Last week, the greenback lost a little bit of ground as Fed Chair Jerome Powell remained patient and the possibility of a Brexit delay. Trade talks between China and the US are likely to extend beyond the March 1st deadline that was initially set and this news boosted sentiment. The Presidents of both the countries Xi and Trump might now meet late this month to sign the agreement. Fed Chair reiterated a dovish message of being patient on rate hikes. In the UK, Prime Minister May indicated the possibility of extending Brexit. The pound gained, enjoying the Labour Party’s shift related to a second referendum. Further, worries emerged because of the escalation between Pakistan and India.
Now, what about the upcoming week? It is a busy week and features ECB interest rate decision and the Non-Farm Payrolls report from the U.S. Here is an outlook on the key releases:
#1: Australia Building Approvals (03/04/2019 Monday 00:30 GMT)
In Australia, the building approvals unexpectedly fell by 8.4 percent on a month-over-month basis in December last year, missing analyst’s expectations for an increase of 1.8 percent. The reading for the previous month was revised upward to a decline of 9.8 percent. With this, the building approvals have fallen for three months in a row. Permits continued to decline for both private sector dwellings and houses. On a year-on-year basis, dwelling approvals plummeted by 22.5 percent. Forecast for January 2019: an increase of 1.5 percent is on the cards
#2: Australia RBA Rate Statement (03/05/2019 Tuesday 03:30 GMT)
The Reserve Bank of Australia releases the Rate Statement on the first Tuesday of every month, except January. It is one of the primary tools that the RBA’s Reserve Bank Board employs to communicate with the investors as regards the monetary policy. The Rate Statement provides the outcome of the members’ decision on setting interest rates. It also includes a commentary on the economic conditions that impacted their decision. More importantly, the Statement discusses the economic outlook and provides clues on future interest rate decisions.
#3: U.K. BoE Governor Carney Speaks (03/05/2019 Tuesday 15:35 GM)
Mark Carney, Governor of the Bank of England, is scheduled to testify in London before the House of Lords. Markets often turn volatile during his speeches. This is because traders make an attempt to understand the direction of interest rates.
#4: Australia RBA Governor Philip Lowe Speaks (03/05/2019 Tuesday 22:10 GMT)
Philip Low, Governor of the Reserve Bank of Australia, is scheduled to deliver a talk on “The Housing Market and the Economy” in Sydney at the Business Summit of Australian Financial Review. The audience is expected to ask questions. Markets often turn volatile during his speeches. This is because traders make an attempt to understand the direction of interest rates.
#5: Australia GDP (03/06/2019 Wednesday 00:30 GMT)
On a seasonally adjusted basis, Australia’s economy grew by 0.3 percent in the third quarter of last year, slowing down sharply from the 0.9 percent growth recorded in the prior period. The reading for the quarter also missed analysts’ expectations for a 0.6 percent growth. This was by far the weakest rate of expansion since the contraction in the September quarter of 2016. Growth slowed down mainly because of a sharp pull-back in non-residential construction and decline in private consumption. Forecast for the last quarter of 2018: a 0.6 percent growth is on the cards
#6: Canada Trade Balance (03/06/2019 Wednesday 13:30 GMT)
In Canada, the deficit in trade widened to C$2.06 billion in the month of November last year after the reading for the prior month was revised downward to represent a deficit of C$0.85 billion. Analysts had expected the trade deficit to come in at C$ 1.95 billion. This was the biggest trade gap ever since May. Exports declined 2.9 percent on a month-over-month basis because of lower crude oil sales. Imports fell by 0.5 percent.
#7: Canada BoC Rate Statement (03/06/2019 Wednesday 15:00 GMT)
The Bank of Canada releases the Rate Statement eight times in a year. The central bank uses it as a tool to communicate with investors as regards the monetary policy. The Statement provides the outcome of the members’ decision on setting interest rates and a commentary on the economic conditions that impacted their decision. More importantly, the Rate Statement provides an economic outlook and clues on future outcomes.
#8: Canada Overnight Rate (03/06/2019 Wednesday 15:00 GMT)
In the meeting held in January, the Bank of Canada decided to keep the benchmark Overnight Rate unchanged at the current level of 1.75 percent. This was widely expected by the analysts. This is the highest rate ever since December 2008. Policymakers noted that more interest rate increases will be required to maintain the inflation at a neutral range target of 2.0 percent and that the pace of the hikes will be determined by factors including developments in the oil and housing markets and global trade. The Bank and deposit rates were maintained at the current levels of 2.0 percent and 1.50 percent, respectively. Forecast for March: 1.75 percent
#9: Australia Retail Sales (03/07/2019 Thursday 00:30 GMT)
In Australia, retail trade declined by 0.4 percent on a month-over-month basis in December last year after the reading for the prior month was revised upward to represent a 0.5 percent increase. However, retail trade declined much more than analysts’ expectations for a 0.1 percent decline. Retail sales fell for the first time ever since July last year. Household goods and footwear and clothing led the falls. Sales dropped in department stores and other retailing outlets as well. However, sales at food retail outlets and restaurants, cafes, and takeaway food services increased. Forecast for January 2019: an increase of 0.2 percent is on the cards
#10: Euro Area ECB Main Refinancing Rate (03/07/2019 Thursday 12:45 GMT)
In the meeting held on January 24, the European Central Bank decided to hold the benchmark refinancing rate at the 0.0 percent level and noted that the key interest rate will remain at the record low levels through the summer of this year. Last month, the central bank had stopped its €2.6 trillion bond-buying scheme last month. However, the policymakers said that the cash from maturing bonds would be reinvested for a longer period of time. Forecast for March 2019: 0.0 percent
#11: Euro Area ECB Press Conference (03/07/2019 Thursday 13:30 GMT)
The President and Vice President of the European Central Bank attend a press conference about 45 minutes after the announcement of the Minimum Bid Rate. The press conference lasts for about an hour and has two parts. In the first part, a prepared statement will be read. The second session is for questions by the press. As the questions often call for unscripted answers, heavy market volatility can be expected.
#12: Canada Employment Change and Unemployment Rate (03/08/2019 Friday 13:30 GMT)
In Canada, employment rose by 66,800 in January after the reading for the prior month was revised to represent a decline of 1,300 jobs. Analysts had expected employment to increase by 8,000. New jobs were created in part-time and full-time sectors. The number of people employed in services-producing industries rose led by wholesale and retail sectors; professional, scientific and technical services; and public administration. On the other hand, the number of employees in goods-producing industries dropped led by the agriculture sector. In Canada, the unemployment rate rose to 5.8 percent in the month of January from 5.6 percent in the prior month. The reading for the month came above analysts’ expectations of 5.7 percent.
#13: U.S. Average Hourly Earnings (03/08/2019 Friday 13:30 GMT)
In the U.S., the average hourly earnings rose by 0.1 percent in January after increasing 0.4 percent in the previous month. However, the reading missed analysts’ expectations for an increase of 0.3 percent. This is the smallest rise in earnings ever since February last year. Forecast for February 2019: an increase of 0.2 percent is on the cards
#14: U.S. Non-farm Employment Change (03/08/2019 Friday 13:30 GMT)
In the U.S., the nonfarm payrolls increased by 304,000 in January after the reading for the prior month was revised downward to an increase of 222,000. The reading for the month beat analysts’ expectations of 165,000. Jobs were added in several industries, including construction, health care, leisure and hospitality, and warehousing and transportation. The partial shutdown of the federal government hardly impacted estimates of employment and earnings. Forecast for February 2019: 190,000 jobs are expected to be added
#15: U.S. Unemployment Rate (03/08/2019 Friday 13:30 GMT)
In the U.S., the unemployment rate increased to 4.0 percent in January from 3.9 percent in the prior month. The reading for the month came in slightly above analysts’ expectations of 3.9 percent. While the number of unemployed people in the U.S. increased by 241,000 to 6.54 million, employment declined by 251,000 to 156.69 million because of the 35-day partial shutdown of the government. Forecast for February 2019: 3.9 percent
#16: U.S. Fed Chair Jerome Powell Speaks (03/08/2019 15:00 GMT)
Jerome Powell, Federal Reserve Chair, is scheduled to speak about monetary policy normalization in California at the Stanford Institute for Economic Policy Research Economic Summit. Markets often turn volatile during his speeches. This is because traders make an attempt to understand the direction of interest rates.