This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
Will the NFP be strong this time?
What will happen?
Non-Farm Payrolls are published on June 4, 15:30 GMT+3.
Last time, the market was rather unimpressed with the US economic data. While the Average Hourly Earnings of 0.7% were significantly higher than the expected 0.0%, the other two hey indicators underperformed: the Non-Farm Employment Change was 266K against the forecast of 990K, and Unemployment Rate of 6.1% turned out to be notably higher than the expectation of 5.8%.
How to trade the NFP data?
As a result of the market disappointment in the above case, the USD dropped upon the release of the data and continued into fluctuation later on. Therefore, although most observers should be now prepared for rather weak data in the coming release, there is always room for a surprise – in whichever direction it drives the USD.
- If actual figures exceed expectations, the USD may rise;
- If data is weak, the USD may drop.
Instruments to trade: EUR/USD, USD/JPY, GBP/USD, USD/CAD
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.
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The RBA and the Bank of Canada will add volatility to the AUD and the CAD, while USD is expected to be boosted by the Non-farm payrolls.