Key Fundamental Releases this Week (10/13 – 10/17)

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Key Fundamental Releases this Week (10/13 - 10/17)

Last week, the US dollar faded despite coming off strong US jobs data, but the non-hawkish FOMC minutes took away fuel for further USD strength. By the end of the week however, we did see the market put back some bids for the greenback. What will be the theme this week? A look at the fundamental releases this week shows that it will be dominated mainly by second tier data, meaning they indirectly have impact on monetary policy, but are usually significant when taken as a trend, and usually not by single data points.

Tuesday (10/14)

AUS – NAB Business Confidence
Previous: 8
This reading has been averaging around 8. A reading above 10 might give the AUD some near-term support, while a reading of 5 or below could spell further pressure.

UK CPI y/y (September):
Forecast 1.4%
Previous 1.5%
uk inflation oct 2014

(click to enlarge; source: forexfactory.com)

If inflation is indeed going to continue falling from the 2.0% target, the BoE might start pushing the rate hike schedule toward mid-2015. Part of the timing of the rate hike will depend on its inflation projection, which will be fading because we have been seeing a slide inflation since 2011, as shown in the historic chart above.

German ZEW Economic Sentiment (October)
Forecast: 0.2
Previous 6.9
german zew economic sentiment oct 2014

(click to enlarge; source: forexfactory.com)

Sentiments for the German economy are deteriorating. When we look at the historic chart, we an see that the 0.2 projected reading would give the lowest reading since Nov. 2012. Also, it does look like we are ending a cycle of confidence, and entering a cycle of negative sentiments. If we look at the cycles in the past 10 years, a negative cycle could take about 2 years.

Wednesday (10/15)

ECB President Mario Draghi will speak at the 7th Statistics Conference by the ECB. Might give the market a reminder that there could be further stimulus. This will be a morning event. He then speaks at the European Cultural Days 2014 event, also organized by the ECB.

UK Average Earnings Index 3m/y (August)
Forecast: 0.7%
Previous: 0.6%
UK Unemployment Rate (August)
Forecast: 6.1%
Previous: 6.2%
UK Claimant Count Change (September)
Forecast: -34.2K
Previous: -37.2K
uk claimint count change sept.

(click to enlarge; source: forexfactory.com)

UK jobs data is expected to reflect some improvement in both the unemployment rate and earnings growth in August. The more timely claimant count change is a expected to remain strong, with more than 34K people fewer claiming unemployment benefits in September.

US Retail Sales m/m (September)
Forecast: -0.1%
Previous 0.6%
Core Retail Sales m/m (September)
Forecast: 0.2%
Previous: 0.3%
With summer and back to school sales over, September retail sales data is expected to be a little off compared to August, but this should not be alarming and should not have much impact on monetary policy, which aims to raise rates around mid-2015.

Thursday (10/16)

CAN: Manufacturing Sales m/m (August)
Forecast: -1.6%
Previous: 2.5%

US Jobless Claims (weekly)
Forecast: 286K
Previous: 287K
Continuing improvement in the labor market is expected.
US Philly Fed Manufacturing Index (October)
Forecast 19.9
Previous 22.5
philLy fed manuf. oct. 2014

(click to enlarge; source: forexfactory.com)

Manufacturing is in the region covered by the Philadelphia fed is expected to show expansion but at a slightly lower pace than in September. This is still an elevated level going back 3 years to late 2011.

Friday (10/16)

CAN CPI m/m (September)
Forecast: 0.0%
Previous: 0.0%
Core CPI m/m (September)
Forecast: 0.1%
Previous: 0.5%
Month-to-month inflation data is volatile, but we have seen a couple of negative inflation/flat months recently in both the headline and core data. This could bring down the annual inflation and keep a rate hike off the BoC’s radar.

US Building Permits (September, annualized)
Forecast: 1.04M
Previous: 1.00M
Building permits are expected to remain strong. Housing data this year has been flat at times and strong at others, but does show a positive trend despite not being persistent from a month to month basis.

Fed Chairwoman, Janet Yellen will be speaking at the Fed’s Boston Conference on Inequality of Business Opportunity. This will not likely have any policy discussion, but you never know.

US Prelim UM Consumer Sentiment (October)
Forecast: 84.3
Previous: 84.6
um consumer sentiment oct. 2014

(click to enlarge; source: forexfactory.com)

Last month, sentiment improved to the highest reading since November 2012 (84.9), and the second highest reading since the early part of the financial crisis back in July 2007 when the reading was sliding down and was at 92.4. So, a slight retreat is nothing to worry about. A continuing improvement might give the USD some more fuel if it has been fading during the week. If it has already been rallying during the week, it might not do much.

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