With inflation, retail sales, an appearance by Ben Bernanke and many more events, this week will be exciting. Here’s an outlook for the major market-moving events that will shape forex trading.
IMF meetings are held during the weekend. This time, the high tensions between countries on currency values make the statements from these meeting very important. The currency war is raging. On Monday, the US, Canada and Japan are on holidays. This means thinner volume and that the echoes from the Non-Farm Payrolls and the IMF will move the markets. And then we have a fresh flow of data:
- British inflation data: Published on Tuesday at 8:30. British inflation remains above the government target, fueling calls for a rate hike, despite the fragile situation in the UK. It’s expected to stubbornly remain at the same level it was at last month – 3.1% (annualized. Any result will rock the pound. Note that after this release, Mervyn King and some of colleagues appear in parliament and will publicly testify on inflation and the economy.
- US FOMC Meeting Minutes: Tuesday, 18:00. The recent decision by Bernanke and co. gave the first hints about a possibility of further dollar printing in the upcoming meeting in November. This statement will provide further details, and will expose the differences inside the central bank – some want a totally different policy. This will rock the markets, despite the relatively late hour.
- British employment data: Wednesday, 8:30. While higher inflation boosts the Pound, the job market weakens it. Claimant Count Change, the earliest job report in the UK, is expected to show another rise in the number of unemployed people – 2.8K, similar to last month. The unemployment rate is expected to remain unchanged at 7.8%.
- US Federal Budget Balance: Wednesday, 18:00. The huge deficit in that the US government has is painful for the dollar. In the past two months, this deficit was slightly smaller than expected. It’s expected to squeeze this time again – from 90 to 52 billion. Only a surplus will give a serious boost to the dollar, but this is unlikely now.
- US Unemployment Claims: Thursday, 12:30. Last week’s weekly jobless claims report exceeded expectations and gave hope for a positive NFP. From 445K, the figure is now expected to rise back to 452K. Only a drop under 430K will show that the job market is significantly improving. A rise above 500K will be very worrying.
- US PPI: Thursday, 12:30. Producer prices were slightly higher than expected last month – 0.4%, but this still doesn’t reflect an inflationary change. PPI is expected to edge up at a slower rate this time – 0.2%. Core PPI is likely to copy last month’s rise – a modest 0.1%.
- American and Canadian trade balance: Thursday, 12:30. This double-feature release provides high volatility for USD/CAD. The American deficit is expected to remain almost unchanged at 43 billion, while the Canadian deficit is expected to squeeze from 2.7 to 2.1 billion. The impact of the weaker dollar probably won’t be reflected in this release.
- Ben Bernanke talks: Friday, 12:15. The chairman of the Federal Reserve will speak in Boston, and might shed more light on possible quantitative easing moves in the upcoming meeting in November. He’ll also have a chance to comment on the recent jobs report. Even if Bernanke doesn’t say anything significant, the markets rock.
- US CPI: Friday, 12:30. The hawks at the Federal Reserve are weak – inflation is very tame, and there’s no urge for tightening steps. The Consumer Price Index (CPI) is expected to rise by 0.2%, slower than last month’s 0.3% rise. Core CPI, that remained unchanged last time, is expected to rise by a very-modest 0.1%. Only rises above 0.5% will cause worries.
- US Retail Sales: Friday, 12:30. This is a key indicator of consumers’ moods. Retail sales rose steadily in the past two months – 0.4%. A 0.5% rise is expected now. Core retail sales, which are carefully watched by the Federal Reserve, are expected to rise by 0.4%. The simultaneous release of CPI and sales will create high volatility.
- US Consumer Sentiment: Friday, 13:55. This highly regarded survey by the University of Michigan supplies a strong ending for the week. The initial release will probably show a rise from 68.2 to 69.1 points. The indicator already reached 76 points a few months ago.
* All times are GMT.
That’s it for the major events this week. Stay tuned for coverages on specific currencies.
- For EUR/USD, check out the Euro/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 forecast.
- For the New Zealand dollar (kiwi), read the NZD forecast.
- For USD/CAD (loonie), check out the Canadian dollar forecast.
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