Major market moving events for 41st week of 2015

Author Haresh Menghani Category Fundamental Analysis 05 Oct 2015 Updated at 01:02 CET
Immediately after the release of a surprisingly weak US jobs report for September on Friday last week, the US Dollar (USD) tumbled against majority of its counterparts. The non-farm payrolls data showed US economy added only 142,000 new jobs in September as against consensus estimates of over 200,000 jobs. Moreover, downward revision of the number of jobs created in July and August added to the disappointment. Meanwhile, the unemployment rate held steady at 5.1% primarily due to a further deterioration in the labor market participation rate that slipped to a 38-year low to 62.4%. Friday's negative report pushed back expectations for the Federal Reserve’s first interest rate increase in nearly a decade. The USD, however, managed to recover after the initial reaction on the downside. Nevertheless, the overall US Dollar Index (I.USDX) registered its first weekly loss in the previous three.
Going forward, although this week's economic calendar doesn't feature any release that might alter the views of a delayed Fed rate-hike decision, but the minutes from the last FOMC meeting is likely to be the key driver for this week’s move for USD. The September meeting minutes, scheduled for release on Thursday, might provide an insight on the Fed's view of the economy and possible timing of the first rate-hike since 2006. Meanwhile, the US economic calendar begins with the release of ISM non-manufacturing PMI data for the month of September on Monday. After expanding at a faster than expected pace in August but lower than the fastest pace since 2008 recorded in July, the index is expected to decline further to 58.0 for the month of September. On Tuesday, the US trade balance data for the month of August is scheduled for release. After contracting to $41.9 billion in July from $43.2 billion in June, the US trade gap for the month of August is expected to reach $42.2 billion. Despite of the ongoing fears of a global growth slowdown, US trade deficit data continues to point towards the underlying strength of the US economy.
Elsewhere the Bank of England is scheduled to announce its monetary policy decisions on Thursday. Market players are not expecting any change in the central bank's current monetary policy stance and hence this week's announcement is unlikely to have any significant impact on GBP pairs. However, should the minutes of the meeting, also scheduled for release on Thursday, show growing number of MPC members voting for a rate-hike, it is likely to trigger an immediate short-squeeze rally for the Sterling. Also, UK manufacturing production data for the month of August, scheduled for release on Wednesday, and BOE Governor Mark Carney’s speech on Thursday, are likely to provide some momentum for GBP pairs.
Also featuring this week's economic calendar is the central bank monetary policy decisions from Australia and Japan. The Reserve Bank of Australia (RBA) is scheduled to announce its monetary policy decision on Tuesday. Economists expect the central bank to leave its benchmark rate unchanged at 2%, but continue expecting at-least a 25 bps points cut by the end of this calendar year. Hence, the accompanying policy statement, which provides the economic outlook, would offer clues on the outcome of future decisions. Also watch-out for Australian trade balance data for the month of August, also scheduled for release on Tuesday.
Meanwhile, the Bank of Japan (BoJ) is scheduled to announce its monetary policy decision on Wednesday and is widely expected to retain its current monetary policy stance. However, market participants will be keenly scrutinizing Governor Haruhiko Kuroda's comments during the subsequent press conference in order to seek clarity over expectations of a further expansion to the central bank's quantitative easing measures. Dovish comments, pointing towards further accommodative stance, is likely to act as a fresh trigger for renewed weakness for the Japanese Yen (JPY).
From Canada, after last week's better-than-expected monthly Canadian GDP print, Canadian employment report could add to the recent recovery for the Canadian Dollar (CAD). Canadian employment details are scheduled for release on Friday and an unexpected surprise is likely to trigger an immediate volatility across CAD pairs. Apart from the jobs report, watch-out for trade balance data for the month of August, which is scheduled for release on Tuesday.
Although the events lined-up during the course of the week aren't typically trend changers, but unexpected surprises would surely act as a catalyst for a fairly volatile moves in the Forex market.
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