Overview of Major market movers for 47th week of 2015

Author Haresh Menghani Category Fundamental Analysis 16 Nov 2015 Updated at 11:50 CET
Following a big surge on strong NFP data, the US Dollar (USD) witnessed a temporary retreat last week after the monthly US retail sales failed to meet consensus expectations. Although, US monthly retail sales for the month of October edged up by 0.1%, it missed expectations of a 0.3% rise primarily due to a significant drop in auto sales. Core retail sales data, which excludes automobiles sales, also printed lower than 0.4% forecasted growth and came-in at 0.2%. The broad USD weakness led the overall USD Index (I.USDX) to witness a temporary setback. The index, however, managed to recover majority of the lost ground to post a weekly decline of just 0.21%.
Going forward, US inflation data and minutes from the October FOMC meeting that might clear doubts over the December interest rate hike decision, are likely to take the spotlight and would set the tone in determining the near-term direction for USD.

US CPI and FOMC Minutes
The Fed is scheduled to release the minutes of its latest policy meeting on Wednesday. Since the October meeting was not followed by a press conference, market participants are likely to look for the discussion points that might clear doubts over December rate-hike decision. Although various Fed members have talked down role of inflation in the December rate decision, market players would keep a close watch on the latest reading on US headline inflation, consumer price inflation (CPI), as a sharply lower than expected / negative print might raise questions of a change in the central bank's monetary policy stance in December.
The US CPI figure for October is scheduled for release on Tuesday. Following last month's subdued print of -0.2%, CPI for October is expected to have gained 0.2%. The core CPI number, which excludes the volatile food and energy prices, is also expected to increase marginally by 0.2% on a month-on-month basis. A print in line with forecasts would reinforce the current expectations of a December rate hike and would take USD back on track for continuing the upward trajectory in the medium-term.

Data from US Housing Sector
This week's housing data from the US features the release of government reports on building permits and housing starts for the month of October, scheduled for release on Wednesday. Following a decline of 5% to 1.1 million units pace in September, this week's data is likely to reflect September's encouraging housing starts data, showing developer's confidence in the US housing sector. Economists expect the building permits to hold steady above the 1.0 million mark and print 1.06 million units annualized rate. Meanwhile, housing starts are also expected to reach 1.15 million units annualized rate, while housing starts to retreat a bit to 1.16 million units.
US Manufacturing Data
From the US manufacturing sector, investors will confront the release of two regional manufacturing indices, namely - Empire State Manufacturing Index and Philly Fed Manufacturing Index, scheduled for release on Monday and Thursday respectively. The Empire State Manufacturing Index has remained in negative territory for three consecutive months, indicating slowdown in the manufacturing activity. The index is expected to remain in contraction territory for the month of November and print negative reading for fourth consecutive month.  Meanwhile, the drop in Philly Fed manufacturing index in last two months has been sharper than expected and analysts this time are expecting a recovery with the index expected to move back above 0.00 mark to come-in at 0.1 for the month of November. Also watch out for industrial production data for the month of October, scheduled for release on Tuesday.

BOJ Monetary Policy Decision
This week's key developments coming out from Japan would be the Bank of Japan monetary policy decision announcement, scheduled on Thursday. The decision announcement would be followed by a press conference. Following the release of weaker-than-expected third-quarter GDP report on Monday, comments from Governor Kuroda will be closely scrutinized for evaluating central bank's readiness to introduce further stimulus measures. Although, a no change is expected from this week's announcement but a revision in the economic outlook for the world's third-largest economy is likely to increase volatility in JPY pairs.
UK Economic Releases
From UK, the key highlights from this week's economic calendar includes the release of UK inflation data and monthly retail sales data. The latest print of the UK inflation data, which again turned negative in September, is scheduled for release on Tuesday. For the month of October, economists are expecting UK inflation to remain at -0.1%. Meanwhile, consumer spending, which remains supportive pillar of UK's economic recovery, is scheduled for release on Thursday. Following a strong month-on-month growth of 1.9% in September, the indicator is expected to take a sharp downturn in October with the consensus forecasting a negative 0.4% print for October.

Data Affecting Canadian Dollar
Following a renewed weakness in Canada's key export commodity, Crude, this week's data on manufacturing sales, retail sales and inflation data would now be the key determinants for CAD moves in the near-term. The Canadian economic calendar kicks off with the release of manufacturing sales data on Monday, which is expected to reverse its August decline and print 0.3% rise for the month of September. Meanwhile, the monthly inflation data (CPI) for the month of October and monthly retail sales data for the month of September are scheduled for release on Friday.
In addition to this, traders will also watch for some meaningful releases from other parts of the world. Few of the releases include, German ZEW economic sentiment on Tuesday, RBA latest monetary policy meeting minutes and New-Zealand quarter-on-quarter inflation expectations on Tuesday, and ECB President Mario Draghi's speech on Friday at the Euro Finance Week in Frankfurt.
Summing it all, this week's inflation data from major economies coupled with FOMC meeting minutes and other important data points towards the possibilities of yet another week of volatile moves in the Forex market.

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