Major market moving events for 39th week of 2015

Author Haresh Menghani Category Fundamental Analysis 21 Sep 2015 Updated at 12:38 CET
Last week the US Dollar (USD) broke lower on Thursday after the Federal Reserve (Fed) decided to leave its benchmark interest rates unchanged. In one of the most highly anticipated decision, the FOMC decided to delay a lift-off and maintain it’s near zero interest rate policy. Further, the accompanying statement also sounded more dovish than expected, but the Fed still left the door open for a rate hike in 2015. Also, in its quarterly economic projections the Fed lowered its growth and inflation forecasts and slashed its longer-term interest rate forecast. The overall US Dollar Index (I.USDX), however, ended the week on a flat note primarily led by weaker Euro, which ended lower on weak inflation data that kept hopes for additional easing by the ECB.
Going forward, durable goods orders, housing market data and the final GDP print from the US along with important PMI figures and ECB President Mario Draghi's testimony are the key highlights from this week's relatively thin economic calendar. Let's have a brief overview of some important market events lined-up during the week.
Important US Economic Releases
Fresh readings on existing home sales and new home sales are scheduled for release on Monday and Thursday respectively. This week's housing data will assist investors to further gauge health of the US housing sector, which remains on strong recovery path. Existing home sales for August are expected to continue the positive momentum, with a slight moderation. Consensus estimate the data to come-in at an annualized rate of 5.50 million units, down from 5.59 million units recorded in July. Meanwhile, following a lower-than-expected gains for two consecutive months, new home sales for August are expected to rise to a seasonally adjusted annual rate of 516,000 units.
Data pertaining to durable goods orders is closely scrutinized to support the optimistic views of a faster US economic growth. Durable and core durable goods (excluding transportation items) orders data are scheduled for release on Thursday. After registering growth for two consecutive months, orders for durable goods, which also includes transportation items, are expected to contract by 2.0% in August. On the other hand, core durable goods orders, which exclude transportation items, are predicted to show a marginal gain of 0.2% for August.
Investors will also watch for the final print of US GDP data for the second quarter of 2015, scheduled for release on Friday, and is expected to show an annualized growth of 3.7%, matching the second estimate. Other data to watch include revised UoM consumer sentiment for September and is scheduled for release on Friday.
After last week's dovish FOMC statement, only a better-than-expected print from this week's economic releases would add to expectations of continuing US economic growth, eventually extending some support for the weakening US Dollar. 
Important PMI Data 
Market participants would specially be focusing on some important PMI readings from China and Euro-zone, scheduled for release on Wednesday. The Chinese Flash Manufacturing PMI data for the month of September is expected to print better (47.6) as compared to previous month (47.3) but still remain in contraction territory, below 50.00 mark for eight consecutive month.
From the Euro-zone, investors will be particularly interested in the release of flash version of manufacturing and service PMI readings from Euro-zone's two largest economies, Germany and France, along with the broader Euro-zone PMI reading for the month of September. The German and broader Euro-zone PMI numbers are expected to remain in expansion territory, but the expansion rate is expected to moderate as compared to the previous month. Meanwhile, the French manufacturing PMI might still continue showing contraction for third consecutive month but the services PMI is expected to remain marginally above 50.00 mark, which separates expansion and contraction.
In addition to this, investors will closely scrutinize ECB President Mario Draghi's testimony before the European Parliament's Economic and Monetary Affairs Committee on Wednesday. After the widespread fears of China led global economic slowdown and downside risks to Euro-zone inflation due to the continuous slide in commodity prices has raised market expectations of additional easing measures by the ECB. Hence, volatility could be expected to rise in Euro pairs during the event.
Other key economic release featuring this week's economic calendar features the release of Canadian monthly retail sales data on Wednesday, monthly New-Zealand trade balance data and German Ifo business climate for the month of September, both scheduled for release on Thursday.
With very little in term of any major economic events scheduled for the upcoming week, the Forex market could possibly witness narrow, range-bound trade. However, a high degree of deviation from the expected data points trigger volatility in the Forex market.
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