Major market moving events for 49th week of 2015

Author Haresh Menghani Category Fundamental Analysis 30 Nov 2015 Updated at 11:59 CET
In a holiday-shortened week, the US Dollar continued to gain ground against most major currencies even after a mixed bag of US economic releases. US consumer confidence for the month of November dropped to its lowest level since Nov. 2014 while data on personal spending / consumption and housing sector data portrayed not very promising start for the fourth-quarter. Meanwhile, better-than-expected growth rate of 2.1% in the third-quarter, coupled with a positive durable goods orders report continued supporting the prospects of a Fed rate-hike decision on December 16. Nevertheless, the overall US Dollar Index (I.USDX) ended the week on a positive note amid thin volume trading conditions.
This week, traders will now be focusing on some important economic releases, including the key US non-farm payrolls (NFP), and monetary policy statements from various central banks, especially from the ECB.
In the run-up to the much awaited ECB monetary policy decision on Thursday, a couple of major central bank policy meetings namely, RBA and BoC, kicks off with the RBA monetary policy decision announcement on Tuesday. The BoC is scheduled to announce its monetary policy decision on Wednesday. Central bank watchers are not expecting any major policy actions to be announced either by RBA or by BoC in their rate statements for November. Moreover, as compared to the much awaited ECB announcement and the release of NFP data later during the week, RBA and BoC announcements are unlikely to have any major impact on the Forex market.
Apart from RBA monetary policy decision, AUD will confront some important economic releases during the week. Notable economic releases that could possibly lead to an eventful week for AUD pairs includes GDP data for the third-quarter of 2015, scheduled for release on Wednesday, and is expected to show quarterly growth of 0.7% over 0.2% recorded in the previous quarter. Also watch out for Australian monthly retail sales and trade balance data, scheduled for release on Thursday and Friday respectively.
Meanwhile, this week’s manufacturing PMI figures from China is likely to have a material impact on trader’s sentiment. This week’s Chinese PMI figures includes the official manufacturing PMI and Caixin Manufacturing PMI, both scheduled for release on Wednesday. Both, the official manufacturing PMI and Caixin manufacturing PMI, are expected to remain in contraction territory and print reading below 50 mark that separates expansion and contraction. Being the largest manufacturing economy, Chinese manufacturing data always bears a lasting effect on commodity currencies (AUD, NZD and CAD). And being Australia’s largest trading partner, AUD faces the majority of the pain on weaker Chinese economic data.
Other economic data that could add to this week's move for CAD pairs includes the release of monthly GDP data for the month of September, scheduled on Tuesday.
Moving on to the key ECB monetary policy decision announcement on Thursday, market participants seem to prepare themselves for any potential fresh easing steps announcements aimed at fulfilling the ECB’s price stability mandate. The central bank is expected to possibly cut the deposit rates or enhance its QE program. The monetary policy decision announcement will be followed by press conference addressed by the ECB President Mario Draghi where a prepared statement on the new macro-economic projections, that influence the central bank's monetary policy stance, will be read. Although the market might have already priced-in some sort of further monetary easing, what would matter would be the quantum of easing. However, should ECB disappoints, we could witness a sharp short covering rally for EURUSD. Moreover, Draghi's comments should also fuel volatility in Euro pairs.
Ahead of the ECB, market will confront the latest reading of composite Euro-zone inflation details, scheduled for release on Wednesday. The flash version of the Euro-zone headline inflation for the month of November is expected to register a small rise and come-in at 0.2% while the core CPI (excluding food, energy, alcohol, and tobacco) is expected to hold steady at 1.1%.
Meanwhile, the center of attraction from this week's economic calendar would still be the release of NFP data for the month of November, scheduled for release on Friday. US jobs report, popularly known as NFP, has always been the most keenly watched economic announcement from the US and has traditionally been known for generating substantial volatility across financial markets. This week's release would be no exception as strong labor market report would further reinforce expectations of a December lift-off by the Federal Reserve. Following lower-than-expected prints for four consecutive months, data for the month of October surpassed even the most optimistic expectations taking the unemployment rate to 5.0%, the lowest level recorded since May 2008. Although this week's report for the month of November is expected to reflect a drop to 201,000 of new jobs added to the economy, it is unlikely to have any direct impact on the December 16 Fed rate decision unless the data disappoints the market by a huge margin. The unemployment rate is expected to remain steady at 5.0% while the average hourly earnings is expected to rise by 0.2% as against 0.4% rise in October.
An early estimate to the government's jobs report is taken from the ADP report, which shows the number of private-sector jobs addition during the previous month. The ADP report is scheduled for release on Wednesday and is expected to show a rise in private sector employment by printing 191,000 new private-sector jobs creation in November.
Heading up to the very important US jobs report on Friday, pending home sales, Fed Chair Janet Yellen’s testimony and ISM PMI numbers 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, is scheduled for release on Monday. From the US manufacturing sector, Chicago PMI and ISM manufacturing PMI data for the month of November are scheduled for release. The Chicago PMI, scheduled for release on Monday, is expected to moderate a bit to 54.3 for November as compared to 56.2 registered in October. Meanwhile, the ISM manufacturing PMI's scheduled release on Tuesday is expected to show manufacturing activity expanding in November at a slightly higher pace than that during the month of October, with the consensus expecting the index to print 50.6, up from 50.1. Meanwhile, the ISM non-manufacturing PMI for the month of November, scheduled for release on Thursday, is expected to drop to 58.1 from 59.1 in October.
On Thursday, the Federal Reserve Chair Janet Yellen is scheduled to testify about the central bank's monetary policy before the Joint Economic Committee, which will be used to evaluate the pace of monetary tightening by the Fed once a rate-hike announcement is made in December.
Elsewhere, meaningful releases that could provide some movement for GBP pairs during the course of the week includes important PMI figures for the month of November, i.e. Manufacturing, Construction and Services PMI, scheduled for release on Tuesday, Wednesday and Thursday respectively.
With several top-tier macroeconomic releases on tap, the upcoming week promises to be a week full of meaningful and volatile moves in the currency market.
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