Major Market Moving Events For 2nd Week of 2016

Author Haresh Menghani Category Fundamental Analysis 11 Jan 2016 Updated at 12:07 CET
Panic sell-off in Chinese equities led to a rocky first trading week of a new calendar year for global financial markets. Worries over deteriorating Chinese macroeconomics and crashing crude oil prices triggered sharp losses for commodity currencies, namely - AUD, NZD and CAD and also helped boost safe-haven demand, Gold and JPY. Even remarkably solid December US non-farm payrolls number failed to assist USD as weaker-than-expected wage growth raised speculations of a delay in the Fed's next rate hike decision. For the week, the overall US Dollar Index (I.USDX), which measures USD strength against a basket of currencies, ended lower amid plenty of volatility.
 
Entering into the fresh trading week, investors will now look forward to the release of US monthly retails sales data along with the release of Empire state manufacturing index and Prelim UoM consumer sentiment. Also, BoE monetary policy decision along-with Australian employment data and Chinese trade balance data will be on investor’s radar during the course of the week. Let's have a brief overview on some major market moving releases scheduled during the week.
 

US Economic releases
The highlight from this week's US economic calendar features the release of monthly retail sales data, scheduled on Friday. This week's reading, for the month of December, is expected to show a decline of 0.1% against 0.2% growth recorded in November. On the other hand, core retail sales, which excludes automobile sales, is expected to register a growth of 0.2% but still portray a slowdown in consumer spending when compared to a growth of 0.4% registered in the previous month.
 
Other economic releases, which includes Empire state manufacturing index and industrial production data will assist investors in determining the strength of US manufacturing sector. Both the manufacturing readings are also scheduled for release on Friday. Manufacturing data points are expected to continue reflecting a slowdown in the US manufacturing sector by printing below 0 readings.
 
Apart from the retail sales data and manufacturing data, also watch-out for the preliminary release of University of Michigan's consumer sentiment index, on Friday. The Preliminary University of Michigan's Consumer Sentiment Index reading for January is expected to improve marginally to 92.7 from 92.6 in December.
 
BoE and UK Manufacturing Data
On Thursday, the Bank of England is scheduled to announce its monetary policy decisions and market participants are not expecting any change in the central bank's current monetary policy stance. Hence, this week's announcement is unlikely to have any significant impact on GBP pairs. However, UK manufacturing production data, which makes up around 80% of total industrial production from UK, scheduled for release on Tuesday, could provide some tradable opportunities in GBP pairs. For the month of November, UK manufacturing production data is estimated to show a 0.1% growth in manufacturing production but the industrial production is expected to remain flat on a month-on-month basis.
 
Releases Affecting Australian Dollar (AUD)
This week's dominant release that could materially impact the Australian Dollar (AUD) is Australian employment report, which is scheduled for release on Thursday. Following November’s surprisingly strong reading, the economy is expected to have shed 10,300 jobs in December and the unemployment rate is expected to rise back to 5.9% from 5.8% recorded in November. Traders will also closely track the release of trade balance data from Australia's largest trading partner, China, on Wednesday
 
Although it is a very thin economic calendar this week, few but important releases might still provide some trading opportunities to the Forex market traders. Moreover, it would be prudent to see if last week's “risk off” sentiment would spill-over to this week's movement in the Forex market.
 
 
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