Major market moving events for 37th week of 2015

Author Haresh Menghani Category ForexBall News 07 Sep 2015 Updated at 01:04 CET
It was another volatile week in the Forex market as disappointing PMI data from China continues to raise uncertainty over the Federal Reserve’s decision to start raising interest rate at their two-day policy meeting, starting Sept. 16. Adding to the uncertainty were Friday's mixed NFP data that showed US economy added, much lower than estimated, 173,000 jobs in August. However, drop in the US unemployment rate to a seven-year low and improvement in hourly wage rate provided some support for the US Dollar. Meanwhile, dovish comments from ECB President Mario Draghi, suggesting the central bank's willingness to act, and weaker PMI figures from UK also extended support to the greenback. Nevertheless, the overall US Dollar Index (I.USDX) managed to add some weight to its previous week's strong rebound.
 
Going forward, with very little in terms of any major economic releases from the US, investors will shift their focus and take trading cues from monetary policy decisions from Canada, New-Zealand and UK, and Australian employment details. Here is a brief outlook on some important market-moving events from this week’s economic calendar.
 
 
 
BoC, RBNZ and BoE Monetary Policy Decisions
 
A series of monetary policy decisions, scheduled this week, begins with the Canadian central bank announcing its monetary policy decision on Wednesday. Following a surprise 25 basis points (bps) rate cut announcement in July, the central bank is expected to maintain status-quo and hold its key benchmark rates stable at 0.50%. Market players, however, will keenly scrutinize to the accompanying rate statement for clues on the future monetary policy decisions.
 
Meanwhile, the Reserve Bank of New-Zealand, RBNZ, is scheduled to announce its monetary policy decision on Thursday. Following a 25 bps cut in June, consensus forecasts are expecting the central bank to announce another 25 bps cut to its interest rates in order to support the economy. A rate cut accompanied with dovish comments at the subsequent press conference would indicate further room for rate cuts, thus opening room for continuing the downward trajectory for the national currency, NZD aka kiwi.
 
Along with BoC and RBNZ, Bank of England (BoE) is also scheduled to announce its monetary policy decision this week on Thursday. The decision announcement will also be accompanied with the release the minutes of the MPC meeting on 9 September. The central bank is expected to maintain its benchmark rate at 0.5% held since Feb. 2009 and also keep its asses purchase facility at 375 billion Pounds. The minutes of the meeting is also expected to reveal majority of the members (8-1) voting to hold rates at the current level and maintaining the asset purchase facility at present level.
 
 

Important Economic Releases
 
Apart from BoE monetary policy decision economic release that could influence GBP pairs includes the release of manufacturing production and trade balance data for the month of July, both 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 and 0.1% growth in industrial production. Meanwhile, the trade balance data is expected to remain elevated and show a trade deficit of 9.5 billion Pounds as compared to 9.2 billion Pounds of deficit recorded in June.
 
Dominant Australian and Chinese economic data that could materially impact the currency market during the week includes employment data from Australia along with trade balance and CPI data from China. Key highlight from this week's Australian economic calendar features Australian employment data, scheduled for release on Thursday. Following an unexpected sharp uptick in the number of employed people during July, market participants are expecting the reports to show a nominal rise of 5.2k in August while the unemployment rate to have dropped to 6.2% from 6.3% recorded in July. Also watch-out for scheduled Chinese trade balance data on Tuesday and inflation data on Thursday.
 
From the US, the only important release scheduled during the week will be the release of preliminary University of Michigan's consumer sentiment index on Friday. The Preliminary University of Michigan's Consumer Sentiment Index reading is expected to hold steady at 91.8 in September from 91.9 in August.
 
 
With relatively empty US economic calendar, ahead of the much anticipated FOMC meeting next week, forex market traders are unlikely to confront the kind of volatility witnessed in the past few weeks. However, Australian labor market reports and other major central bank monetary policy decisions could provide some meaningful trading opportunities in their respective currency pairs.
 
 
 
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