Sun: CNY – Manufacturing PMI
Mon: USD – ISM Manufacturing
Tue: NZD – Dairy Auction, Unemployment Rate, AUD – RBA Rate Decision, GBP – Manufacturing PMI
Wed: GBP – Construction PMI, EUR – EZ Retail Sales, USD – ISM Non-Manufacturing, Durable Goods, Trade Balance
Thu: AUD – Retail Sales, Trade Balance, GBP – Services PMI
Fri: USD – Nonfarm Payrolls, Unemployment Rate and Average Hourly Earnings, CAD – Unemployment Rate
Overview
- USD Bulls didn’t get the June signal they were looking for from the April FOMC, and despite the Fed sounding a little more optimistic about global conditions, the domestic outlook was downgraded once again with both inflation and growth forecasts lowered, underscored by a weaker-than-expected Q1 GDP print. Traders now look ahead to the upcoming employment reports, with bulls hoping for further strong numbers.
- EUR Despite some weak data prints, the euro remained supported over the week, benefiting from a weaker USD. On the data front, German harmonized CPI fell into negative territory while Eurozone CPI also printed below expectations, with headline inflation falling deeper into negative territory and core CPI printing 0.8% against 0.9% expected.
- GBP Sterling strengthened over the week, bolstered by an improvement in the Brexit outlook as the latest polls show an increasing number of voters are in favor of the UK remaining in the EU. These moves were furthered by positive data flow as Q1 GDP printed above expectations, following on from a recent up tick in CPI. Domestic data focus this week will be on a raft of PMI data sets.
- JPY The Japanese yen was driven sharply higher over the week in response to the BOJ April rates meeting, which saw the bank shock markets by refraining from any further easing at this point. This decision came just as the latest inflation data showed the Japanese economy has once again slipped back into deflation. Alongside keeping current policy unchanged, the bank lowered its growth and inflation forecasts for fiscal 2017.
- AUD Recent bullishness in the Australian dollar came to a head this week, as price reversed sharply following the latest inflation data which printed well below market expectations. Traders are now increasing expectations of further easing by the RBA at their upcoming policy meeting.
- CAD The Canadian dollar has continued to strengthen this week, boosted by yet further gains in oil which continue to print fresh 5-month highs. Canadian GDP in February printed in line with expectations. Traders now look ahead to domestic unemployment rate on Friday.
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