FX Weekly News Outlook

Key Economic Decisions, Brexit Talks, Interest Rate Decisions and a Trade War Truce

0
170
FX Weekly

As we wrap up 2018 the first week of December is set to be a busy one for all major currencies with big data coming out and a few interest rate decisions thrown into the mix.

For the Dollar, there are key stats out every day this week. November private-sector PMI numbers due out on Monday and Wednesday. November’s ADP nonfarm employment change figures on Wednesday. Thursday there is trade and factory order numbers on and nonfarm payroll figures on Friday. As of writing this article President Trump and President Xi have agreed on a truce on the trade war which should see some volatility in the markets initially and could change the direction of some currencies and equities early on this week.

The Euro has a not so heavy week ahead in terms of data as compared with the US. November private-sector PMI numbers due out on Monday and Wednesday. October factory orders and industrial production numbers out of Germany on Thursday.

The Pound, major data out Monday Tuesday Wednesday and Thursday. November’s BRC Retail Sales Monitor numbers due out on Tuesday. Brexit will remain the key driver as the 11th December parliamentary vote draws nearer.

The Loonie has a big week ahead, with stats including 3rd quarter labor productivity numbers on Tuesday, October trade and November PMI numbers on Thursday and November labor market figures on Friday. The BoC interest rate decision and rate statement will be a big news event to watch on Wednesday for the Loonie. The BoC has been particularly hawkish, while the economic indicators have yet to support another rate hike before the end of the year, which does leave the Loonie ripe for a bounce should the BoC stand firm on its forward guidance and talk up a turn of the year move.

The Aussie Dollar, stats include 3rd quarter gross operating profit, October building approvals and November manufacturing numbers on Monday, 3rd quarter GDP numbers on Wednesday and October retail sales and trade data on Friday. The RBA interest rate decision and rate statement on Tuesday will be a big news event to watch this week. While rates are expected to be left unchanged, the devil will be in the detail, the RBA unlikely to be signaling a shift in policy this time around.

For the Japanese yen, economic data is on the lighter side, with stats limited to 3rd quarter capital spending numbers on Monday and October household spending figures due out on Friday. While we can expect the consumption numbers to have an influence, updates from the G20 Summit and economic data out of China will also influence risk sentiment through the week.

Brexit: It’s a big week ahead for the Pound, with 5-days of debates on the deal kicking off on Tuesday, ahead of 11th December vote, likely to garner plenty of attention through the week.

Crude oil: On Thursday OPEC will have their meeting and I am sure the futures market will be on sitting on the edge. There is a ramp-up in U.S shale production and was larger than anticipated output by Iran expected which is to force the Saudi’s and Russian’s hand to cut back in order to avoid another week of losses. Time will tell, how the market will react.

The Bank of England

The Bank of England is the central bank of the United Kingdom. It was established in 1694 and was privately owned in the beginning, the Bank was nationalized in 1946 so now is completely owned by the UK government. BOE’s main reason to be is to maintain monetary and financial stability in the country. Some of its other tasks are producing secure bank notes, operating asset purchase facility and keeping the inflation low and stable.

The European Central Bank (ECB)

The European Central Bank (ECB) is the central bank empowered to manage monetary policy for the Eurozone and maintain price stability so that the euro’s purchasing power is not eroded by inflation. The ECB aims to ensure that the year-on-year increase in consumer prices is less than, but close to 2% over the medium term. Another of its tasks is the one of controlling the money supply. The European Central Bank’s work is organized via the following decision-making bodies: the Executive Board, the Governing Council, and the General Council. Mario Draghi, a member of the Executive Board, is also the President of this organism.

The Federal Reserve Bank (Fed)

The Federal Reserve System (Fed) which is the central banking system of the United States. Fed has two main targets: to keep unemployment rate to their lowest possible levels and inflation around 2%. The Federal Reserve System’s structure is composed of the presidentially appointed Board of Governors, partially presidentially appointed Federal Open Market Committee (FOMC). The FOMC organizes 8 meetings in a year and reviews economic and financial conditions. Also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth.