Last week, the greenback gained some ground because of concerns related to global growth, but the gain was limited as it is anticipated that the Fed might stop the balance sheet reduction plan. China’s economic growth has slowed down, as analysts’ expected. However, talk that expansion rate was the slowest ever since 1990 could not help change the mood. Meanwhile, trade talks between the U.S. and China did not progress well amid warnings about global economic growth.
There has also not been any breakthrough on the Brexit front either. However, hopes of a second referendum rose and pushed GBP/USD pair above the 1.3000 level. In the meantime, the U.S. government shutdown continued with the temporary closure of La Guardia airport in New York and emphasized the economic damage. Former Trump Aid Roger Stone’s arrest was also in the news.
In the upcoming week, the Fed interest rate decision and the Non-Farm Payrolls data are due to be released. As the turbulent January comes to an end, here is an outlook on the key releases scheduled for the next week:
#1: Euro Area ECB President Mario Draghi Speaks (01/28/2019 Monday 13:00 GMT)
Mario Draghi, President of the European Central Bank, is scheduled to testify about the monetary policy and economy before the Economic and Monetary Affairs Committee of the European Parliament in Brussels. Markets often turn volatile during his speeches. This is because the traders make an attempt to understand the direction of interest rates in the future.
#2: U.K. BoE Governor Mark Carney Speaks (01/28/2019 Monday 13:30 GMT)
Mark Carney, Governor of the Bank of England, and the Monetary Policy Committee members are scheduled to participate in a Q and A session as regards the future of money at the Future Forum of the Bank of England in London. Markets often turn volatile during his speeches. This is because the traders make an attempt to understand the direction of interest rates in the future.
#3: U.S. CB Consumer Confidence (01/29/2019 Tuesday 15:00 GMT)
The Conference Board’s Consumer Confidence Index declined in December, following the modest decrease in November. In December, the Index stood at 128.1, down from the 136.4 level in November. While the Present Situation Index dropped slightly to 171.6 from 172.7, the Expectations Index fell to 99.1 in December from 112.3 in November. Forecast for January 2019: The index is expected to drop to the 125.0 level
#4: Australia CPI (01/30/2019 Wednesday 00:30 GMT)
In Australia, consumer prices increased 0.40 percent in the month of September last year from the previous month. Forecast for the fourth quarter of 2018: It is expected that the consumer prices will increase by the same 0.4 percent
#5: Australia Trimmed Mean CPI (01/30/2019 Wednesday 00:30 GMT)
In Australia, the trimmed mean CPI rose by 0.4 percent in the third quarter of last year, in line with analysts’ expectations, after rising 0.5 percent in the previous quarter. Forecast for the fourth quarter of 2018: an increase by 00.4 percent is on the cards
#6: U.S. FOMC Statement (01/30/2019 Wednesday 19:00 GMT)
The US FOMC releases the Monetary Policy Statement eight times every year. The central bank often changes the statement a little bit at each release. Traders focus on these changes to understand the direction of interest rates in the future.
The FOMC uses the Statement as a tool for communicating with investors as regards the monetary policy. It provides the outcome of the members’ vote on setting interest rates and implementing other policy measures. It also provides a commentary on the economic conditions that impacted their decision. More importantly, it provides an economic outlook and clues on future votes.
#7: U.S. Federal Funds Rate (01/30/2019 Wednesday 19:00 GMT)
In the meeting held in December last year, the Federal Reserve increased the federal funds rate target range by 25 basis points to 2.25 percent to 2.50 percent. Further, the central bank lowered the interest rate hike forecasts in 2019 amid slowing global growth and volatility in the financial markets. The interest rate was hiked four times in 2018 because of a strong labor market and solid economic growth. Interest rates were raised though President Donald Trump heavily criticized the move. Forecast for January 2019: 2.25 percent to 2.50 percent
#8: U.S. FOMC Press Conference (01/30/2019 Wednesday 19:30 GMT)
The FOMC holds a press conference 30 minutes after the announcement of the Federal Funds Rate. The press conference lasts for about an hour and has two parts: the reading of a prepared statement and answering questions by the press. As the questions can lead to unscripted answers, heavy market volatility can be expected.
#9: Canada GDP (01/31/2019 Thursday 13:30 GMT)
Canada’s economy grew 0.3 percent on a month-over-month basis in October last year, following the 0.1 percent contraction reported in September. The figure for October beat analysts’ expectations for a 0.2 percent gain. This is by far the strongest increase in economic activity ever since May last year when it registered a growth of 0.4 percent. Fifteen out of the 20 industrial sectors reported growth. Manufacturing, finance and insurance, and wholesale trade sectors led the growth. Positive contributions came in from utilities; quarrying, mining, and oil & gas extraction; retail trade; real estate, leasing, and rental sectors and the industries in the public sector.
#10: U.S. Average Hourly Earnings (02/01/2019 Friday 13:30 GMT)
In the U.S., average hourly earnings of workers rose by 0.4 percent in the month of December last year after increasing 0.2 percent in the prior month. The reading for December beat analysts’ expectations for a 0.3 percent increase. On a yearly basis, wages increased by 3.2 percent, in line with analysts’ expectations, registering the fastest rate ever since 2009 that was recorded in the month of October last year. In November, workers’ earnings rose by 3.1 percent. Forecast for January 2019: an increase of 0.3 percent is on the cards
#11: U.S. Non-Farm Employment Change (02/01/2019 Friday 13:40 GMT)
In the U.S., nonfarm payrolls rose by 312,000 in December last year after the reading for the prior month was revised upward to an increase of 176,000. The reading for the month beat analysts’ expectations for 177,000 job additions. Health care, drinking places, and food services, construction, retail trade, manufacturing sectors reported job gains. The jobs gained in December pushed the employed people in the U.S. to more than 150 million for the very first time. Forecast for January 2019: 165,000
#12: U.S. Unemployment Rate (02/01/2019 Friday 13:40 GMT)
The unemployment rate in the U.S. increased to 3.9 percent in the month of December last year from the 49-year low level of 3.7 percent reported in the prior month. Analysts had expected the unemployment rate to come in at 3.7 percent. This is the highest unemployment rate since July last year. The number of unemployed people in the U.S. rose by 276,000 to 6.3 million. Forecast for January 2019: 3.8 percent
#13: U.S. ISM Manufacturing PMI (02/01/2019 Friday 15:00 GMT)
In the U.S., the ISM Manufacturing PMI fell to the 54.1 level in December, the weakest ever since November 2016, from 59.3 in the previous month. Analysts had expected the reading to come in at 57.9. This is by far the largest monthly decline ever since October 2008. Growth in production, new orders, and employment slowed down sharply. Forecast for January 2019: 54.3