The U.S. dollar was able to hold its gains as the third quarter of this year came to a close. In Germany, the election results showed that it will be a fractured parliament this time. This drove the euro down. Further, the escalation in exchange of words as regards North Korea contributed to driving negative sentiment among investors and this resulted in boosting the safe-haven yen. Towards the close of last week, the U.S. dollar was able to gain further ground on hopes that a massive reform in taxes is on the anvil, but failed to hold on to these gains.
Some of the key releases scheduled for the first week of the final quarter include the all-important Non-Farm Payrolls from the U.S., rate decision from Australia, and the jobs report from Canada. Here is an outlook on these data releases for the upcoming week:
#1: U.K. Prime Minister Theresa May Speaks (10/01/2017 Sunday 9:00 GMT)
Theresa May, Prime Minister of the United Kingdom, is scheduled to speak on the Brexit strategy at a BBC Television interview. She often speaks on varied subjects and the markets remain volatile during these times.
#2: U.K. Manufacturing PMI (10/02/2017 Monday 8:30 GMT)
On a seasonally adjusted basis, the IHS Markit/CIPS Manufacturing PMI came in at 56.9 in August, a four-month high. The reading for the previous month was revised upward to the 55.3 level. The reading for August was much above analysts’ expectations of the 55.0 level. The production growth, the steepest in as many as seven months, was driven by new work receipts, and employment growth, which came in very close to a three-year high. In August, business optimism also rose to a high in as many as three months. As regards the price, the cost of inputs increased for the very first time in as many as seven months. Forecast for September: 56.3
#3: U.S. ISM Manufacturing PMI (10/02/2017 Monday 14:00 GMT)
In the recent months, the ISM Manufacturing PMI which provides the first hint as regards the Non-Farm Payrolls report has shown upbeat readings. The reading for August came in at 58.8, reflecting strong growth, from 56.3 in the previous month. The figure for the month beat analysts’ expectations of 56.5. This is the highest level for the index since April 2011 and the growth was boosted by an increase in production, inventories, and employment. Forecast for September: 57.9
#4: Australia Cash Rate (10/03/2017 Tuesday 3:30 GMT)
Australia’s central bank is firmly in the “neutral” as the Governor Phillip Lowe reiterated recently in a public appearance that the interest rates are likely to remain unchanged for the time being. The Reserve Bank of Australia (RBA) is not happy about the exchange rate of the currency but the central bank was not at all aggressive in its remarks. During the meeting held on September 5, the RBA decided to leave the cash rate steady at the record low level of 1.5 percent. This was widely expected by the market. The policymakers noted that the economy is will only pick up gradually through the coming year supported by an improvement in the outlook for non-mining investment. Further, it is expected that inflation will rise with the strengthening of the economy.
#5: Australia Rate Statement (10/03/2017 Tuesday 3:30 GMT)
The Reserve Bank of Australia releases the rate statement on the first Tuesday of every month except January. The RBA uses this as a tool to communicate to the investors as regards the monetary policy. In addition to the outcome of the members’ decision, it provides a commentary on the prevailing economic conditions that impacted their decision. More importantly, the statement provides an economic outlook and clues on the direction of future decisions.
#6: U.K. Construction PMI (10/03/2017 Tuesday 8:30 GMT)
In the U.K., the IHS Markit/CIPS Construction PMI fell to the 51.1 level in August from 51.9 in the previous month. The reading came in well below analysts’ expectation of the 52.0 level for the index. August’s figure is the lowest since the same month last year. The index was driven down by a marked decline in commercial work. However, the house building sector saw a robust increase in activity. Additionally, the new business volumes dropped for the second month, employment increased the least since July last year, and the supply chain pressures continued to persist in spite of the stagnation in input buying. However, the cost pressures eased a little bit. Forecast for September: 51.2
#7: U.K. Services PMI (10/04/2017 Wednesday 8:30 GMT)
In the U.K., the Services PMI reported by the IHS Markit/CIPS dropped to the 53.2 level in August from 53.8 in the previous month. This was below the analysts’ expectation of the 53.5 level for the index. The reading for August points towards the slowest expansion in this sector since September last year. Business activity and new work orders eased and were notably lower compared to that in the first half of this year. This could be attributed to lower client demand and uncertainty as regards the country’s economic outlook. Additionally, the input price increase was at its peak since February because of rising staff costs, import prices, and fuel bills. Meanwhile, the number of jobs added was the highest in as many as 19 months. Further, business confidence index came in at the three-month high level even though the Brexit-related uncertainty impacted confidence. Forecast for September: 53.3
#8: U.S. ADP Non-farm Employment Change (10/04/2017 Wednesday 12:15 GMT)
In the U.S., private businesses added 237,000 jobs in August. This is the highest in the last five months. The reading for August beat analysts’ expectation of 183,000 job additions. ADP is the biggest payrolls software provider in the US and their report often moves the markets, even if the same readings are not reflected in the official employment report scheduled to be released on Friday in the upcoming week. Forecast for September: 151,000 job additions
#9: U.S. ISM Non-manufacturing PMI (10/04/2017 Wednesday 14:00 GMT)
In the U.S., the ISM Non-Manufacturing PMI for August rose to 55.3 from 53.9 in the previous month. The market had expected the index to come in at the 55.4 level. Employment, production, and new orders saw growth, but price pressures increased and inventories slowed down. A majority of service providers opined that they are optimistic about the business conditions in the future. Forecast for September: 55.5
#10: U.S. Crude Oil Inventories (10/04/2017 Wednesday 14:30 GMT)
Crude oil stocks in the U.S. dropped by 1.846 million barrels during the week that ended on September 22 after the inventories increased by 4.591 million barrels in the prior period. Stocks declined for the first time in four weeks. Analysts had expected stocks to increase by 3.422 million barrels. Gasoline inventories increased by 1.107 million barrels after the stocks slumped by 2.125 million barrels in the prior week. Gasoline stocks also declined for the first time in four weeks.
#11: European Central Bank President Mario Draghi Speaks (10/04/2017 Wednesday 15:15 GMT)
President of the European Central Bank Mario Draghi is scheduled to deliver opening remarks in Frankfurt at the ECB Visitor Center inauguration. Volatility in the markets can be expected during his speeches because traders make an attempt to decipher clues on the direction of interest rates in the future.
#12: U.S. Fed Chair Janet Yellen Speaks (10/04/2017 Wednesday 19:15 GMT)
Fed Chair Janet Yellen is scheduled to deliver the opening speech at the community banking conference that is hosted by the St. Louis Federal Reserve Bank. Markets often turn vo9latile during her speeches as traders look for interest rate clues.
#13: Australia Retail Sales (10/05/2017 Thursday 00:30 GMT)
High household debt and low wages impacted retail sales in Australia in July. On a seasonally adjusted basis, retail sales remained stagnant after recording a growth of 0.2 percent in June. Retail sales fell in New South Wales, Sothern Australia, the Northern Territory, and Tasmania. Forecast for August: 0.3 percent increase
#14: Australia Trade Balance (10/05/2017 Thursday 00:30 GMT)
In Australia, trade surplus unexpectedly narrowed by as much as 48 percent to A$0.46 billion in July after the figure for June was revised upward to A$ 0.89 billion. The market estimated a surplus of A$0.88 billion. This was the smallest surplus in the last three months. Exports fell by 2.0 percent to A$31.07 billion and imports dropped by 1.0 percent to A$30.61 billion. Forecast for August: Surplus of A$0.87 billion
#15: Canada Trade Balance (10/05/2017 Thursday 12:30 GMT)
Canada’s trade balance was a deficit of C$3.0 billion in July after the figure for the prior month was revised upward to a deficit of C$3.8 billion. The reading for July was better than analysts’ expectation of a deficit of C$ 3.1 billion. Exports fell by 4.9 percent to C$44.1 billion, while imports declined by 6.0 percent to C$47.2 billion impacted by widespread price declines following Canadian dollar’s gains against US dollar.
#16: U.S. Unemployment Claims (10/05/2017 Thursday 12:30 GMT)
The number of American people filing for jobless benefits rose by 12,000 to 272,000 during the week that ended on September 23. The reading came in slightly above analysts’ expectation of 270,000 claims. The reading for the previous week was revised upward by 1,000 to 260,000 claims. The claims for jobless benefits have remained above the 260,000 level for four consecutive weeks now. This could be attributed to the disruption caused by the Hurricanes Harvey and Irma in Georgia, Florida, and Texas. The four-week moving average number of claims, which eliminates weekly volatility, rose by 9,000 to 277,750 from the unrevised reading of 268,750 for the previous week. Forecast for the next period: 270,000
#17: Canada Employment Change/Unemployment Rate (10/06/2017 Friday 12:30 GMT)
In Canada, employment increased by 22,200 in August, following a rise of 10,900 in the previous month. The reading came in above analysts’ expectation of 19,000 job additions. Part-time jobs jumped by 110,400 but full-time jobs dropped by 88,100.
In Canada, the unemployment rate declined to 6.2 percent in August from 6.3 percent in the previous month. The reading beat analysts’ expectation of 6.3 percent.
#18: U.S. Average Hourly Earnings (10/06/2017 Friday 12:30 GMT)
In the U.S., the average hourly earnings of workers rose by 0.1 percent in August from July. The reading for the month came in below analysts’ expectation of 0.2 percent increase. This is the lowest increase since March this year. Forecast for September: 0.3 percent increase
#19: U.S. Non-Farm Employment Change/Unemployment Rate (10/06/2017 Friday 12:30 GMT)
The jobs report for August was slightly disappointing as only 156,000 jobs were added, less than the analysts’ expectation of 180,000 job additions. The figure for the prior month was revised downward to an addition of 189,000 jobs. Forecast for September: addition of only 88,000 jobs because of the impact of the hurricanes
Meanwhile, the unemployment rate increased to 4.4 percent and it is expected that it will remain at the same level in September too. In the previous month, the unemployment rate stood at 4.3 percent. The reading also came in above analysts’ expectation of 4.3 percent.
Wage growth and jobs gain are equally important. However, the Fed is planning to raise the interest rates in December. If the economic data does not support an increase, policymakers might change their decision.