May 1 – Economic Events Outlook – Trading the Labor Day
Arslan Butt • 2 min read
The U.S. dollar continues to gain in the wake of weak reports from the Eurozone as well as war concerns in the Middle East. Investors are buying into the buck on the back of the positive forecast of the U.S. nonfarm payroll which is released on Friday. Today, most of the European and Asian markets are closed in the observance of labor day, however, we still have a few high impact events which are worth watching today. Take a look…
Watchlist – Key Economic Events Today
Australian Dollar – AUD
RBA Monetary Policy – The RBA (Reserve Bank of Australia) left the cash rate on hold at 1.50%. According to the rate statement, the inflation is likely to remain low for quite some time. The RBA continues to point out that inflation and household consumption will remain the key challenges they face in order to raise the rating.
The progress on unemployment and inflation is expected to be gradual. The stronger Aussie would lead to slower economic pickup. One of the reasons for the 1.50% rate is that the housing markets are slow in Sydney, Melbourne.
Overall, the RBA sounded dovish, and it’s placing a bearish impact on the Aussie.
Canadian Dollar – CAD
GDP m/m – It’s the broadest measure of economic activity and the primary gauge of the economy’s health. Statistics Canada is due to report about the figure at 12:30 (GMT). The Canadian economy is expected to grow at the rate of 0.3% vs. – the 0.1% previously expected rate.
Loonie is likely to stay supported on the back of a positive forecast. It will be nice to trade divergence in the actual GDP vs. the forecast.
U.S. Dollar – USD
ISM Manufacturing PMI – The Institute for Supply Management will release PMI figure at 14:00 (GMT) with a forecast of 58.4 vs. 59.3. This data will only make a difference if we see any surprising change in the actual release, otherwise this will have muted impact on the market. The ISM manufacturing PMI has not performed well in the two previous months and economists are expecting a drop, eventually even within the current month. If the figure continues to drop, it may pressure the FED to keep the release of rates on hold.
Summing Up – Traders, the market may be less volatile in the absence of investors as most of the markets are closed in observance of labor day. But it will be nice to trade technical setups, so stay tuned for our upcoming articles and forex trading signals. Good luck!