April 9 – 13: Economic Events Outlook – Risk-off Sentiment Dominates

Posted Monday, April 9, 2018 by
Arslan Butt • 3 min read

The trading week following the US NFP is usually lighter from a fundamentals point of view. The market is likely to follow the technical levels. Nevertheless, there are few events which are worth watching this week. Let’s take a quick look…

Top Economic Events

Over the previous week, the US dollar fell after the US job rate grew less than expected. The March NFP was only 103K. The unemployment rate remained stable at 4.1%, but the wages are up to 0.3%, better than had been expected.

Monday – April 9

Typically, in the absence of any major economic events, the market continues to trade the NFP. Having said that, we can expect a weaker dollar on Monday.

Great Britain Pound – GBP

Halifax HPI m/m – A leading indicator of the housing industry’s health because rising house prices attract investors and spur industry activity. The Halifax Bank of Scotland is due to release the data at 7:30 (GMT) with a forecast of 0.1% vs. 0.4% in March 2018.

Tuesday – April 10

US Dollar – USD

PPI m/m – The producer’s price index is considered a leading indicator of consumer inflation. When producers charge extra for goods and services the higher costs are usually passed on to the consumer. A higher PPI can lead to higher CPI which pressures central banks to release hawkish monetary policies.

The current PPI figure is anticipated to grow by 0.1% m/m in March, which is half of February’s rate. Whereas, the Core PPI is expected to repeat the previous gain of 0.2%.

Wednesday – April 11

Australian Dollar – AUD

RBA Gov Lowe Speaks – At 5:05 (GMT), Gov Lowe is due to speak about recent developments in the Australian and global economies at the Australia-Israel Chamber of Commerce, in Perth. Slight volatility can be expected in response to audience questions.

Great Britain Pound – GBP

Manufacturing Production m/m – The Office for National Statistics will release the Manufacturing Production m/m at 8:30 (GMT) with a forecast of 0.2%, higher than the previous rate of 0.1%.

This is one of the leading indicators of economic health. Production reacts quickly to ups and downs in the business cycle and is correlated with consumer conditions such as employment levels and earnings.

Eurozone – EUR

ECB President Draghi Speaks – The ECB’s (European Central Bank) President Mario Draghi is due to speak at the Generation Euro Students’ Award Ceremony, in Frankfurt. He is expected to answer audience questions. Any answers about an economic slowdown, inflation, or tapering of the QE (quantitative easing) program will be monitored and traded.

US Dollar – USD

CPI m/m- The US labor market has improved and the GDP came out better than expected but inflation is something the US is still worried about. Back in February, the Core CPI rose by 0.2%. This time, economists aren’t expecting any change in the US inflation. Overall, the US inflation stays at 1.8% y/y.

Any divergence between forecast and the actual release is likely to cause massive volatility in the market. 

FOMC Meeting Minutes – The FOMC meeting minutes are a detailed record of the FOMC’s most recent meeting, providing in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.

Despite the rise of the interest rate, the Fed failed to support the US dollar. This is mostly because the Fed upgraded the outlook for the year 2019 and 2020 while leaving 2018 as is. Investors are expecting a hawkish tone from the FOMC meeting minutes, but I think it’s going to be dovish.

Thursday- April 12

Japanese Yen – JPY

BOJ Gov Kuroda is due to speak at the BOJ quarterly branch manager’s meeting, in Tokyo at 0:30 (GMT). As head of the Japanese central bank, he is likely to give clues about future policies, especially as the Japanese yen is getting dramatically stronger against the US dollar. Being an export-oriented economy, the BOJ hates a stronger Yen and typically intervenes to make it weaker.

Eurozone – EUR

ECB Monetary Policy Meeting Accounts – At 11:30 (GMT), the ECB will release its minutes from the ECB’s meeting in March. It was a usual meeting with no new forecasts, but the tug of war between hawks and doves is still on. Investors are advised to follow for further clues about the closing of the QE program.

Friday – April 13

US Dollar – USD

Prelim UoM Consumer Sentiment – The University of Michigan will be releasing the consumer sentiment figures at 14:00 (GMT). The US consumer sentiment is expected to be 100.8, slightly below the previous month’s figure of 101.4. Overall, the higher figure is considered good for currency.

That’s it for now, thanks for reading and check FX Leaders News Trading Strategy for a better understanding of how to trade these events. We are expecting some really nice trades, so stay tuned to FX Leaders.

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