Forex Trading Market Weekly Outlook August 29, 30, 31 – September 1, 2, 2016

Last week, Janet Yellen, Fed Chair, indicated in her speech that the scope for increasing the interest rate has risen, but it is difficult to predict as to when it would be effected. She noted that there are definite improvements in the labor market and as far as consumer demand is concerned. Analysts are of the opinion that the Fed will likely raise interest rates in December after the US Presidential election which is scheduled to be held in November this year. Though officials feel that the Fed is not likely to hike rates as much as they have done earlier on during periods of high economic growth, Yellen is of the firm belief that the monetary policy would respond efficiently even if the average interest rates are lower compared to their levels in the past. The key economic data scheduled for release in the coming week include the CB Consumer Confidence, ISM Manufacturing PMI, the employment data and monthly NFP report in the US.

#1: Australia Building Approvals (08/30/2016 Tuesday 1:30 GMT)

In Australia, building permits issued in the month of June dropped 2.9 percent on month-on-month basis to 18,693 units, following an upward revision of a 5.4 percent increase in May. Market estimate was that building permits issued would increase by 0.5 percent. June marked the second straight month of drop, as permits issued for buildings in the private sector, excluding houses, fell by 2.4 percent (9,116 units) and permits issued for houses in the private sector declined by 2.3 percent (9,367 units). It is expected that there will be a 1.2 percent increase in the number of building permits issued in the month of July.

#2: US CB Consumer Confidence (08/30/2016 Tuesday 14:00 GMT)

In the month of July, American consumers were more optimistic as the index rose to 97.3, against economists expectation that index would decline to 95.6. Consumer sentiment index for the month of June was revised downward from 98 to 97.4. The consumers’ optimism in July could be attributed to upbeat current business sentiment and improvement in the labor market condition as it suggested that the economy is expanding, though at a very moderate pace. However, the opinion of the responders was divided as far as the current condition was concerned. This is because 28.1 percent of the responders said that business conditions were good and 19 percent said that conditions were bad. It is expected that the consumer sentiment index would touch the 97.2 mark in the month of August.

#3: US ADP Non-Farm Employment Change (08/31/2016 Wednesday 12:15 GMT)

According to the ADP National Employment Report published in the month of July, the private sector in the U.S. added as many as 179,000 jobs, which was better than the analysts’ forecast of 171,000 jobs. In the month of June, the ADP payrolls data was revised upward from the originally reported figure of 172,000 jobs added to 176,000 jobs. The ADP figures are reported ahead of the more wide-ranging non-farm payrolls data reported by U.S. Labor Department. The non-farm payrolls data includes the figures from both the public and private sectors. In August, it is estimated that the ADP report will show a gain of 173.000 jobs.

#4: Canadian GDP (08/31/2001 Wednesday 12:30 GMT)

In the month of May, the Canadian economy contracted 0.6 percent, recording the worst GDP data since March 2009. Wildfires raging in Alberta and the slowing down of the manufacturing sector in other parts of the country were cited as the reasons for the sharp decline in GDP. While production declined as much as 2.4 percent, utilities dropped 1.8 percent. Though the economists believe that the sharp fall in growth to be a one-time event, it does indicate that the economy is struggling to adjust to the declining commodity prices. The GDP figure for June scheduled o be released this week is expected to show a growth of 0.5 percent.

#5: US Crude Oil Inventories (08/31/2016 Wednesday 14:30 GMT)

Last week, the price of crude oil fell because of a buildup of the inventory. Crude oil stock rose by as much as 2.5 million barrels against analysts’ expectation of an increase of 500,000 barrels. During this time of the year this is unusual because the demand for auto fuels is generally high. As a result, the current scenario serves to upset the predictions of rebalancing of supply and demand, especially in the third quarter.

#6: China NBS Manufacturing PMI (09/01/2016 Thursday 1:00 GMT)

In July, China’s NBS Manufacturing PMI unexpectedly came in at 49.9, down from the reading of 50.0 in the previous month, and slightly below the market expectation. This is the first time manufacturing PMI has fallen below the 50 level since the month of February, following a decline in output, new orders and new export orders. Analysts expect that the index will remain at the same level of 49.9 when the report for the month of August is released.

#7: Australia Private Capital Expenditure (09/01/2016 Thursday 1:30 GMT)

Private capital expenditure in Australia fell by 5.2 percent in the first quarter of 2016 to A$30,613 million from the previous quarter. In the second quarter, it is expected that the private capital expenditure will shrink by 4.0 percent.

#8: China Caixin Manufacturing PMI (09/01/2016 Thursday 1:45 GMT)

In China, the Caixin Manufacturing PMI came in at 50.6 in the month of July, rising from 48.6 recorded in June. The index beat the market expectation of 48.7. The index expanded for the first time since February 2015. It is expected that the index will slip slightly to 50.1 in the month of August.

#9: UK Manufacturing PMI (09/01/2016 Thursday 8:30 GMT)

UK’s Markit/CIPS PMI fell to a reading of 48.2 in the month of July from a reading of 52.4 in June. The reading was also below the flash estimate of 49.1. This is the lowest reading for the index since February 2013. For the month of August, the index is expected to come in at 49.1.

#10: US Unemployment Claims (09/01/2016 Thursday 12:30 GMT)

The number of new people in America filing for jobless claims fell by 1,000 last week to 261,000, indicating that the labor market is remaining strong. Economists were expecting that the number of claims would touch 265,000. Jobless claims have stayed below the 300,000 mark for 77 weeks in a row. In this week’s report, analysts expect that the number of people claiming for unemployment benefits would be 265,000.

#11: US ISM Manufacturing PMI (09/01/2016 Thursday 14:00 GMT)

The ISM manufacturing index for July fell slightly to 52.6 amid delivery time delays and slower employment. However, new orders, the key factor, remained strong at a reading of 56.9, which indicates stronger employment scenario. Export orders index stood at 52.5, indicating expansion, and production was solid at 55.4. The index is expected to decline slightly to a reading of 52 for August.

#12: UK Construction PMI (09/02/2016 Friday 8:30 GMT)

The Markit/CIPS Construction PMI declined to 45.9 in July from 46 in June, beating analysts expectation of a reading of 43.8. The reading for July was the lowest since June 2009. The index is expected to come in at 46.6 for the month of August.

#13: Canada Trade Balance (09/02/2016 Friday 12:30 GMT)

Canada’s trade deficit in June was C$3.63 billion compared to the revised C$3.50 billion deficit in May. The data missed the market consensus. The deficit for June was the largest on record as exports increased 0.6 percent and imports rose 0.8 percent. The trade deficit for July is expected to be C$3.2 billion.

#14: US Non-Farm Employment Change/Unemployment rate (09/02/206 Friday 12:30 GMT)

In July, as many as 255,000 positions were added, topping the market estimates of an increase of 180,000. On the other hand, the unemployment rate was steady at 4.9 percent though economists expected it to decline to 4.8 percent. In addition, average hourly earnings edged up 0.3 percent in the month of July. Analysts expect that 186,000 jobs will be added in the month of August and the Unemployment rate will drop to 4.8 percent.