Last week, the U.S. dollar regained some of the lost ground towards the close of the first quarter of this year. The GDP for the fourth quarter of last year was upgraded to 2.9 percent when the final estimate was announced. The reading came in better than analysts had expected. The favorite inflation measure of the Fed, the Core PCE, rose to 1.6 percent on a year-on-year basis, in line with analysts’ forecasts.
Trade tensions eased out as the U.S. and China gave positive indications towards averting a trade war. This helped the U.S. dollar stage a recovery despite a mixed reaction from the stock market and a decline in bonds. End-of-quarter flows also contributed to the positivity. Will the greenback’s comeback last or is it just a correction?
U.K.’s GDP remained subdued in the final estimate Canada’s GDP disappointed because of an outright contraction in the month of January. In Germany, inflation came in below expectation and weighed down the euro.
The first week of the second quarter features the Non-Farm Payrolls. Here are other top-tier events as well. Here is an outlook on the events for the upcoming week:
#1: U.S. ISM Manufacturing PMI (04/02/2018 Monday 14:00 GMT)
The Manufacturing PMI reported by Institute for Supply Management in the U.S. rose to 60.8 in the month of February from 59.1 in the previous month. Analysts had expected the manufacturing PMI to come in at 58.7 for the month. This is the highest level ever since May 2004. Forecast for March 2018: 54.8
#2: Reserve Bank of Australia Rate Statement (04/03/2018 Tuesday 04:30 GMT)
The Reserve Bank of Australia releases the rate statement on the first Tuesday of every month except January. Traders look forward to the release of this statement as it offers clues on the direction of interest rates in the coming months.
The Reserve Bank of Australia’s Board uses the statement as a tool to communicate with investors as regards the monetary policy. In addition to containing the outcome of the members’ decision on setting the interest rates, it provides a commentary on the economic situation in the country that impacted their decision. More importantly, it provides information on the economic outlook.
#3: Australia Cash Rate (04/03/2018 Tuesday 04:30 GMT)
The Reserve Bank of Australia decided to leave the interest rate unchanged at the record low level of 1.5 percent during the meeting held in March. This was widely expected by the analysts. Policymakers said that the economy is expected to grow faster this year than it did last year and that the household spending continues to remain uncertain. Forecast for March: 1.50 percent
#4: U.K. Manufacturing PMI (04/03/2018 Tuesday 08:30 GMT)
In the U.K., the IHS Markit/CIPS manufacturing PMI slipped down to the 55.2 level in February of 2018 from the 55.3 level touched in January. However, the reading for the month of February came in above the analysts’ expectation of 55.0. The reading indicated that the expansion in the manufacturing sector was at the lowest level in eight months. Production increased at a slow pace for 11 months, but deceleration was seen in the investment goods, intermediate, and consumer sectors. However, new orders increased because of strong domestic demand. Job creation in February was the second-highest since mid-2014. In the meanwhile, price pressures remained higher because of increase in prices of commodities and raw materials. Additionally, manufacturers’ outlook continued to remain positive. Forecast for March: 54.8
#5: Australia Retail Sales (04/04/2018 Wednesday 01:30 GMT)
In Australia, retail trade increased 0.1 percent on a month-on-month basis in January, following the 0.5 percent fall reported in the prior month. Analysts had expected retail trade to grow by 0.4 percent. Sales were higher in the household goods; cafes, restaurants and takeaway food; and other retailing segments. Sales were flat in food retailing segment. Sales fell in clothing and footwear and personal accessories segments. Forecast for March: an increase of 0.3 percent
#6: U.K. Construction PMI (04/04/2018 Wednesday 08:30 GMT)
In the U.K., the IHS Markit/CIPS Construction PMI rose to 51.4 in the month of February from 50.2 in the previous month. The reading for January was the lowest in four months. The reading came in above analysts’ expectation of 50.7 even though the PMI was lower compared to the average of 52.3 for 2017. Business activity increased marginally, driven by commercial work. It increased at the fastest rate ever since May. However, new work dropped for the second month. Client confidence also remained fragile because of political uncertainty and non-availability of tender opportunities for replacing completed infrastructure projects. Further, input cost inflation continued to remain strong and was driven by higher raw material prices. Business confidence has moderated since January. It was at its lowest levels in the last five years because of uncertainty related to Brexit. Forecast for March 2018: 51.2
#7: U.S. ADP Non-Farm Employment Change (04/04 Wednesday 12:15 GMT)
In the U.S., private businesses hired 235,000 workers in the month of February 2018 after the figure for the previous month was revised upward to 244,000. The reading for February came in way above analysts’ expectation of 195,000 job addition. As many as 198,000 workers were hired in the service-providing sector driven by leisure and hospitality; trade, transportation, and utilities; education and health; professional and business; financial; and other services sectors. While the information sector lost about 1,000 jobs, the goods-producing sector gained 37,000 jobs supported by manufacturing, construction, and natural resources and mining sectors. Midsized companies hired the most number of workers, followed by large and small companies. Forecast for March 2018: 206,000 jobs expected to be added
#8: U.S. ISM Non-Manufacturing PMI (04/04/2018 Wednesday 14:00 GMT)
In the U.S., the ISM Non-Manufacturing PMI edged down to the 59.5 level in February from the more than the 12-year high level of 59.9 recorded in January. The reading for February beat analysts’ expectation that the index would hit the 59.0 level in February. Employment slowed down, but new orders and production grew faster. Price pressures eased and the economic outlook and business conditions remained positive. Forecast for March 2018: 59.2
#9: U.S. Crude Oil Inventories (04/04/2018 Wednesday 14:30 GMT)
In the U.S., crude oil stocks unexpectedly increased by 1.643 million barrels during the week that ended on March 23, 2018, following the 2.622 million barrels decline in the prior period. Analysts had expected that the crude oil stocks would decline by 0.287 million barrels.
Gasoline stocks, on the other hand, fell by 3.472 million barrels after the stocks dropped by 1.693 million barrels in the prior week. Analysts had expected that the gasoline stocks would drop by 1.954 million barrels.
#10: Australia Trade Balance (04/05/2018 Thursday 01:30 GMT)
Australia registered A$1.06 billion trade surplus in the month of January, reversing the A$1.11 billion trade deficit reported in the previous month. The trade surplus for January came in way above analysts’ estimate of A$0.3 billion. This is by far the largest trade surplus ever since September 2017. Exports jumped 4.0 percent on a month-on-month basis to A$33.92 billion and imports dropped by 2.0 percent to A$32.87 billion. Forecast for February 2018: a surplus of A$0.72 billion
#11: U.K. Services PMI (04/05/2018 Thursday 08:30 GMT)
In the U.K., the IHS Markit/CIPS Services PMI came in at 54.5 in the month of February, higher than analysts’ expectation of 53.3, from 53.0 in the prior month. The reading for February indicated that the pace of expansion was the highest since October last year because of an increase in the incoming new business (it increased the most ever since May last year) and employment which grew at the fastest pace in as many as five months. As far as the price is concerned, input cost inflation slowed down to the lowest level since August 2016, and rates charged by companies in the service sector registered the weakest rate increase in six months. Further, the business confidence as far as the year-ahead is concerned eased from January. Forecast for March 2018: 54.2
#12: Canada Trade Balance (04/05/2018 Thursday 12:30 GMT)
Canada’s trade deficit narrowed to C$1.9 billion in the month of January from the C$3.1 billion reported in December. Imports dropped by 4.3 percent on a month-over-month basis because of lower industrial machinery and equipment and parts purchases. Exports declined by 2.1 percent due to lower light trucks and passenger cars sales. Forecast for February 2018: a deficit of C$2.1 billion
#13: Canada Employment Change (04/06/2018 Friday 12:30 GMT)
In Canada, employment rose by 15,000 in February from that for the prior month, but missed analysts’ expectation for 20,000 job additions. Part-time work increased, but full-time jobs declined. Employment grew mainly in the social assistance, health care, transportation and warehousing, educational service, public administration, and other services sectors. However, employment fell in sectors such as wholesale and retail and manufacturing. The number of public sector workers increased, but the number of private sector workers remained the same. The number of self-employed people declined. Forecast for March 2018: an increase of 20,300
#14: Canada Unemployment Rate (04/06/2018 Friday 12:30 GMT)
Canada’s unemployment rate dropped to 5.8 percent in the month of February from 5.9 percent in the previous month. However, the reading came in below analysts’ expectation of 5.9 percent. Forecast for March 2018: 5.8 percent
#15: U.S. Average Hourly Earnings (04/06/2018 Friday 12:30 GMT)
In the U.S., the average hourly earnings for all of the employees in the private nonfarm payrolls increased by 0.1 percent to $26.75 in the month of February, following the 0.3 percent gain in the previous month. The reading for February came in below analysts’ expectation for an increase of 0.2 percent. On a year-on-year basis, the average hourly earnings rose by 2.6 percent. Forecast for March 2018: an increase of 0.3 percent
#16: U.S. Non-Farm Employment Change (04/06/2018 Friday 12:30 GMT)
In the U.S., nonfarm payrolls rose by 313,000 in the month of February after the reading for the prior month was revised upward to 239,000. The employment figure for February beat analysts’ expectations for an increase of 200,000 jobs. This is the biggest nonfarm payrolls increase since July 2016. Employment rose in retail trade, construction, business and professional services, manufacturing, mining, and financial activities. Forecast for March 2018: an increase of 190,000 jobs
#17: U.S. Unemployment Rate (04/06/2018 Friday 12:30 GMT)
In the U.S., the unemployment rate came in at 4.1 percent in the month of February. It was unchanged from the 17-year low registered in the prior month and slightly above analysts’ expectation of 4.0 percent. The number of unemployed people in the U.S. increased by 22,000 to 6.71 million and the employment rose by 785,000 to 155.22 million. The labor force participation rate increased 0.3 percentage points to 63.0 percent. This is the highest increase in five months. Forecast for March 2018: 4.0 percent
#18: U.K. Bank of England Governor Mark Carney Speaks (04/06/2017 Friday 15:15 GMT)
Mark Carney, the Governor of the Bank of England, is scheduled to speak in Amsterdam at the International Climate Risk Conference for Supervisors. Volatility can be expected during his speeches. This is because traders make an attempt to understand the direction of interest rate.
#19: U.S. Fed Chair Jerome Powell Speaks (04/06/2018 Friday 17:30 GMT)
Jerome Powell, Federal Reserve Chair, is scheduled to speak about the economic outlook at the Economic Club of Chicago. The audience is expected to ask questions. Markets often remain volatile during his speeches.