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Current Fed Chair, Yellen spoke last week at the Jackson Hole Symposium increasing the positive sentiment for the probability of a rate hike. However, the rate hike is still unlikely to happen in September ahead of the US presidential election in November. This week’s focus will still be on the US economy being a Non Farm Payrolls report week. The NFP is favorite for news traders hence this is a very much awaited Friday.
(29 Aug – 2 Sep 2016)
Below will be the main highlights for the week;
US Consumer Confidence: Tuesday, 14.00 GMT. This figure shows the level of confidence people have on the economy. A high figure will therefore be good for the US dollar. The previous reading on July was 97.3 percent, which was a revision from 98%. Consumer confidence for August is expected to drop to 97.0%.
Unemployment Change, Germany: Wednesday, 07.55 GMT. The number of unemployed people in Germany is expected to fall to 4K from 7K. This still places the unemployment rate in Germany constant at 6.1%.
Unemployment Data, Italy: Wednesday, 08.00 GMT. More unemployment figures from the Eurozone will be released on Wednesday with the number of people not in the Italian labor force expected to remain constant at 11.6%.
Eurozone Consumer Price Index: Wednesday, 09.00 GMT. The core consumer price index in the Eurozone is expected also expected to remain constant at 0.9%. Though this event may not have high impact on the market; the markets to follow during the release are EUR crosses.
US ADP Non-Farm Payrolls Data: Wednesday, 12.15 GMT. This figure comes ahead of Fridays NFP data with an expectation that jobs created in the US will fall to 165K from 179K jobs created in July. The markets to look at during this release are US dollar majors.
Canada GDP: Wednesday, 12.30 GMT. After a huge drop of 0.6% in May, production levels in Canada are expected to have recovered and register a growth of 0.5%. This growth will have a positive impact on the Canadian dollar against its crosses.
Crude Oil Inventories, US: Wednesday, 14.30 GMT. Increase in the buildup of oil supply is expected to continue by an increase of 1.9 million oil barrels. This follows another increase of 2.5 million oil barrels last week.
Non-Manufacturing PMI, China: Thursday, 01.00.Growth of the services sector in China will be expected to remain above 50.0 with a previous reading of 53.90. The manufacturing PMI will also be released with an expectation that it will be constant at 49.9. The Caixin PMI is expected to fall from 50.6 to 48.9.
Markit Manufacturing PMI, UK: Thursday, 08.30 GMT. The manufacturing sector index in the UK is expected to remain below 50.0 at 49.0 from a previous reading of 48.2. This may have some bearish effect on the GBP.
US Initial Jobless Claims: Thursday, 12.30 GMT. This week’s new jobless claims are expected to rise from 261K to 265K. These figures are still low having remained below the 300K mark signifying a healthy job market.
US ISM Manufacturing PMI: Thursday, 14.00 GMT. The manufacturing sector index in the US is expected to fall slightly from 52.6 to 52.2 which is a second consecutive drop mainly attributed to the slowing employment market.
US Non-Farm Payrolls: Friday, 12.30 GMT. This is the main highlight for this week. The non-farm payrolls are expected to decrease to 180K from a previous figure of 250K. The overall unemployment rate is also expected to drop slightly from 4.9% to 4.8%. This is a high impact event expected to affect most currency pairs and commodities across the board with the US dollar majors being the focus.
You can view all the events scheduled this coming week in Economic Calendar
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NFP; Previous 255K, Expected 180K, Outcome 151K ;- this is very low. Unemployment rate remains at 4.9%, a worse than expected (4.8%) reading. EURUSD jumped over 80pips in the first minute of release. This will definitely lead to dollar weakness for the rest of the day, perhaps next week also and dampen the likelihood of a rate hike.