27. Crude inventories edged up 6.5 million barrels exceeding analyst expectations for an increase of 2.6 million barrels. Crude prices remain relatively elevated due to the weakening US dollar index. Gasoline stocks rose by 3.9 million barrels, and demand fell 5.7% from a year ago over the past four weeks. Refinery crude declined 100,000 barrels per day, and utilization rates fell by 0.1 percentage points. U.S. crude imports rose by 530,000 barrels per day.
- New Zealand rate decision: Wednesday, 20:00. New Zealand’s central bank decided to cut rates by 25 basis points to 1.75% amid international risks, mainly U.S. political uncertainty and the Brexit aftermath. The reading was in line with market forecast. RBNZ Governor Graeme Wheeler said the bank asked the government to add further macroprudential measures such as debt-to-income ratio limits (DTI) to fight low inflation without stoking an already hot housing market. New Zealand’s economy expanded at an annual 3.6% in the second quarter and the jobless rate has declined to near eight-year lows of 4.9% in the third quarter as employment grew past all expectations.
- US Unemployment Claims: Thursday, 13:30. The number of Americans filing new claims for unemployment benefits declined more than expected for the week ended Jan. 28, suggesting the strong employment market will continue to support the US economy this year. New claims fell 14,000 to 246,000. The labor market is nearing full employment and wages are expected to grow and support the economy. Economists expected jobless benefits would reach 251,000. Economists expect new claims will reach 249,000 this week.
- Canadian employment data: Friday, 13:30. Canadian labor market expanded by 53,700 jobs in December missing forecast for a 5,100 job contraction. The majority of gains were full time positions contrary to previous reports. Full-time jobs increased by 81,300, while part-time jobs dropped by 27,600. The unemployment rate inched up to 6.9% from 6.8% in the previous month, as anticipated. And the labor-force participation rate rose to 65.8%, up from 65.6%.
- US Prelim UoM Consumer Sentiment: Friday, 15:00. Consumer confidence edged up in January to a 13-year high of 98.5, showing ongoing optimism about post-election financial policies. 44% of respondents expect the economy will improve this year, while 33% anticipate the unemployment rate will continue to decline. Current conditions remained elevated at 111.3 due to wage gains and household wealth. The six-month outlook also improved form 89.5 in December to 90.3 in January. However US allies have to prepare for the worst in regard to their relations with the US, in light of Trump’s recent attacks against Mexico, Australia and Japan. The new US president is willing to tear up the rule book that has guided relations with the U.S. since World War II, raising fear and uncertainty in the global market.
That’s it for the major events this week. Stay tuned for coverage on specific currencies
*All times are GMT.
Our latest podcast is titled Worrying wages and shining gold
- For EUR/USD, check out the Euro to Dollar forecast.
- For the Japanese yen, read the USD/JPY forecast.
- For GBP/USD (cable), look into the British Pound forecast.
- For the Australian dollar (Aussie), check out the AUD to USD forecast.
- For USD/CAD (loonie), check out the Canadian dollar
- For the Swiss Franc, see the USD/CHF forecast.