Key Fundamental Factors this Week (9/8 – 9/12)

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Key Fundamental Factors this Week (9/8 - 9/12)

Monday (9/8)

AUS NAB Business Confidence (August): No Forecast, July: 11
nab business confidence
(click to enlarge; source: forexfactory.com)

The key fundamental, or economic data that might move the currency market will be Australia’s NAB Business confidence, which has been steadily rising. July’s reading of 11 was the highest this year so far, and if confidence continues to rise, the AUD will be closer to reviving the strength it saw earlier this year.

Tuesday (9/9)

BOE Governor Mark Carney Speaks in Liverpool
UK Manufacturing Production m/m (July) Forecast: 0.3%, June: 0.3%

Traders are usually privy to what Carney to has to say about monetary policy. At the moment, it seems like a 2014 rate hike is out of the question, and whether there will be one in early 2015 is also in question. The impediment is a decline in inflationary pressure and lack of wage growth. Let’s see if he addresses these issues. Manuacturing has data is expected to be relatively flat. A surprise decline should continue the current pressure on the GBP, but a strong reading might not have much impact as it is not that timely (for July).

US JOLTS Jobs Openings (July) Forecast 4.72M, July 4.67

Usually this indicator might be important, but the disappointing NFP reading of 142K for August might limit the jobs openings data, which is for July. A positive surprise here might not have much impact because we already know that August jobs data was bad. However, a decline instead of rise in job openings will give the NFP data extra negativity and might be able to stall USD-strength at least in the short-term.

Wednesday (9/10)

BoE Inflation Report before Parliament’s Treasury Committee

This will be key because the lack of wage growth and limited inflation has been preventing the BoE from a rate hike this year and might make it tough to raise rates early 2015. How the Monetary Policy Committee see inflation in the horizon will clue us in on the committee’s inclination and timing to raising rates.

Reserve Bank of New Zealand Monetary Policy Decision, Statement, Press Conference – Expectation: Hold OCR at 3.50% after raising it from 3.25% to 3.50% in the previous meeting.

The RBNZ raised it’s official cash rate in the previous meeting to 3.50%, and stated that it will likely hold for a while for the previous 4-straight rate hikes to work themselves through the economy. Economic data has not been improving and the RBNZ will likely reiterate the fact that it would be unwise to do any more tightening while the economy has not fully recovered.

Thursday (9/11)

AUS Employment Change (Aug) Forecast: 15.2K, July: -0.3K
AUS Unemployment Rate (Aug) Forecast: 6.3%, July: 6.4%

aus unemployment rate

Jobs data started the year strong, but have fizzled throughout the year. The AUD has also been strong in the first half of the year, and neutral at best in the second half so far. We have not been getting consistent job growth, so while a print of 15.2K is a strong rebound from the -0.3K print in July, we might need some more strong data points to help AUD regain its glory, though in the past week, we are already seeing some signs of revival. Let’s see how the market reacts – I might be too conservative.

US Jobless Claims Forecast 306K, Last Week: 302K

The momentum of strong jobs data hit a wall last Friday with a disappointing NFP print of 142K for August. Jobless claims data is now back above 300K. A reading of 306K is not that bad, but I think the market will be more sensitive to disappointing data than impressive data. It will take a couple weeks of below 300K reading to suggest jobs data for September will rebound.

Friday (9/12)

ECOFIN Meetings

There will be plenty of issues to discuss for the 28 member states of the eurozone. We will probably hear more headlines over the weekend. At this point the EUR has been persistently bearish, and we might get some more pressure as the council meeting will likely address economic slowdown, deflationary risk, and credit issues, not to mention impact of the Ukraine-Russia crisis.

US Retail Sales m/m (Aug) Forecast: 0.3%, Previous 0.0%
Core Retail Sales m/m (Aug) ForecasT: 0.2%, Previous 0.1%

Retail sales data will give a clue on whether the economic growth in the US is sustainable, and whether employment growth has been translating to more consumption. Data has been more or less flat the last few months, and even a rebound to 0.3% might not be impressive enough. On the other hand, poor data might have more impact on the USD, which might be a bit overbought after a couple months of unstoppable climb.

US Prelim UoM Consumer Sentiment (Sept) Forecast: 83.2, July 82.5

The first estimate of Septembers consumer sentiment data is expected to show growth in confidence. In fact the forecast is calling for the strongest reading since April. If the week ends with all strong US data, the impact from last week’s poor NFP data might be brushed aside.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.