ForexBall Education: Major market moving events for current week

Author Haresh Menghani Category Fundamental Analysis 06 Jul 2015 Updated at 02:01 CET
Last week that was dominated by news from Greece witnessed a second consecutive week of gains for the overall US Dollar Index (I.USDX). On the economic data front, the US Non-Farm Payrolls data showed lower-than-anticipated addition of 223,00 new jobs during the month of June. Further, improving US Consumer sentiment and ISM manufacturing PMI continued supporting the view for a possible rate-hike by the Fed in September. This coupled with Greek uncertainty also supported the overall US Dollar strength against most major currencies.
 
Going forward, Greece continued to make headlines, with markets reacting with a second consecutive week of gap on the back of a 'No' vote from Greece on the creditors' bailout plan. The 'No' vote now increases the likelihood of a Grexit and might pose a contagion risk to the other debt laden peripheral economies.
 
 
Apart from the developments over the Greek crisis there are other important releases/events, like the ISM non-manufacturing PMI and FOMC meeting minutes from the US along with central bank monetary policy decisions from Australia and UK, that Forex market participants will keep a close watch on. Let's have a brief outlook on some important events lined-up during the course of upcoming week.
 
US Releases

The US economic calendar begins with the release of ISM non-manufacturing PMI, scheduled on Monday. US services sector has been expanding at a descent pace but in May the PMI reading failed to match expectations and fell to 55.7 from 57.8 posted in April. For the month of June services PMI is expected to continue indicating expansion and come-in at 56.5, reflecting improving economic conditions.
 
The US Dollar bulls will look for further support from this week's minutes of the Fed's latest policy meeting held in June and is scheduled for release on Wednesday. In the last policy statement, although the Fed statement delivered a slightly dovish tone, the Fed minutes would still be interesting to see if some of the committee members supported a rate-hike in June or there was more pessimism among policy makers. Nevertheless, the minutes are likely to trigger some volatile moves for the US Dollar.
 
On Tuesday, the US trade balance data for the month of May is scheduled for release. Following a sudden drop to $40.9 Billion in April from a deficit of $51.4 Billion in March, economists are expecting trade deficit for the month of May to climb to $42.8 Billion.
 
Central Banks Monetary Policy Decisions

Monetary policy decision from the Reserve Bank of Australia (RBA) and Bank of England (BoE) are scheduled to be announced on Tuesday and Thursday respectively. Following a surprise 25 bps rate-cut in Feb. and a subsequent 25 bps cut in April, RBA has held its benchmark interest rate for the past two months and this time too, central bank watchers are not expecting any rate-cut to be announced by RBA in its rate statement for July. Further, considering that BoE’s status-quo monetary policy stance since 2009, markets are not expecting any major announcement from this week's announcement and hence is likely to prove as a non-event for the Forex market.

 
Other Releases

Apart from the central bank events, important economic releases from Australia and UK could provide some momentum trade opportunities for the Forex market participants. This week's key releases from UK economic calendar includes manufacturing production for the month of May and is scheduled for release on Tuesday. The latest reading for UK manufacturing production data, which makes up for around 80% of total industrial production from UK, is estimated to show a 0.2% growth in manufacturing production but is expected to show 0.3% decline in industrial production for the month of May. Also watch-out for the UK trade balance data, scheduled for release on Friday and is expected to print softer than a deficit of 8.6 Billion Pounds recorded in April to 9.7 Billion Pounds of deficit for the month of May.
 
Dominant Australian data, that could materially impact Australian Dollar (AUD) features Australian employment report, scheduled for release on Thursday. After printing an exceptionally strong employment figure that showed a rise of 42.0 K in the number of employed people during the month of May and a drop in unemployment rate to 6.0%, economy watchers are preparing for a sharp reversal from the June employment reports. Consensus forecast point towards a nominal addition of 0.1K in the number of employed people and unemployment rate to have risen to 6.1% in June.
 
From Canada, investors will focus on the release of Canadian monthly trade balance and employment reports, scheduled for release on Tuesday and Friday respectively. The Canadian monthly trade balance data is expected to show deficit holding steady, rather shrink for the month of May to C$2.5 Billion. Meanwhile, the Canadian monthly jobs report for June is expected to disappoint with the consensus estimate forecasting a drop in the number of employed people to drop by 4.5 K and unemployment rate to climb to 6.9% versus 6.8% recorded in May.
 
 
With the ongoing uncertainty over Greek crisis, a hawkish FOMC minutes coupled with stronger US economic releases and (or) disappointment elsewhere would continue supporting safe-haven currencies, namely USD and JPY.
 
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