2016-11-07 12:40:20

Key event of the week will be presidential election in the USA on Tuesday 8 November. The impact of election campaign on the financial markets has been strong for weeks before the election.
Future economic policy of the United States and entire financial market will depend on the results of the election depends.
In case of Clinton’s victory it is expected that the US stock markets and the USD will go up, while safe-haven assets, such as gold, the Yen will go down.
In case of Trump‘s victory it is likely that the US stock market and the USD will sharply go down, while the price of safe-haven assets will go up.

Despite relatively strong US employment data (in October the number of jobs increased by 161 000, against the forecast of +173 000 and 191 000 in September; unemployment rate fell to 4.9% from 5.0% in September), the USD fell last Friday due to uncertainty about election.

Weekly review for 7 - 13 November 2016.

Macro-economic statistics and important news of this week are as follows:



Monday
17:00 (GMT+3) – index of labor market conditions, which incorporates 19 indicators in this sector. Situation in the labour market is one of the key indicators of the country’s economic development. However, the most significant are 3 indicators (Non-Farm PayRolls, unemployment rate and hourly earnings).

23:00 – Consumer loans in the United States in September.

Tuesday
Presidential election in the USA. It is expected that volatility in the financial markets will be very high.

02:50 – Report of the British Retail Consortium (BRC) on retail sales in September.

05:00 – Chinese trade balance for October. Chineses economy is the second largest in the world after the USA. China is the world's largest importer of commodities.
Chinese important macro-economic data has a significant impact on the global financial markets, on the Yuan and other Asian currencies, the USD, commodity currencies, as well as on the Chinese and Asian stock indices. Economic growth of China is slowing down, but it is still developing at the fast pace. Chinese GDP growth in Q2 has grown by 6.7% on annual basis.
According to the forecast, surplus of the balance in Chine will be at the level of 51.7 billion yuan.

09:45 – Unemployment rate in Switzerland for October. A month ago the index was at the level of 3.3%, which is one the lowest levels in the world.

10:00 – Industrial production and foreign trade balance data of Germany in September. German economy is the driving force of the European economy. German economy is crucial for the economy of Eurozone.

12:30 – Industrial production in the UK for September.

13:00 – Inflation report by the Bank of England. According to the Bank of England, current decline in the pound will lead to the acceleration of inflation to 2.7% in 2017 and 2018, which exceeds the previous forecasts. It is expected that in 2019, inflation will be still above 2%, and then it will slow down in 2020.
According to the head of the Bank of England Mark Carney the rapid return of inflation to the target level may have significant negative effect on economic activity and labour market. It is unclear how the inflation should exceed the target level and how long it will maintain this level, before the Bank of England will raise the rate. This report will cause a surge of volatility in the pound and British stock index FTSE100.

16:15 – Started home construction in Canada in October.

18:00 – NIESR quarterly assessment of GDP growth in October. This index assesses economic growth in the UK in the past three months. The report is published before the release of the official GDP data and can has influence on the monetary policy of the Bank of England.
It will cause sharp increase of volatility in the pairs with the Pound. GDP is a general indicator of the British economy. British GDP is one of the highest in the world on annual basis. Positive GDP growth has reduced the likelihood of monetary policy easing by the Bank of England. There is improvement in the UK economy, which clearly shows that the British economy stays afloat after Brexit.

Weekly review for 7 - 13 November 2016.

Wednesday
00:30 – Report of the American Petroleum Institute (API) on changes to oil reserves in the USA for the last week.

00:45 – Retail sales in New Zealand (with the use of electronic cards) in October.

02:30 – WestPac consumer confidence index in Australia for November.

03:01 – RICS housing price index in Great Britain for October. This indicator reflects the state of the housing market and the economy as a whole, because the real estate market is highly sensitive to the business activity.

03:30 – annual report of the Australian government with the revised GDP forecasts and the budget.

04:30 – PPI and CPI of China in October. CPI is a key indicator of inflation and changes in purchasing trends. The rise in the consumer price index shows that inflation is becoming a destabilizing factor for the economy, and the People's Bank of China may tighten monetary and fiscal policies, which will cause the rise the Yuan.

08:00 – Eco Watchers index of current economic situation in Japan and in October.

13:00 – European Commission’s forecast of economic growth in Eurozone.

18:30 – Report of the US Department of Energy on changes to oil and oil products inventories for the last week.

23:00 – Interest rate decision by the RBNZ. It is expected that the rate will be reduced by 0.25% to 1.75%. Earlier, the RBNZ said that there was a need to continue monetary policy easing. Current refinancing rate of the New Zealand is at the level of 2.0%, which is one of the highest in the world among countries with the developed economy. This fact attracts investors who use “carry-trade” strategy. If the RBNZ does not cut the rate, the NZD will grow in the foreign exchange market.

Weekly review for 7 - 13 November 2016.

Thuersay
00:05 – Press conference of the RBNZ.

02:00 – Preliminary consumer price index in Australia for November.

04:00 – A speech by Mr Williams FOMC member.

16:30 – Initial applications for unemployment benefits in the U.S. for the last week. Previous number was 265 000.

22:00 – monthly report on the US budget for October.

Weekly review for 7 - 13 November 2016.

Friday
02:00 – Index of business activity in the manufacturing sector of New Zealand in October.

03:00 – A speech of the RBA Deputy Governor Mr Debelle.

07:30 – Index of activity in Japanese service sector in September.

10:00 – Consumer price index (CPI) in Germany in October. This index has a strong impact on the Euro because of the importance of the German economy for the Eurozone. CPI is the key indicator of inflation and changes to the purchasing trends in Germany.

17:50 – A speech of the Governor of the Bank of Canada S. Poloz.

21:00 – Report of the oilfield services company Baker Hughes on the number of active drilling rigs in the USA. This data has a significant impact on the oil prices. Currently, the number of active rigs is 450. Weekly review for 7 - 13 November 2016.