U.S. Nonfarm Payroll ready to shake the market

Weekly Outlook: Apr 29-May 3 – It’s all about FOMC, BOE, CPI and NFP

Posted Sunday, April 28, 2019 by
Arslan Butt • 3 min read

The coming week brings a load of high impact fundamentals from all over the globe. In particular, the US FOMC, BOE Policy decision, and the US Nonfarm Payroll remain on the top. Let’s get prepared for the coming week.

Key Economic Events This Week

This week offers some of the most awaited economic events such as NFP (Non-farm employment change) and FOMC. The Greenback is likely to stay supported over the optimistic forecast of the US labor market figures.

Monday – April 29

It’s just another typical Monday with no significant activity. However, investors will be trading the market over sentiments. Looking at the forecast of NFP, it appears that the economists are anticipating positive labor market reports from the United States. Thus, investors are likely to take positions to get the maximum benefit of the news.

Nonetheless, the Core PCE Price Index and Personal Spending will be in focus at 12:30 GMT. Not much action is expected on this news.

Tuesday – April 30

On Tuesday, we can expect some excellent opportunities in the US denominated currency pairs, including the bullion market.

EUR – German Prelim CPI and Prelim Flash GDP carry importance to determine the trends in the single currency Euro. Both figures are expected to be better than the previous ones.

USD – At 14:00 GMT, the CB Consumer Confidence will be monitored by the investors. Fellows, this data will be of high importance on Tuesday as this usually causes excellent tradeable volatility in the market. It’s expected to be 126.2 vs. 124.1, giving us another reason for a bullish Dollar.

Wednesday – May 1

On Labor Day, European banks will be closed for this holiday, which tends to have a substantial impact on liquidity. However, it’s going to be the second most important day after Friday this week as the US Federal Reserve will be releasing the FOMC statement and interest rate.

USD – FOMC & ADP Report
The focus will remain on the ADP Non-Farm Employment Change at 12:15 GMT and FOMC Statement at 18:00 GMT. The Federal Reserve completed its dovish shift in its all-important March meeting by signaling that it will not raise interest rates this year. Although investors aren’t expecting any change in the Fed Fund Rate, the volatility can be seen on the news release. Reporters will likely ask Fed Chair Jerome Powell about the next move in rates, and his answer will garner a lot of attention.

Thursday – May 2

Typically, the market exhibits fragile trading volume and volatility ahead of the big day as the investors try to save their shots ahead of the NFP. Yet, the Sterling pairs will remain in highlights on the release of Inflation report and BOE Monetary Policy decisions.

At 11:00 GMT, the Official Bank Rate rate will be monitored. The odds of a rate change are almost 0%. BOE is widely expected to keep the rate on hold at 0.75%. The Bank of England is still on course to raise interest rates, had it not been for the high level of uncertainty due to Brexit. Does the delay in the UK’s exit from April to October provide more certainty and raise the chances of a rate rise?

So what’s there for us to trade?

Well, my friends, it’s the MPC Official Bank Rate Votes. The BOE MPC meeting minutes include the interest rate vote for all MPC members during the most recent meeting. The division of votes presents an insight into which members are shifting their stance on interest rates and how likely the committee is to determine a rate change in the future. For the moment, the votings are 0-0-9, which means that all the members are expected to vote to hold the rate.

Friday – May 3

The US NFP (Nonfarm Employment Change) and Unemployment Rate will remain under the spotlight. Both of these economic data sets will be monitored at 12:30 GMT. NFP is expected to be negative at 181K vs. 196K in the last month.

Whereas the unemployment rate is likely to stay unchanged at 3.8% and the Average Hourly Earnings are expected to rise by 0.3% vs. 0.1%. The weaker data will offer an opportunity to the short Greenback for quick 60-100 pips and vice versa.

That’s all for now, but stay tuned for live market updates and forex trading signals. Good Luck!

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