US labor market data was released last Friday was positive but below the forecast.
Nonfarm payroll rose by 156 000 in September against the forecast of +175000 and revised number of 167000 in August. Unemployment rate has increased by 0.1% in September against the forecast of 4.9% and the level of 4.9% in August.
Average hourly wages has grown by 2.6% on annual basis (+0.2 percent in September).
The data has lowered chances of the rate hike in the US in November to 8.3%.
According to the latest data by CME Group after the release of the U.S. labor market last Friday, probability of the rate hike in December has increased from 63.4% to 65.1%.
Last Friday the Pound has sharply declined in the market. Within two minutes the Pound fell by 7%. The pair GBP/USD has lost about 400 points and traded with the closing price of 1.2440. Automated trading systems, which activated after the breakdown of levels, broke through the barrier of stop losses and stop orders. The pair GBP/USD fell to the new 31-year lows below the level of $1.1200. The pair GBP/USD fell by almost 8%.
The news and macro-economic statistics scheduled for the week are as follows:
Economic calendar is uneventful. Monday is a day off in the USA, Canada and Japan.
00:45 (GMT+3) – retail sales through the electronic cards in new Zealand in September.
01:00 – NZIER business confidence index for Q3. The increase in this index will demonstrate the rise of business investments, which will a positive factor for NZD.
02:01 – (BRC) British Retail Consortium’s retail sales report for August This data demonstrates the progress in the retail sector of the UK.
03:30 – Australian government’s report on prospects for the economy and Finance with the account of the revised forecast of GDP and budget.
04:30 – volume of mortgage loans in Australia in August.
06:00 – speech by RBNZ Deputy head McDermott.
12:00 – business sentiment index and ZEW assessment of economic conditions in Germany for October; economic sentiment index in Eurozone in October. In case of the positive data the EU will go up.
17:00 – index of labor market conditions in the US for September.
02:30 – Westpac consumer confidence in Australia, which shows the trust of population to the national economy. Positive data on this index will be a positive factor for AUD.
12:00 – industrial production in Eurozone for August. The forecast is +1.2% on the monthly basis and +1.4% on the annual basis. If the forecast proves to be correct the Euro will go up. The Euro can also grow before the release of the data and fall if the data is negative.
12:00 - ZEW index of economic expectations in Switzerland for October.
21:00 - minutes from the last meeting of FOMC, which may contain guidance on future monetary policy. The minutes are important for determining future monetary policy by the US Fed and prospects of the interest rate increase. According to futures on interest rates, probability of the rate hike in November is 8.3% and in December - 65.1%.
23:30 –(API) American petroleum Institute’s report on the change to the U.S. oil reserves for the last week.
01:30 – business activity index in the manufacturing sector (PMI) in New Zealand. This index shows conditions in the business environment of the country. PMI in the manufacturing sector is an important indicator of overall economic condition in the country. A result above 50 shows the rise in activity, which is a positive factor for NZD. A month ago the index was at the level of 55.1.
02:01 – RICS housing prices index in the UK for September. This indicator shows the state of the housing market and economy as a whole, because the real estate market is highly sensitive to the changes in the business activity. It is expected that the index will be at the level of +14% against +12% in August.
03:00 – expectations of the consumer price inflation in Australia for October. The index shows consumers’ expectations of the inflation for the next 12 months.
05:30 – foreign trade balance of China in September. Chinese economy is the second largest in the world after the USA. Therefore, macro-economic data of this country has significant impact on global financial markets, on the Yuan and other Asian currencies, USD and on the Chinese and Asian stock indices.
07:30 – activity index in the service sector from the Ministry of Economy, Trade and Industry of Japan. This index shows the state of the Japanese service sector.
09:00 – inflation consumer price index (CPI) in Germany for September. This index has a strong influence on the Euro because German economy is one of the most important in Eurozone. CPI is the key indicator of inflation and changes to purchasing trends in Germany. The forecast is +0.1% on monthly basis and +0.7% on annual basis.
09:00 – EU economic summit. Presidents and Prime Ministers of the EU countries will meet to discuss measures required to resolve urgent problems.
15:30 – initial applications for unemployment benefits in the U.S. for the last week. Previous value was at the level of 249 000. US indices of export/import prices in September.
17:30 – US Department of Energy data on changes to the US stocks of oil and oil products for the last week.
19:15 – speech Patrick Harker, a member of FOMC.
04:30 – inflation indices of the producers' prices (PPI) and consumer prices (CPI) of China in September. CPI is the key indicator of inflation and changes to the purchasing trends. Significant increase in the consumer price index shows destabilization in the economy, and can provoke the People's Bank of China to tighten monetary and fiscal policy, which will trigger the rise in the Yuan. Previous value was at the level of +1.3%.
12:00 – trade balance of Eurozone for August. A month ago the index showed trade surplus of 20 billion Euros.
15:30 – US inflation indicators for September including retail sales and producer price indexes. Retail sales index is the main indicator of consumer spending in the United States, showing changes to the volume sales in the retail trade. The forecast is +0.6%. A speech by Eric Rosengren, President of Fed Boston will take place at the same time.
17:00 – Reuters/Michigan preliminary consumer confidence index October. The forecast is 92.0.
19:00 – speech of the head of the US Fed Janet Yellen. If Mrs Yellen speaks about the monetary policy in the US, volatility in the USD will rise sharply. If her speech indicates possibility of the interest rate hike before the end of the year, the USD will sharply strengthen in the foreign exchange market
20:00 – report on the number of active drilling platforms in the USA by the oilfield services company Baker Hughes. This report has a significant impact on the oil prices. Currently, the number of the active rigs is 428.