Major market moving events for 40th week of 2015

Author Haresh Menghani Category Fundamental Analysis 28 Sep 2015 Updated at 01:26 CET
Last week’s unimpressive durable goods orders failed to supress the US Dollar (USD), which managed to register a second week of consecutive gains against its major counterparts. This was on the back of various FOMC members, along with the Federal Reserve Chairwoman Janet Yellen, continued to support the first rate-hike in the federal funds rate during 2015. The Fed policymakers hawkish comments, in separate public appearances, were further supported by better than expected final GDP print of 3.9% annualised rate for the second-quarter of 2015.
Heading into fresh trading week, investors gear up for a slew top-tier economic releases, including the closely watched US employment reports, lined-up at the beginning of a new month. Here is a brief outlook on some of the important market-moving events scheduled during the week ahead.
Focus on US Employment Data
After last week's vote of confidence in the underlying strength of the US economic recovery by various FOMC makers, this week's US labour market reports would play a major role in further fuelling speculations of a rate hike by the central bank. Following a disappointment from August report, showing addition of 173,000 new jobs, market participants are expecting the report to reflect positive trend in the US labour market. The official government jobs report is anticipated to show an addition of 202,000 new jobs in September while the unemployment rate is expected to hold steady at its lowest level since May 2008 at 5.1%. The report, scheduled for release on Friday, could also be accompanied by an upward revision of the August numbers.
In the run-up to the very important US job report, pending home sales, US consumer confidence, ADP jobs report, Janet Yellen’s speech and ISM manufacturing PMI are some important highlights from this week's US economic calendar. The release of a forward looking indicator of the US housing sector, pending home sales data, is scheduled for release on Monday. The Conference Board's consumer confidence index for the month of September is scheduled for release on Tuesday.
The ADP report, which shows the number of private-sector jobs addition and also provides an early estimate for the government’s report, is scheduled for release on Wednesday. The report is expected to match August print and show an addition of 191,000 new private-sector jobs in September. Also on Wednesday, the Fed Chair Janet Yellen is scheduled to make a public appearance at the Federal Reserve's annual community banking conference, in St. Louis. Following her last week's speech that provided some clarity on the Fed's intensions to start raising interest rates in 2015, her comments are likely to add to the market volatility.
From the US manufacturing sector, Chicago PMI and ISM manufacturing PMI data for the month of September are scheduled for release on Wednesday and Thursday respectively. Both the manufacturing PMI indices are expected to continue showing expansion during September but at a slightly slower pace than recorded in August. The Chicago PMI is expected to drop to 53.2 from 54.4 in August and ISM manufacturing index is expected to come-in at 50.8, down from 51.1 in August.
Chinese Manufacturing PMI
Apart from the US economic releases, Chinese PMI data is likely to drive investor sentiment this week. Chinese PMI releases for the month of September includes official manufacturing and non-manufacturing PMI along with the final print of Caixin's manufacturing and services PMI, all scheduled for release on Wednesday. Chinese economic data, specially pertaining to manufacturing activity, is now looked at gauging the global economic health and thus could have a lasting effect on the Forex market. Further, being the largest consumer of commodities, Chinese economic data has a material impact on commodity currencies, AUD, NZD and CAD. And being Australia’s largest trading partner, AUD bears the majority of the pair on weaker Chinese economic data. The official manufacturing PMI is expected to remain below 50 mark for second consecutive month, indicating contraction, while final reading of Caixin manufacturing PMI is expected to rise a bit to 47.2 from the flash estimate of 47.0, still remain in contraction territory. Other economic data that could add to this week's move for AUD includes monthly retail sales data for the month of August, scheduled for release on Friday.
Important UK Releases
Being the only contender after the Fed to be on the path of raising interest rates, comments from BoE policy makers are always looked for any clues regarding the central bank's future monetary policy. Hence, this week's comments from BOE Governor Mark Carney accompanied with important economic releases would help in determining near-term moves for GBP pairs. BoE Governor is scheduled to speak at a public event in London on Tuesday and important data lined-up in this week's UK economic calendar include final GDP print for the second-quarter of 2015 and key PMI readings (manufacturing and construction PMI) for the month of September. UK GDP for Q2 2015, scheduled for release on Wednesday, is expected to match the second estimate of 0.7% and hence is likely to prove as a non-event for the market. However, UK manufacturing PMI, scheduled for release on Thursday, and Construction PMI, scheduled on Friday could drive GBP pairs during the week.
With a further downside risk to Euro-zone inflation due to the continuous slide in commodity prices, this week's flash estimate of EU CPI, scheduled for release on Wednesday, would be one of the key determinants for ECB's decision to extend its 1.1 trillion Euro of quantitative easing measure, ending in September 2016. Also, watch-out for the monthly GDP release from Canada, scheduled on Wednesday.
Summing it all, weaker Chinese PMI data would set the tone for this week's bullish move for USD and Friday US jobs report would eventually decide the near-term direction for the greenback.
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