Last week, the market remained nervy because of the Fed decision but ended with the U.S. dollar registering some gains. The Federal Reserve hiked the interest rates as analysts expected but left the forecasts for this year and the next three years unchanged. Further, the FOMC’s statement did not contain any mention about the “accommodative policy”. Initially, the greenback lost a little bit of ground on talks that the rate hike cycle is coming to an end. Fed Chair Jerome Powell further noted that there will not be any change in policy. He also confirmed that the U.S. economy is doing okay.
Elsewhere in the world, the conflict over Italian budget helped the populists come out victorious and sent this the euro down. As far as the Brexit negotiations are concerned, there was no sight of any breakthrough last week as the British government remained torn and the EU started preparations for a no-deal settlement.
Meanwhile, the U.S. seemed to be making headway with respect to finalizing a deal with Mexico, leaving Canada out. In New Zealand, the RBNZ decided to leave the interest rates unchanged but did not seem to share the business community’s pessimism.
#1: U.K. Manufacturing PMI (10/01/2018 Monday 08:30 GMT)
In the U.K., the IHS Markit/CIPS Manufacturing PMI dropped to the 52.8 level in August after the reading for the prior month was revised downward to the 53.8 level. The reading for August came in below analysts’ expectations of the 53.8 level and pointed to the weakest rate of growth of the manufacturing sector ever since July 2016. Output increased at the lowest rate in 17 months and growth of new orders eased to the lowest level during the current 25-month expansion period as overseas demand declined for the first time ever since April 2016. Additionally, the job growth almost stagnated and the optimism index dipped to its 22-month low level. Forecast for September 2018: 52.6
#2: U.S. ISM Manufacturing PMI (10/01/2018 Monday 14:00 GMT)
In the U.S., the Manufacturing PMI reported by the Institute for Supply Management rose to 61.3 in August from 58.1 in the prior month. The reading for the month beat analysts’ expectation of the 57.7 level. The August reading indicated the largest expansion of activities in factories ever since May 2004 as new orders, production, inventories, and increased. Meanwhile, the inflationary pressures remained low. However, manufacturers expressed concerns about tariff-related decisions. Forecast for September 2018: 60.1
#3: Australia RBA Rate Statement (10/02/2018 Tuesday 04:30 GMT)
The Reserve Bank of Australia releases the Rate Statement on the first Tuesday of every month, except January. It provides information about monetary policy to the investors. In addition to containing information about the outcome of members’ decision on setting interest rates, it provides a commentary on the economic conditions that impacted their decision. More importantly, it gives a projection of the nations’ economic outlook and provides clues on future interest rate decisions.
#4: Australia Cash Rate (10/02/2018 Tuesday 04:30 GMT)
In the meeting held in September, the Reserve Bank of Australia decided to keep the cash rate at its record low level of 1.5 percent as analysts’ expected, extending policy inaction period beyond the two-year mark, amid low wage growth and weak inflation. Forecast for October 2018: 1.5 percent
#5: U.S. Fed Chair Jerome Powell Speaks (10/02/2018 Tuesday 16:45 GMT)
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Jerome Powell, Fed Chair, is scheduled to speak on the topic “Outlook for employment and inflation” in Boston at the annual meeting of the National Association for Business Economics. Markets often remain volatile during his speeches. This is because traders look for clues on future interest rate decisions.
#6: U.K. Services PMI (10/03/2018 Wednesday 08:30 GMT)
In the U.K., the IHS Markit/CIPS Services PMI rose to the 54.3 level in August from 53.5 in the previous month. The reading for August beat analysts’ expectations of the 53.9 level. New work and business activity rose faster but evidence suggested that business-to-business spending remained muted because of Brexit uncertainty, especially in the case of large-scale projects. Job addition was at the strongest level ever since February as a result of efforts put in to boost capacity and complete increased workloads. Forecast for September 2018: 54.0
#7: U.S. ADP Non-Farm Employment Change (10/03/2018 Wednesday 12:15 GMT)
In the U.S., private businesses hired 163,000 workers in August after the figure for the previous month was revised downward to 217,000. The reading for August missed analysts’ expectations of 190,000. This is the lowest number of job additions in ten months. The service-providing sector added 139,000 jobs, while the goods-producing sector hired 24,000 workers. Midsized companies hired the most number of workers, followed by the large and small businesses. Forecast for September 2018: 187,000
#8: U.S. ISM Non-Manufacturing PMI (10/03/2018 Wednesday 14:00 GMT)
In the U.S., the Non-Manufacturing PMI reported by the Institute for Supply Management jumped to the 58.5 level in August from 55.7 in the previous month. The non-manufacturing PMI reading for August beat analysts’ expectations of 56.8 as 16 out of 17 industries reported growth. Forecast for September 2018: 58.1
#9: U.S. Fed Chair Jerome Powell Speaks (10/03/2018 Wednesday 16:00 GMT)
Jerome Powell, Federal Reserve Chair, is scheduled to speak in Washington DC at The Atlantic Festival. The markets often remain volatile during his speeches. This is because traders look for interest rate clues.
#10: Australia Retail Sales (10/05/2018 Friday 01:30 GMT)
In Australia, retail trade remained unchanged in July, following the 0.4 percent increase in the prior month. The reading for July missed analysts’ expectations for a 0.3 percent rise. Household goods retailing fell and was followed by department stores sales and clothing, personal accessory, and footwear retailing. Other retailers and cafes, takeaway food services, and restaurants reported higher sales. Forecast for August 2018: an increase of 0.3 percent in retail trade is expected
#11: Canada Employment Change (10/05/2018 Friday 12:30 GMT)
Canada cut 51,600 jobs in August after adding 54,100 jobs in July. Analysts had expected that 5,000 jobs will be added. While part-time jobs fell by 92,000, full-time jobs rose by 40,400. Employment rose in Alberta and Manitoba but declined in Ontario. Employment remained little changed in other provinces.
#12: Canada Trade Balance (10/05/2018 Friday 12:30 GMT)
Canada’s trade deficit decreased to C$0.11 billion in July after the deficit for the prior month was revised upward to C$0.74 billion. The trade deficit for August came in well below analysts’ expectations for a deficit of C$1.13 billion. This was the lowest trade deficit after surplus was reported in December 2016. Exports rose by 0.8 percent to the all-time high level mainly because of higher crude prices. Imports declined 0.4 percent because of fewer aircraft imports.
#13: Canada Unemployment Rate (10/05/2018 Friday 12:30 GMT)
In Canada, the unemployment rate increased to the 6.0 percent level in August from 5.8 percent in the prior month. The reading for August came in above analysts’ expectations of 5.9 percent. Employment decreased after two months of increases.
#14: U.S. Average Hourly Earnings (10/05/2018 Friday 12:30 GMT)
In the U.S., the average hourly earnings private nonfarm employees rose by 0.4 percent in August after the 0.3 percent gain reported in the previous month. Analysts had expected a gain of 0.2 percent. Forecast for September 2018: an increase of 0.3 percent is expected
#15: Non-Farm Employment Change (10/05/2018 Friday 12:30 GMT)
In the U.S., the nonfarm payrolls increased 201,000 in August after the reading for the prior month was revised downward to an increase of 147,000. Analysts had expected nonfarm payrolls to increase by 191,000. Employment rose in business and professional services, health care, transportation and warehousing, wholesale trade, and mining. Forecast for September 2018: an increase of 185,000 is on the cards
#16: U.S. Unemployment Rate (10/05/2018 Friday 12:30 GMT)
In the U.S., the unemployment rate remained unchanged at the 3.9 percent level in August. However, it was above analysts’ expectations of the 3.8 percent level. The jobless rate stayed close to the 18-year low in May as the number of unemployed people in the country dropped by 46,000 to 6.23 million and employment declined by 423,000 to 155.54 million. Forecast for September 2018: 3.8 percent