Eventually, the US dollar emerged as the winner by the end of last week. The question now is whether this indicates the beginning of a trend. The US employment market disappointed with the Nonfarm Payrolls data showing a creation of just 98,000 jobs in March. Economists had expected that there will be a gain of 174,000 jobs. Weather issues might have had a role to play in the puzzling data for the month. The big snowstorm that hit the country during the middle of the month did hinder activity. Therefore, it may be presumed that the weakness in job creation is a temporary incident. Meanwhile, wages continued to increase with the average hourly earnings going up by 2.7 percent on a yearly basis. One of the other bright spot was the 0.2 decline in the unemployment rate. This signaled that the mixed data is not bad after all.
Some of the key activities scheduled for the coming week include speech by Janet Yellen, rate decision in Canada, US inflation data, Australian employment data and US retail sales data. Here is an outlook on the releases that are expected to induce significant market movements:
#1: Federal Reserve Chairperson Janet Yellen Speaks (04/10/2017 Monday 21:00 GMT)
The chairperson of the Federal Reserve Janet Yellen is scheduled to speak at the University of Michigan and answer questions from the audience. Markets often remain volatile during her speeches. This is because traders try to decipher clues on the direction of the interest rates in the future.
#2: U.K. CPI (04/11/2017 Tuesday 8:30 GMT)
In the United Kingdom, the consumer prices rose by 2.3 percent on year-on-year basis in February, following the 1.8 percent increase recorded in January. The reading for February beat market expectations for an increase in consumer prices by 2.1 percent. This is by far the highest rate of increase in inflation since September of 2013. The consumer prices were boosted by rising fuel prices and food costs, which increased for the first time in as many as 34 months. It is expected that the CPI will increase by 2.2 percent in the month of March.
#3: U.K. Average Earnings Index (04/12/2017 Wednesday 8:30 GMT)
The average earnings report released last month showed that that the regular pay, which excludes bonuses, rose by 0.8 percent in real terms during the three months to January 2017 from the same three month period in 2016. This is by far the lowest growth rate recorded since the three months to November 2014, which came in at 0.7 percent. In nominal terms, or on price inflation adjusted basis, total pay rose by 2.2 percent during the three-month period to January 2017 from the three-month to January 2016.
Regular pay rose by 2.3 percent. The average regular pay, without bonuses, was £477 per week in January 2017 compared to the average pay of £468 per week in January 2016. Including bonuses, the average total pay for the U.K. employees was £507 per week compared to £499 per week in January 2016.
Average earnings per week of U.K. employees is expected to increase by 2.1 percent during the three months to February 2017.
#4: Bank of Canada Monetary Policy Report (04/12/2017 Wednesday 14:00 GMT)
The governor of the Bank of Canada holds a press conference for discussing the contents of the monetary policy report approximately 45 minutes after the release. The report provides traders with valuable insight into the country’s economic situation and prevailing inflation conditions, which are the key factors in determining the direction of the monetary policy decisions in the future.
#5: Bank of Canada Rate Statement (04/12/2017 Wednesday 14:00 GMT)
This is one of the primary tools that the Bank of Canada makes use of for communicating with investors as regards the monetary policy. The rate statement provides information as regards the outcome of the monetary policy committee’s decision and commentary on the prevailing economic conditions that influenced the members’ decision. More importantly, the statement discusses the country’s economic outlook and offers clues on future decisions.
#6: Bank of Canada Overnight Rate (04/12/2017 Wednesday 14:00 GMT)
The Canadian central bank maintained the overnight rate at 0.5 percent during the monetary policy committee meeting held on March 1, 2017. This was in line with the market expectation. Additionally, the bank deposit rates were kept on hold at 0.75 percent and 0.25 percent, respectively. Policymakers noted that the growth recorded in the fourth quarter of last year might have been a little stronger than expected based on the recent housing and consumption indicators, but exports sector continued to face competitiveness challenges. The Bank of Canada is expected to leave the overnight rate at the same level of 0.5 percent during the central bank’s monetary policy committee meeting scheduled for this week.
#7: U.S. Crude Oil Inventories (04/12/2017 Wednesday 14:30 GMT)
In the United States of America, crude oil stocks increased by 1.566 million barrels during the week that ended on March 31, 2017 after recording an increase of 0.867 million barrels increase in the previous reporting period. The reading came in above the market expectations for a decline in the crude oil stocks by 0.435 million barrels. Gasoline stocks dropped by 0.618 million against expectations that it will decline by 1.422 million barrels.
#8: Bank of Canada Press Conference (04/12/2017 Wednesday 15:15 GMT)
Held on a quarterly basis by the Canadian central bank, after releasing the BoC’s Monetary Policy Report, the press conference has two parts. The first part is reading of a prepared statement. The second part of the press conference is addressing press questions. As the questions frequently lead to unscripted answers, markets experience heavy volatility. The press conference is a tool employed by the BoC to communicate with the investor community as regards the monetary policy. In addition to providing detailed information as regards the factors that influenced the most recent decision on interest rates, it offers input on the country’s overall economic outlook and inflation. More importantly, traders get clues on the direction of monetary policy decisions in the future.
#9: Australia Employment Change and Unemployment Rate (04/13/2017 Thursday 1:30 GMT)
In Australia, the unemployment rate rose to a 14-month high of 5.9 percent in February, an increase of 0.2 percent from the prior month, according to the data released by the Australian Bureau of Statistics last month. On a seasonally-adjusted basis, the number of jobs decreased by 6,400 in February from the previous month. While full-time employment rose by 27,100, part-time employment dropped by 33,500. Compared to February 2016, on a seasonally adjusted basis, full-time employment declined by 23,200 , but part-time employment increased by 127,800. Market expects Australia to add 20,300 jobs in March and the unemployment rate to remain at the 5.9 percent level.
#10: China Trade Balance (04/13/2017 Thursday 2:00 GMT)
In February, China reported trade deficit even though exports surged. Beijing posted a trade deficit of 60.4 billion yuan following the 354.5 billion yuan surplus reported in the previous month. In yuan terms, exports surged an annualized 44.7 percent and imports rose by 4.2 percent on year-over-year basis. In dollar terms, the trade deficit was $9.15 billion compared to the surplus of $51.4 billion in the previous month. In January, China’s trade surplus exceeded analysts’ expectations. The data released ahead of the Lunar New Year holidays often distorts the underlying trend. In March, China is expected to report a trade surplus of 76 billion yuan.
#11: Canada Manufacturing Sales (04/13/2017 Thursday 12:30 GMT)
Manufacturing sales in Canada rose by 0.6 percent in January against the market expectation for a decline of 0.2 percent. Manufacturing sales increased for the third successive month, following the revised 2.1 percent gain reported for December 2016. Originally, the report for December showed an increase of 2.3 percent.
Sales rose 2.7 percent with a 1.2 percent increase in sales volumes over the last 12 months. New orders rose 4.6 percent, inventories increased 1.1 percent and food manufacturing climbed 0.7 percent, but shipments in the transport sector dropped 2.9 percent. Excluding motor vehicles, sales increased 0.3 percent on month in January.
#12: U.S. PPI (04/13/2017 Thursday 12:30 GMT)
Producer prices in the U.S. advanced 0.3 percent on month-on-month basis in February after posting a 0.6 percent increase in the previous month. The reading for February, however, beat market consensus for an increase of 0.1 percent. Prices for final demand services and that for final demand goods rose 0.4 percent and 0.3 percent, respectively. Core PPI, which excludes foods, energy, and trade services, increased 0.3 percent in February. This is the largest increase for core PPI since April 2016. On year-on-year basis, producer prices jumped 2.2 percent, the largest increase since March 2012. This reading came in above market consensus for an increase of 2 percent.
#13: U.S. Unemployment Claims (04/13/2017 Thursday 12:30 GMT)
The number of American people filing for jobless benefits dropped by 25,000 to 234,000 during the week that ended on April 1, 2017 from that for the previous period, which was revised upward to 261,000. The reading came in well below the market expectations for a decline of 251,000 applicants. This is the lowest figure in as many as five weeks and the largest drop since April 2015. The 4-week moving average number of claims, which removes week-to-week volatility, declined by 4,500 thousand to 250,000. Unemployment claims in the U.S. are expected to touch the 242,000 level this week.
#14: U.S. Preliminary UoM Consumer Sentiment (04/13/2017 Thursday 14:00 GMT)
In the U.S., consumer confidence rose to a 16-year high in the month of March as Americans expressed optimism about the current state of the country’s economy and their finances. However, respondents remained divided along party lines as regards the outlook. The preliminary reading of the index which measures the sentiment rose to 97.6 in March from 96.3 in February. Economists’ expectation was that the index would the 97.1 mark. Respondents reported net gains in incomes and wealth. However, the Republicans were more optimistic compared to Democrats. Further, the survey showed that people were more upbeat as regards the labor market. However, they were uncertain about the future growth under the new administration. In April, the consumer sentiment index is expected to come in at 97.1.
#15: U.S. CPI/Core CPI (04/14/2017 Friday 12:30 GMT)
According to a report recently published by the Division of Consumer Prices and Price Indexes under the Bureau of Labor Statistics in the U.S., the Consumer Price Index for All Urban Consumers edged up by 0.1 percent in on a seasonally adjusted basis February after rising 0.6 percent in the previous month. The all items index, which represents the reading prior to seasonal adjustments, jumped by 2.7 percent. On a seasonally adjusted basis, the increase in February was the smallest one-month rise since July 2016. The core CPI, which excludes energy and food, rose by 0.2 percent in February, following a 0.3 percent increase in the prior month. Core CPI rose 2.2 percent from a year ago. While CPI is expected to remain unchanged in March, core CPI is expected to rise by 0.2 percent in March.
#16: U.S. Retail Sales/Core Retail Sales (04/14/2017 Friday 12:30 GMT)
In the United States of America, retail sales increased by 0.1 percent on month-over-month basis in February 2017, following the upwardly revised reading of 0.6 percent increase in January. The reading for February, the smallest increase since August, was in line with the market expectations. Retail sales increase slowed down because of lower purchases at electronics and appliance stores and motor vehicle and parts dealers. On the other hand, sales for building material, garden equipment and non-store retailers rose.
The core retail sales, which excludes automobiles, building materials, gasoline and food services, increased by 0.1 percent after the reading for January was revised upward to an increase of 0.8 percent. Retail sales and core retail sales are expected to rise by 0.1 percent and 0.2 percent in March.