Growth, Inflation, interest rates and employment statistics; 4 of the pillars of fundamental analysis. And this week, we have plenty of these types of data to satisfy at least one school of trading. Canada, the Eurozone and the US report GDP figures.
The central banks of Japan and Canada and the US FOMC release interest rate decisions. Australia, the US and the Eurozone issue measures of inflation and we look forward to timely employment numbers from the US. Add to this US consumer confidence figures and various manufacturing gauges and it makes for a full diary for those who care about the World economy.
On Tuesday, we receive consumer confidence numbers from the US. The last few prints have been quite volatile. Expectations are for a slight rise in the October number to 127.5 from September’s 125.1. Late on Tuesday evening/ early Wednesday morning the Australian (Q3) consumer price index is expected to have risen to 1.7%.
Wednesday afternoon could be quite volatile especially in the USDCAD currency pair. First up, we have the US ADP employment change with expectations of 115,000 new jobs created. US 3rd quarter GDP is released shortly afterwards with analysts expecting a fall to 1.6% (annualized) from 2.0%. The Bank of Canada will likely keep rates on hold at 1.75% and later in the day the US FOMC is expected to cut US interest rates by a quarter of 1% to give a range of 1.5%-1.75%.
The Bank of Japan is unlikely to surprise on Thursday as Japanese interest rates should remain unchanged at negative 0.1%. Later in the morning both Eurozone inflation and GDP are expected to fall with CPI estimated at 0.7% Y/Y for October and 3rd quarter GDP estimated at 1.1%. Conversely Canadian GDP is expected to rise to 1.4% Y/Y for August when it is released in the afternoon. US Core PCE is predicted to fall to 1.7% Y/Y for September.
Friday, and again we will receive more information about the Canadian and US economies. US Non-Farm Payrolls is forecast to be a poor reading of 88,000 new jobs created. The US Institute of Supply Management manufacturing report should show a slight improvement to 49 for October vs 47.8 for September. Canadian manufacturing PMI is expected to remain above 50 for October.
So lots of interest around the US and Canadian economies and more gloomy assessments for Europe. A week for “macro” fans to take on the chartists, behavioralists, contrarians and HFTs that make up this wonderful phenomenon called the market!
Last Good luck and good trading! Ben Robson
Ben Robson is the CEO of Spectrex Commodities and author of Currency Kings- How Billionaire Traders Made Their Fortune Trading Forex And How You can Too.
