2016-09-05 18:02:52


The stats on the US labour market provided last Friday may force the FED to question the necessity of raising interest rates in September. Both Fed’s Head Janet Yellen and Vice-Chairman Stanley Fischer had indicated earlier in August that they were ready to raise rates if the economic data required them to do so. According to US Bureau of Labor Statistics data provided last Friday, non-farm payrolls increased by 151,000 in August against a forecast of + 180,000. June's and July's value were revised from 290,000 to 271,000 and from 255,000 to 275,000, respectively. The unemployment rate remained at 4.9% in August despite an expectation of 4.8%. US average hourly earnings amounted to 0.1% in August as compared with a forecast of 0.2% and a previous value of 0.3%.

CME Group says, interest rate futures estimate an interest rate hike possibility in December at over 50%, just like before the NFP publication. September's possibility of an interest rate hike dropped to 21% against a forecast of 24% issued before NFP data.

As always, we expect the publication of important macroeconomic data and several important news releases over the upcoming trading week.

This trading week is rich in economic events. The main publications are: RBA's decision on the Australian interest rate (07:30 GMT+3, Tuesday), Eurozone's GDP in the second quarter (12:00, Tuesday), Swiss National Bank Jordan's speech (17:15, Tuesday), official data on UK industrial output and manufacturing industry in July (11:30, Wednesday), Bank of England MPC's report on UK inflation (12:00, Wednesday), Bank of Canada's decision on interest rates (17:00, Wednesday), Fed's Beige Book (21:00, Wednesday), Japan's GDP in the second quarter (02:50, Thursday), ECB's decision on interest rates (14:45, Thursday), ECB's Mario Draghi press-conference (15:30, Thursday), Switzerland's unemployment rate in August (08:45), Bank of England's report on consumer price inflation (11:30 Friday).

Weekly review for September 5 - September 11, 2016

Monday
US holiday, Labor Day, US exchanges closed.

11:30 (GMT+3) – Markit's business activity index for the UK service sector in August (50 against July's value of 47.4).

12:00 – Eurozone's retail sales in July.

Tuesday
07:30 – RBA's decision on the Australian interest rate (forecast remains unchanged at 1.5%). RBA's accompanying statement. This will be RBA's last meeting governed by Glenn Stevens. The publication will increase volatility in AUD-pairs and give rise to many trading opportunities.

08:45 – Switzerland's GDP in the 2nd quarter (forecast at +0.4% and +0.9% on a year-on-year basis). The publication will increase volatility in CHF-pairs and give rise to many trading opportunities.

12:00 – Eurozone's GDP in the second quarter (forecast at +0.3% and +1.6% on a year-on-year basis).

17:00 – a very important economic indicator of the US service sector state (ISM's business activity index in the service sector in August), forecast of 55.7, a positive factor for the dollar. Volatility in USD-pairs will increase at the moment of publication.

The Global Dairy Trade Index will be published after 17:00. The index normally influences NZD quotes. Previous value: +12.7%. Growth in value will have a positive effect on NZD, and vice versa.

17:15 - Swiss National Bank's Jordan's speech. If Jordan broaches the subject of the Bank's monetary policy, CHF quotes will be influenced and volatility in CHF pairs will increase.

Weekly review for September 5 - September 11, 2016

Wednesday
02:30 – Australia-AIG construction index for August.

04:30 – Australia's GDP for August (forecast at +0.4% and +3.2% on a year-on-year basis). The publication will increase volatility in AUD-pairs and give rise to many trading opportunities.

09:00 – Germany's industrial output in July (forecast of +0,2%).

11:30 - Data on UK industrial output and manufacturing industry in July. The indicator is expected to grow to +1.6% (+1.9% on a year-on-year basis), which will consolidate the pound. If not, the pound will drop.

12:00 - Bank of England's MPC's report on UK inflation, really important information that influences the Bank of England's monetary policy. In case the report provides a positive signal concerning inflation forecasts, the pound will grow, and vice versa. A volatility boom expected may give rise to many trading opportunities regarding the pound and the FTSE100 index.

17:00 – the UK National Institute of Economic and Social Research (NIESR)'s estimate of GDP growth rates for August.

17:00 - Bank of Canada's decision on interest rates and accompanying statement. Current rate level: 0,5%. The publication will increase volatility and give rise to many trading opportunities regarding the CAD.

21:00 - Fed's Beige book.

23:30 - API's weekly petroleum inventory report for the USA.

Weekly review for September 5 - September 11, 2016

Thursday
01:55 – Deputy Governor of the Reserve Bank of Australia Lowy's statement.

02:50 – Japan's GDP for the second quarter. Zero growth expected. Japan's economy accounts for about 10% of the global GDP, being the third largest economy in the world. Weak data on GDP increase a possibility of larger expansionary actions by the Bank of Japan at an upcoming meeting on 20-21 September, which may give rise to a counter downward trend for the yen.

Data on China's trade balance in August will be provided from 02:00 to 03:30. The Chinese economy is the world's second largest one, yielding only to the US'. The impact of Chinese economic growth rates on the financial market is extremely high. The growth in the economy of China has been slowing down recently.

Publication of weak statistics will affect the yuan and the whole Asian stock market.

04:30 – data on Australia's trade balance in July The publication will increase volatility in AUD-pairs. Weak data will affect the AUD, and, vice versa, positive stats will support it.

14:45 – ECB's decision on interest rates The rates are expected to remain unchanged. If the rates are cut, the euro will skid across the whole currency market.

15:30 – ECB's press-conference and Mario Draghi speech on the current situation and further QE plans in eurozone.

17:30 – The United States Department of Energy will publish a weekly report on petroleum inventories.

Weekly review for September 5 - September 11, 2016

Friday
01:45 – retail sales (including card transactions) in New Zealand for August.

04:30 – inflation indexes (manufacturers' and retail prices in China) for August.

04:30 – Australia's mortgage loans in July.

08:45 – Switzerland’s unemployment rate in August. The previous value was at 3.3%. Switzerland's unemployment rate staying within 3.5%-4.0% for a long time is one of the world’s lowest, which is a strong feature of the Swiss economy.

09:00 – Germany's trade balance for July, a benchmark of eurozone's economy. Increased volatility in the euro and European indexes, mostly DAX30, is expected.

11:30 – Bank of England's report on consumer price inflation and the UK trade balance in July (the fist month after the Brexit vote). A volatility boom is expected for the pound and FTSE100.

16:30 – Data on Canadian labour market.

20:00 – Baker Hughes' report on US oil drilling rig count, an important indicator of the US oil sector activity which has a significant impact on oil quotes. US active drill rigs currently amount to 407.

Weekly review for September 5 - September 11, 2016