Key Fundamental FX Events for the Week of November 30th through December 4th
The following table lists the key economic data and other events that came out during the week of November 30th through December 4th, with release times displayed for the GMT time zone. The list also indicates how much each release deviated from the market consensus forecast upon release, as well as what the affected major currency pair or pairs did after each event or set of events.
Sunday, November 29th
11:50pm JPY Retail Sales 1.8% versus 0.9% expected. The currency rose.
Monday, November 30th
12:00am NZD ANZ Business Confidence 14.6 versus last 10.5. The currency rose.
12:30am AUD Company Operating Profits 1.3% versus 1.1% expected. The currency rose.
1:00am JPY BOJ Governor Kuroda said that,
“Looking at recent economic developments, the slowdown in emerging economies, particularly China, has affected Japan's exports and production. Nevertheless, as years ago, the underlying trend in inflation has also been improving steadily. Quantitative and qualitative monetary easing (QQE), which the Bank introduced in April 2013, has been exerting its intended effects toward overcoming deflation.”
The currency rose.
7:00am EUR German Retail Sales -0.4% versus 0.3% expected. The currency fell.
All Day EUR German Preliminary CPI 0.1% versus 0.1% expected. The currency fell.
8:00am CHF KOF Economic Barometer 97.9 versus 100.3 expected. The currency fell.
9:30am GBP Net Lending to Individuals 4.8B versus 4.8B expected. The currency rose.
1:30pm CAD Current Account -16.2B versus -15.2B expected. The currency rose.
2:45pm USD Chicago PMI 48.7 versus 54.3 expected. The currency rose.
3:00pm USD Pending Home Sales 0.2% versus 1.6% expected. The currency rose.
Tuesday, December 1st
12:30am AUD Building Approvals 3.9% versus -2.4% expected. The currency rose.
12:30am AUD Current Account -18.1B versus -16.6B expected. The currency rose.
1:00am CNY Manufacturing PMI 49.6 versus 49.9 expected.
1:00am CNY Non-Manufacturing PMI 53.6 versus last 53.1.
1:45am CNY Caixin Manufacturing PMI 48.6 versus 48.3 expected.
3:30am AUD Cash Rate 2.00% versus 2.00% expected. The currency rose.
3:30am AUD RBA Rate Statement noted that,
“At today's meeting the Board again judged that the prospects for an improvement in economic conditions had firmed a little over recent months and that leaving the cash rate unchanged was appropriate. Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand. The Board will continue to assess the outlook, and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target.”
The currency rose.
7:00am GBP Bank Stress Test Results noted that,
“As part of the new framework, the Bank will design and run a scenario that is intended to assess the risks to the banking system emanating from the financial cycle each year — the ‘annual cyclical scenario’. This scenario will explore emerging or latent threats to financial stability. It will not be used to change the Bank’s risk tolerance, but will aim to explore risks that are not captured by the annual cyclical scenario.”
The currency rose.
7:00am GBP BOE Financial Stability Report noted that,
“In global financial markets, asset prices remain vulnerable to a crystallisation of risks in emerging market economies. More broadly, asset prices are currently underpinned by the continued low level of long-term real interest rates, which may in part reflect unusually compressed term premia. As a consequence, they remain vulnerable to a sharp increase in market interest rates. The impact of such an increase could be magnified, at least temporarily, by fragile market liquidity.”
The currency rose.
8:00am GBP BOE Governor Carney said that,
“With the endorsement of G20 Leaders last month, the biggest global banks will in future have greater total loss-absorbing capacity —about twice our system-wide level of capital — ensuring there are sufficient liabilities to be bailed in to resolve a failing institution without recourse to public funds. By allowing a more efficient and cost-effective overall capital structure, the baseline amount of equity that banks need to hold can be lower. We will consult by the end of the year on how to implement these measures.”
The currency rose.
8:15am EUR Spanish Manufacturing PMI 53.1 versus 51.9 expected. The currency rose.
8:18am CHF Retail Sales -0.8% versus 0.4% expected. The currency fell.
8:55am EUR German Unemployment Change -13K versus -4K expected. The currency rose.
9:30am GBP Manufacturing PMI 52.7 versus 53.7 expected. The currency rose.
10:00am EUR Unemployment Rate 10.7% versus 10.8% expected. The currency rose.
1:30pm CAD GDP -0.5% versus 0.1% expected. The currency fell.
2:24pm NZD GDT Price Index 3.6% versus last -7.9%. The currency rose.
3:00pm USD ISM Manufacturing PMI 48.6 versus 50.6 expected. The currency fell.
5:45pm USD FOMC Member Evans said that,
“I admit to some nervousness about our upcoming decision,” reiterating that he “would prefer to have more confidence than I do today that inflation is indeed beginning to head higher” and that, “regardless of the exact date for liftoff, I think it could well be appropriate for the funds rate to still be under 1 percent at the end of 2016.”
The currency fell.
Wednesday, December 2nd
12:10am AUD RBA Governor Stevens said that,
“Looking ahead, nationally, the outlook appears to be for a continuation of moderate growth. The Reserve Bank issued its latest forecasts a few weeks ago. I won't go into detail here, but, in brief, year-ended GDP growth is forecast to be in the range of 2 to 3 per cent in June 2016 and to pick up a bit during the following year. Domestic inflationary pressures are expected to remain subdued. Inflation is forecast to be in the range of 1½ to 2½ per cent over the year to June 2016, and 2 to 3 per cent over the year to June 2017. The unemployment rate is projected to remain around 6 per cent or a little above over the next year, before gradually declining.”
The currency fell.
12:30am AUD GDP 0.9% versus 0.7% expected. The currency fell.
1:00am USD FOMC Member Brainard said that,
“The Federal Reserve describes normalization as ‘steps to raise the federal funds rate and other short-term interest rates to more normal levels.’ But what do we mean by ‘more normal levels’? A broad deterioration in foreign growth prospects, together with greater risk sensitivity in the wake of the crisis and changes in the rate of potential output growth, may be contributing to a ‘new normal.’ The new normal is likely to be characterized by a lower level of interest rates than in the decades preceding the crisis, which counsels a cautious and gradual approach to adjusting monetary policy.”
The currency rose.
8:00am EUR Spanish Unemployment Change -27.1K versus -10.3K expected. The currency fell.
9:30am GBP Construction PMI 55.3 versus 58.4 expected. The currency fell.
10:00am EUR CPI Flash Estimate 0.1% versus 0.2% expected. The currency fell.
10:00am EUR Core CPI Flash Estimate 0.9% versus 1.1% expected. The currency fell.
1:10pm USD FOMC Member Lockhart said that,
“Since I am just two weeks away from having to weigh in and ultimately vote on this important decision, my staff and I are getting close to a last review of the overall picture suggested by the data. I'm approaching this exercise in the spirit of a final accounting. I'm going to walk you through its highlights. As I move through the key data elements, I'll provide some commentary on how reliable—in a final accounting sense—I consider the information we have. I judge reliability in terms of how noisy the monthly and even quarterly data can be, how subject they are to material revision, and how significant is the standard error around an economic statistic.”
The currency rose.
1:15pm USD ADP Non-Farm Payrolls 217K versus 191K expected. The currency rose.
1:30pm USD Fed Chair Yellen said that,
“Reflecting progress toward the Committee's objectives, many FOMC participants indicated in September that they anticipated, in light of their economic forecasts at the time, that it would be appropriate to raise the target range for the federal funds rate by the end of this year. Some participants projected that it would be appropriate to wait until later to raise the target funds rate range, but all agreed that the timing of a rate increase would depend on what the incoming data tell us about the economic outlook and the associated risks to that outlook.”
The currency rose.
1:30pm USD Revised Nonfarm Productivity 2.2% versus 2.2% expected. The currency rose.
3:00pm CAD BOC Rate Statement noted that,
“Total CPI inflation remains near the bottom of the Bank’s target range, owing to declines in consumer energy prices. Core inflation is close to 2 per cent as the effects of the lower dollar and the output gap continue to offset each other. The Bank judges that the risks around the inflation profile remain roughly balanced over the projection horizon. Vulnerabilities in the household sector continue to edge higher while overall risks to financial stability are evolving as expected. Taking all of these developments into consideration, the Bank judges that the risks to the outlook for inflation remain within the zone for which the current stance of monetary policy is appropriate. Therefore, the target for the overnight rate remains at 1/2 per cent.”
The currency fell.
3:00pm CAD Overnight Rate 0.50% versus 0.50% expected. The currency fell.
3:30pm USD Crude Oil Inventories 1.2M versus -0.6M expected. The currency rose.
5:25pm USD Fed Chair Yellen said that,
“I don’t need unanimity. I think we have to tolerate some dissent, I wouldn’t try to stifle dissents, and I would even expect some at critical junctures. On balance, economic and financial information received since our October meeting has been consistent with our expectations of continued improvement in the labor market, continuing improvement in the labor market helps strengthen confidence that inflation will move back to our 2% objective over the medium term.”
The currency rose.
8:40pm USD FOMC Member Williams said that,
“Since the start of the recession, the participation rate has come down substantially. Some people are concerned that this is indicative of a portion of society that was hit hard by the recession and sidelined in the recovery—people who want to work but have given up looking, either out of pessimism over the job market or fear that an extended time out of work has rendered them fundamentally unemployable. But much of the decline in the labor force participation rate can be explained not by disheartened workers, but by demographic and social shifts.”
The currency rose.
Thursday, December 3rd
12:30am AUD Trade Balance -3.31B versus -2.61B expected. The currency rose.
1:45am CNY Caixin Services PMI 51.2 versus 53.1 expected. The currency rose.
9:30am GBP Services PMI 55.9 versus 55.1 expected. The currency rose.
12:45pm EUR Minimum Bid Rate 0.05% versus 0.05% expected. The currency rose.
1:30pm EUR ECB Press Conference: ECB President Mario Draghi noted that,
“Based on our regular economic and monetary analyses, we today conducted a thorough assessment of the strength and persistence of the factors that are currently slowing the return of inflation to levels below, but close to, 2% in the medium term and re-examined the degree of monetary accommodation. As a result, the Governing Council took the following decisions in the pursuit of its price stability objective: First, as regards the key ECB interest rates, we decided to lower the interest rate on the deposit facility by 10 basis points to -0.30%. The interest rate on the main refinancing operations and the rate on the marginal lending facility will remain unchanged at their current levels of 0.05% and 0.30% respectively.”
The currency rose.
1:30pm USD Weekly Initial Jobless Claims 269K versus 269K expected. The currency fell.
3:00pm USD Fed Chair Yellen testifies noted that,
“Regarding U.S. inflation, I anticipate that the drag due to the large declines in prices for crude oil and imports over the past year and a half will diminish next year. With less downward pressure on inflation from these factors and some upward pressure from a further tightening in U.S. labor and product markets, I expect inflation to move up to the FOMC's 2 percent objective over the next few years. Of course, inflation expectations play an important role in the inflation process, and my forecast of a return to our 2 percent objective over the medium term relies on a judgment that longer-term inflation expectations remain reasonably well anchored.”
The currency fell.
3:00pm USD ISM Non-Manufacturing PMI 55.9 versus 58.1 expected. The currency fell.
3:00pm USD Factory Orders 1.5% versus 1.2% expected. The currency fell.
6:10pm USD FOMC Member Fischer said that,
“My current assessment of the risks to financial stability remains tentative and subject to change as we learn more or conditions shift. Policymakers and researchers need better models and data to understand the interconnections between the banking system and nonbank financial institutions. Indeed, one of the themes of this conference is data needs, and the focus on this issue is an important aspect of this conference.”
The currency fell.
Friday, December 4th
12:30am AUD Retail Sales 0.5% versus 0.4% expected. The currency rose.
7:00am EUR German Factory Orders 1.8% versus 1.3% expected. The currency fell.
All Day ALL OPEC Meetings: OPEC Secretary General Abdalla Salem El-Badri of Libya told reporters on Friday after the group failed to arrive at a decision on oil output that, “We decided to postpone this decision until the next OPEC meeting when the picture will be more clear.”
1:30pm CAD Employment Change -35.7K versus -9.7K expected. The currency rose.
1:30pm CAD Trade Balance -2.8B versus -1.7B expected. The currency rose.
1:30pm CAD Unemployment Rate 7.1% versus 7.0% expected. The currency rose.
1:30pm USD Average Hourly Earnings 0.2% versus 0.2% expected. The currency rose.
1:30pm USD Non-Farm Payrolls 211K versus 201K expected. The currency rose.
1:30pm USD Unemployment Rate 5.0% versus 5.0% expected. The currency rose.
1:30pm USD Trade Balance -43.9B versus -40.6B expected. The currency rose.
3:00pm CAD Ivey PMI 55.3 versus last 53.1. The currency rose.
5:20pm EUR ECB President Draghi: has not yet spoken. The currency fell.
Technical Recap for the Majors This Week
EUR/USD:
Forecast: Higher
Actual: Higher from a 1.05845 open to a 1.0884 close.
USD/JPY:
Forecast: Mildly Lower
Actual: Higher from a 122.798 open to 123.115 close.
GBP/USD:
Forecast: Mildly Higher
Actual: Higher from a 1.5033 open to a 1.5099 close.
AUD/USD:
Forecast: Higher
Actual: Higher from a 0.71905 open to 0.73413close.
USD/CAD:
Forecast: Lower
Actual: Mildly higher from a 1.33561 open to a 1.33663 close.
NZD/USD:
Forecast: Higher
Actual: Higher from a 0.65253 open to a 0.67465 close.
Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.