Key Fundamental Factors this Week (12/1-12/5)

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Key Fundamental Factors this Week (12/1-12/5)

This week, we have several central bank decisions. We start the week with the SNB vote on a gold-asset requirement and will end the week with the key US NFP employment report. Let’s take a look at this week’s fundamental factors.

(all screenshots from forexfactory.com)

Sunday 11/30

The Swiss National Bank (SNB) Vote on Gold Asset Requirement is open on Sunday, but the market is expecting voters to reject the requirement for the SNB to hold 20% of its assets in gold. This result should give the market confidence that the SNB can defend the EUR/CHF floor at 1.20. Otherwise, if the vote is affirmative, however the EUR/CHF has a more likely chance of falling below 1.20, as it would be more difficult and costly for the SNB to intervene.

Monday 12/1

UK Manufacturing PMI (November)
Forecast: 53.1
Previous: 53.2
UK Manufacturing
UK Manufacturing has stabilized in the past couple of months since falling almost to the expansion/contraction mark of 50. If we start seeing more of a rebound, the decline in the GBP might at least stall if not reverse.

US ISM Manufacturing PMI (November)
Forecast: 57.9
Previous: 59.0
US Manufacturing is growing, but the pace seems to be cooling a bit the past couple of months. If the data is in-line with expectations, we should see the USD give back some of its gains, unless it is already extrememly oversold in the short-term.

Tuesday 12/2

RBA Monetary Policy Statement
Forecast: 2.50%
Previous: 2.50%
We should probably not expect much from the RBA statement. The tone has been very neutral, so any direction dovish or hawkish should give the AUD a shake. The AUD has been a weakling of late, so there might be a chance for recovery if the RBA statement is simply non-dovish.

Wednesday (12/3)

AUS GDP q/q (Q3)
Forecast: 0.7%
Previous: 0.5%
AUS GDP
The AUD might fall further if Q3 GDP is 0.5% or lower. A reading above 1.0% might be needed to give the Aussie strength. It has been falling lately, so don’t be trapped by a AUD-rally on the back of barely better than-expected GDP data.

UK Services PMI (November)
Forecast: 56.6
Previous: 56.2

UK Autumn Forecast Statement: Will the government’s economic forecast reflect that of the BoE’s, which was lower inflation and growth expectations? If so, expect the GBP to remain pressured.

ADP Non-Farm Employment Change
Forecast: 223K
Previous: 230K

BoC Monetary Policy Statement
Forecast: 1.00%
Previous: 1.00%
The Bank of Canada is not expected to shift its stance on maintaining its benchmark interest rate. The CAD was strong in November, but showed some cracks last week. It will likely start softening unless the BoC is starting to be hawkish and looking for a schedule for a rate hike. .

US Services PMI (November)
Forecast: 57.5
Previous: 57.1

Thursday (12/4)

AUS Retail Sales m/m (October)
Forecast: 0.1%
Previous: 1.2%

BoE Monetary Policy
Forecast: 0.50%
Previous: 0.50%
Asset Purchase Program: 375K
The BoE has lowered its growth and inflation forecast, and thus pushing back forward guidance on raising rates. It is still expected to maintain its asset purchase program at 375K.

ECB Monetary Policy Statement
Forecast: 0.05%
Previous: 0.05%
The ECB seems to be coming closer to implementing QE. However, it is still trying to work through its current stimulus measures and will probably keep QE at bay for a couple of months unless inflation falls sharply.

Friday (12/5)

CAN IVEY PMI (November)
Forecast: 53.2
Previous: 51.2
CAN Employment Change (November)
Forecast: 5.3K
Previous: 43.1K
CAN Unemployment Rate (November)
Forecast: 6.6%
Previous: 6.5%
canada jobs
Employment change in Canada has been volatile, but we can see that the bad months are getting less worse, and the good months are improving. If employment change is positive and above 5.0K as expected, the CAD should be resilient at least to end the week and start the next one.

US Non-Farm Payroll Employment Change (November)
Forecast: 225K
Previous: 214K
US Employment Rate (November)
Forecast: 5.8%
Previous: 5.8%
USNFP
The US employment situation has been improving, but not as impressively in the past couple of months. Novebmer’s NFP is not expected to shake things up unless it comes in better than 250K (strong USD), or under 214K (weak USD)

Average Hourly Earnings m/m (November)
Forecast: 0.2%
Previous: 0.1%
Wage growth is a key criteria for the FOMC to raise rates. Seeing average hourly earnings rise to 0.2% or higher may help the USD, especially if the NFP data is better-than-expected, and if the USD has been paring its gains.

US Factory Orders m/m (October)
Forecast: -0.2%
Previous: -0.6%

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