A Packed Trading Week For EUR, USD, NZD, CAD, AUD, GBP
Kar Yong Ang | Oct 15, 2016 03:28AM ET
After a relatively quiet week, next week is packed with economic events and releases. Starting off on Monday, we have Euro Final CPI. We might continue seeing the downward pressure on EUR next week if this data comes in less than estimates.
Tuesday is certainly going to be an active trading day. We have New Zealand CPI and the RBA Monetary Policy Meeting Minutes in the focus during the Asian session; UK’s CPI during the London session; and US Core CPI during the US session.
Both AUD and NZD were supported by the positive sentiment from China last week, but a negative economic data can put the selling pressure back on these commodities currencies.
As for UK’s CPI, it is expected to come in at 0.9%, better than the previous 0.6%. However in this context for the pound, we suggest traders to continue monitoring the sentiment as traders might be discounting these potentially positive economic data.
US CPI and Core CPI are expected to come in at 0.3% and 0.2% respectively. As long as these data comes in as estimated, we believe that the US dollar will continue to be supported.
Wednesday is also another very active trading day. Starting with China GDP data - while this is not going to have a direct impact on Aussie and kiwi, it is still important to take note of the economic performance in China, as it is one of the biggest trading partners with Australia and New Zealand.
In the UK session, we have Average Earnings Index and Claimant Count Change. But again in the context of pound, we continue to put more emphasis from the sentiment aspects as compared to fundamental data.
During the US session, we have BoC Rate Statement and Monetary Policy Report. Recent economic performance in Canada hasn’t been very positive, but with the recent recovery of oil prices, we might see a rather balanced outlook and tone from the BoC. Take note of any forward guidance from BoC, as this might paint an overall direction bias for the loonie.
For Thursday, the focus start with Australia with the Employment Change and Unemployment Rate data. These data aren’t as direct as the numbers show, and traders trading these data need to be more cautious and scrutinise these data in details.
The focus then shift towards the euro during the London session, as we have the Minimum Bid Rate and ECB Press Conference. We do not expect any further rate cut from ECB, but the press conference can potentially provide more forward guidance for the Euro.
Lastly on Friday, the focus is on Canada Core CPI and Core Retail Sales. Both these data are expected to come in better than previous. Depending on the overall tone and sentiment from BoC, these data might or might not be impacting the Canadian dollar directly. In general, a miss in expected might see selling pressure on the CAD; while a better than expected data might see a buying pressure on the CAD.
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