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Overview of the main economical events of the current day - 23/10/2013
Dollar Slumped after Weak Non-Farm Payrolls
The US dollar slumped on Tuesday Vs all major currencies after Non-Farm Payrolls for September turned out much worse than forecasted despite the fact that unemployment rate dropped. According to the statistics the US economic growth is not steady enough. Weak labour market data will not allow the Fed to start QE tapering at the nearest meetings.
According to the Labour Department Non-Farm Payrolls grew in September only by 148 thousand while growth by 180 thousand was forecasted. Unemployment rate decreased to 7.2% while the reading was forecasted to stay unchanged at 7.3% since August. Despite the revision of August Non-Farm Payrolls upwards – from 169 thousand to 193 thousand – general revision for two months amounted only to +9 thousand of new jobs. Average Hourly Earnings last month also grew less than expected – by 0.1% - while its growth by 0.2% was forecasted.
The US Unemployment Rate in September turned out lower than forecasted but Non-Farm Payrolls grew less than expected. The released data continued the trend of three recent months when unemployment rate is falling but Non-Farm Payrolls turn out lower than forecasted. Unemployment rate decrease is the result of a stronger growth of Non-Farm Payrolls in the first half of the year and also reflects work force retirement.
In the nearest months employment rate decrease can be expected due to a negative influence of government shutdown and worsening market conditions already marked in September, which will be in favor of keeping the US economic stimulus program. The Reuters spread the results of the poll of Primary Dealers; and 9 of 15 expect the start of QE tapering in March, 2014. JPMorgan and Goldman Sachs also moved the terms of QE3 tapering to the next spring. HSBC analysts estimate the chances of QE3 reduction in December at 50%.
The euro updated its annual height Vs the dollar on Tuesday and reached the highest level for almost two years. Swiss franc rose to 19-month height to the dollar, and the pound – to almost 3-week. The UK budget deficit reduction in September exceeded expectations due to tax revenues growth. Public Sector Net Borrowing ex Interventions – budget deficit indicator – amounted to 11.1 billion pounds sterling compared with 12.1 billion pounds for the same period last year. Economic data prove the UK economic recovery. Swiss Trade Surplus exceeded the forecast in September and amounted to 2.5 billion Swiss franc compared with the expected surplus of 2 billion Swiss franc.
Canadian dollar rose on Tuesday to 4-week high Vs the US dollar before the Bank of Canada decision on rate on Wednesday having almost no reaction to retail sales data. Retail sales grew by 0.2% in August Vs prior month while a growth by 0.3% was expected. Prior month data were also revised downwards. At the same time Retail Sales ex Autos grew by 0.4% having exceeded forecasted growth by 0.2%.
By MasterForex Company
Overview of the main economical events of the current day - 24/10/2013
On Wednesday China Was in the Spotlight
The US dollar rose on Wednesday to the pound and commodity currencies and almost didn’t change to the euro and weakened Vs the yen and Swiss franc. Risk inclination fell on Wednesday amid the reports about interest rates sharp increase in China and rising bad loans write-offs by Chinese banks – which aroused the growth of yen and franc and the decrease of risk-sensitive AUD and NZD. Canadian dollar dropped after a mild BOC Rate Statement in which it refused its inclination to raising interest rate.
On Wednesday compared with the prior day China was in the spotlight. Rates growth at the local interbank market turned out the highest since July and it was recorded as the People's Bank of China didn’t start injecting funds into the market on Wednesday. Seven day Repo Rate in China which indicates the availability of funds in the bank system rocketed by 42 basis points – to 4%. The central bank of China is concerned about too fast growth of real estate prices in the country. Chinese banks also have problems. Five largest banks of China increased loan write-offs by 2.9 times in the first half of 2013 to 22.1 billion yuan ($3.65 billion) in comparison with 7.65 billion yuan last year.
Worsened liquidity situation which is the main growth driver of risk assets led to risk inclination decrease, stock markets fall and the growth of yen, franc and dollar. Japanese Nikkei fell by 2% and finished the session with a significant fall since October 2. The yen rose to its high for two weeks. New Zealand dollar dropped at the fastest rate for two months, Australian currency also weakened. Though at first AUD rose on Wednesday amid the news about higher than expected inflation rate in the third quarter. Consumer Price Index rose by 1.2% Vs prior quarter while a growth only by 0.8% was expected.
Canadian dollar fell to almost 2-week low Vs the dollar after BOC Rate Statement in which it refused an inclination to interest rate increase and lowered its forecast on GDP growth for the nearest several months. The Bank of Canada left its interest rate unchanged but marked economic slowdown. Bank of Canada governor Poloz said that more negative data would make them think again about the probability of rate decrease.
The euro almost hadn’t changed by the end of the day. Germany's economics ministry raised its economic growth projection for 2014 to 1.7% from 1.6% referring to a high employment rate, strong home economy and investment growth. Euro-Zone Flash Consumer Confidence grew from -14.9 in September to -14.5 in October. The index has been at the highest level since July, 2011 for two months in a row. According to the monthly statement of the Bank of Spain economic growth has been recorded for the first time since 2-year recession. In the third quarter of 2013 Spanish GDP grew by 0.1% compared with the second quarter when its fall by 0.1% was recorded.
The Bank of England Meeting Minutes published on Wednesday showed that the central bank could start raising interest rates earlier than expected – after Monetary Policy Committee had admitted that unemployment rate in the UK would fall in the second half of the year faster than assumed. The economy will also grow in the second half of the year faster than expected. The data indicate a stable economic recovery of the UK. After the publication of meeting minutes the expectations that the UK central bank could raise interest rates much earlier than in 2016, strengthened.
By MasterForex Company
Overview of the main economical events of the current day - 25/10/2013
EURUSD Above 1.38 for the First Time for Almost Two Years
The US dollar was traded on Thursday slightly downwards against the euro and the pound; it almost didn’t change Vs the yen, Swiss franc and Australian dollar; and it rose against Canadian and New Zealand dollars. Unemployment claims and Manufacturing PMI in the USA turned out worse than expected. The euro and the pound rose despite the decrease of euro-zone PMI and Factory orders in the UK. Australian dollar was supported by Chinese Manufacturing PMI growth.
Unemployment claims in the US fell less than expected last week – by 12 thousand to 350 thousand against the expected decrease to 340 thousand. The indicator has been falling short of market expectations for three weeks in a row. An average number of claims for past four weeks rose to 348.25 thousand from 337.5 thousand. The U.S. Flash Markit Manufacturing PMI dropped more considerably in October than expected – from 52.8 p. in September to 51.1 p. against the expected decrease to 52.5 p. PMI growth rate in October turned out the weakest for the past year.
At the same time Trade balance and job openings in the USA turned out slightly better than forecasted. The US Trade deficit in August grew by 0.4% to $38.8 billion from $38.6 billion in July, which turned out a little better than expected deficit growth to $39.4 billion. The exports fell by 0.1% while imports remained almost unchanged. The US Job Openings rose considerably in August by 1.8% to 3.88 million in comparison with 3.81 million in July.
The euro again updated its annual height having hit 1.38 Vs dollar for the first time since November, 2011 despite some decrease of Purchasing Manager Indexes which are worse than expected – except German Manufacturing PMI. Euro-Zone Composite PMI fell to 51.5 p. in October from 2-year highest reading 52.2 p. prior month while index growth to 52.4 p. was expected. However, the index has been above 50 for four months in a row already, which indicates economic growth.
Spanish Unemployment Rate fell lower 26% for the first time in a year. Unemployment rate fell to 25.98% in the third quarter of this year from 26.26% in the second quarter. Unemployment decrease to 26.10% was forecasted. ECB's Yves Mersch said on Thursday that another 3-year LTRO might not be necessary as the ECB soft monetary policy shows its effectiveness.
British pound recovered its losses at the end of the day which was after the release of weak CBI Industrial Order Expectations. CBI Industrial Order Expectations dropped to -4 in October against +9 in September. At the same time companies’ optimism increased reflecting economic recovery acceleration from the beginning of this year. Bank of England governor Mark Carney said on Thursday that the central bank would facilitate the provision of liquidity to banks if the financial system seemed unstable.
Australian dollar was supported by Chinese manufacturing PMI growth data. HSBC Flash Manufacturing PMI rose to 50.9 p. in October, the highest reading for past seven months against 50.2 p. in September – which says about the acceleration in manufacturing sector of the world’s second largest economy. The index is above important level of 50 p. for three months in a row. New Zealand dollar was traded downwards despite a significant trade deficit decrease. Canadian dollar also continued falling under the pressure of BoC Rate Statement published on Wednesday that the central bank refused its inclination to raise interest rate.
By MasterForex Company
Overview of the main economical events of the current day - 28/10/2013
The Main Events of This Week
The US dollar almost didn’t change by the end of Friday’s trade Vs the euro, pound and yen – and continued growing to commodity currencies. The US statistics released on Friday mostly turned out worse than expected. US consumer confidence dropped in October to 10-month low amid budget debates and government shutdown. Revised U. of Michigan Consumer Sentiment fell to 73.2 p. in October against the preliminary October reading of 75.2 p. and the final September reading of 77.5 p.
Durable Goods Orders in September exceeded expectations and grew by 3.7% while 2.3% was forecasted – but the growth exceeded mainly due to aircraft orders growth (+57.5%). Such orders are volatile and as a rule don’t reflect the demand in the US economy. The key demand indicator - Core Durable Goods Orders Ex Transportation – fell by 0.1% while a growth by 0.5% was forecasted; they have been falling for three months in a row.
The euro slowed down its growth on Friday amid Business Climate decrease in Germany in October from 1.5-year high – which happened for the first time in 5 months. German Ifo Business Climate fell to 107.4 p. in October while a growth to 108 p. was forecasted. The pound had almost no reaction to preliminary GDP for the third quarter which met the expectations. The UK GDP grew by 0.8% in the third quarter in comparison with the second quarter, and by 1.5% at an annual rate. Quarterly economic growth rate in the third quarter turned out the highest since the second quarter, 2010.
By the end of the week the dollar had lost a little more than 0.5% according to the dollar index having been under pressure after the U.S. labour market weak report. The US dollar dropped Vs the Swiss franc (-1.06%), euro (-0.91%) and Japanese yen (-0.37%); it almost didn’t change to the British pound – and rose Vs New Zealand dollar (+2.55%), Canadian dollar (+1.62%) and Australian dollar (+0.95%).
One of the most important events of the week may be FOMC meeting on October 29-30; its results will be announced on Wednesday. It is supposed that asset purchase as QE will be left unchanged – which was also favored by a weaker labour market report for September. October ADP Non-Farm Employment Change report will be released on Wednesday.
A lot of US important data will be published including delayed ones because of government shutdown. On Monday there will be a release of Industrial Output and Pending Home Sales data; on Tuesday - Producer Price Index, Retail Sales, S&P/Case-Shiller HPI and CB Consumer Confidence; on Wednesday - Consumer Price Index; on Thursday - Chicago PMI; and on Friday – ISM Manufacturing PMI. Non-Farm Payrolls will be released on November 8.
In the euro-zone Euro commission business confidence will be released on Wednesday; and on Thursday – unemployment rate and preliminary inflation data. Spanish preliminary GDP for the third quarter will be released on Wednesday. In Germany – labour market and inflation reports; and on Thursday - GfK German Consumer Climate and Retail Sales. European countries will shift to Daylight Saving Time on Sunday, October 27.
In the UK CBI Realized Sales report will be released on Monday; on Tuesday - BoE Monetary & Financial Statistics; on Thursday - GfK Consumer Confidence and Nationwide HPI; and on Friday - Manufacturing PMI. In Japan retail sales data and Household Spending will be published on Tuesday; on Wednesday – preliminary industrial output; and on Thursday - BoJ Interest Rate Decision, no changes are expected.
In Australia Building Approvals, Private Sector Credit, quarterly Import Prices report will be released on Thursday; and on Friday – quarterly report on Producer Price Index. RBA governor Glenn Stevens will make a speech at a conference in Sydney on Tuesday. On Thursday RBNZ Interest Rate Decision will be announced and also Building Consents and ANZ Business Confidence will be released. In China official Manufacturing PMI will be released on Friday. In Canada GDP will be published on Thursday.
By MasterForex Company
Overview of the main economical events of the current day - 29/10/2013
Dollar Grew Before the Start of 2-Day FOMC Meeting
The US dollar was traded upwards on Monday before 2-day FOMC meeting which starts on Tuesday amid inconsistent statistics. The US industrial output growth exceeded expectations – at the same time pending home sales dropped at the fastest rates for more than two years. The pound fell after a weak CBI Distributive Trades Survey.
The US industrial output in September rose by 0.6% compared with the prior month while a growth by 0.4% was forecasted. The indicator has been growing for two months already. The growth in September returned industrial output to its average of 2007 for the first time since recession. Capacity Utilization Rate increased to 78.3% in September, the highest level since this February – in comparison with 77.9% in August and the forecast of 78%.
Pending home sales declined for the fourth consecutive month in September due to higher mortgage interest rates, higher home prices and budget uncertainty. The Pending Home Sales Index fell by 5.6% in September to 101.6 from a downwardly revised 107.6 in August – which has become the lowest reading since December, 2012. At an annual rate the index fell by 1.2%, which became the first annual decrease for 29 months.
The pound fell after a weak CBI Distributive Trades Survey, the euro also slightly fell. According to the CBI, Realized Sales slumped unexpectedly in October from more than a year height 34 to 4-month low of 2 while a decrease only to 31 was expected. At the beginning of the day the pound rose after Hometrack Housing Prices which showed price growth in October for nine months in a row – by 0.5% at a monthly and by 3.1% at an annual rate.
Bank of England member Miles warned on Monday against premature interest rates increase having called it catastrophic despite recent signs of economic growth. Bank of England Meeting Minutes published last week raised expectations of an earlier start of interest rates increase than in 2016. BOE Chief Economist Spencer Dale also said that the Bank of England wouldn’t raise interest rates until unemployment rate fell significantly in the UK.
Meanwhile, Italian Business Confidence rose to its high in October for more than two years despite weak domestic demand. The index grew to 97.3 from 96.8 in September while index decrease to 96.3 was forecasted.
By MasterForex Company
Overview of the main economical events of the current day - 30/10/2013
Australian Dollar Fell After RBA Governor Stevens’ Speech
The US dollar grew on Tuesday Vs all major currencies amid 2-day FOMC meeting and bipolar US statistics. House prices rose more than expected but consumer confidence and retail sales in the USA decreased. Australian dollar dropped after RBA governor Glenn Stevens’ speech as he said that Australian dollar’s rate wasn’t supported by macroeconomic indicators.
On Tuesday 2-day FOMC meeting started and on Wednesday evening the central bank will announce monetary policy statement. In spite of the fact that the Fed is expected to keep its stimulus program unchanged the Fed can make a hint that it would start tapering this year in December already.
A positive moment was real estate price growth in American 20 largest cities - S&P/Case-Shiller Home Price Index grew by 12.8% in August at an annual rate in comparison with the expected growth by 12.5%. The indicator’s growth became the strongest since 2006. At the same time the US consumer confidence in October dropped to its low for half a year - CB Consumer Confidence fell to 71.2 p. against 80.2 p. in September while a decrease only to 75 p. was expected.
Retails sales fell by 0.1% in September while no changes were expected. However, the decrease occurred mainly due to auto sales fall by 2.2% - Retail Sales ex Autos rose by 0.4%, which met the expectations. September auto sales data could be distorted due to Labor Day celebration at the beginning of the month.
The euro rocketed after the speech of ECB member Nowotny but then slumped. Nowotny said that there were signs of euro-zone economic recovery and the ECB was unlikely to lower interest rates more. A negative deposit rate is unrealistic. And though the euro growth doesn’t make the central bank happy – it doesn’t require any correction from its side and, besides, the ECB doesn’t have funds to struggle with it. However, he added that the monetary policy should stay mild.
The pound also fell having ignored Mortgage Approvals growth in the UK up to the height since February, 2008. Mortgage Approvals rose to 66.7 thousand in September against 63.4 thousand in October while a growth only to 66 thousand was expected. The data indicate a further recovery at the housing market which is gathering pace. At the same time consumer lending data turned out worse than expected.
Australian dollar fell significantly on Tuesday having dropped to its low for more than two weeks against the US dollar after the speech of RBA governor Glenn Stevens who said that the Australian dollar wasn’t supported by macroeconomic indicators and probably would be considerably lower in future. This statement showed central bank’s concerns over the recent strengthening of Australian currency.
Canadian dollar continued falling. Raw Materials Price Index fell by 1.5% in September while its decrease only by 0.5% was expected. Besides, BoC governor Stephen Poloz in his speech on Tuesday again repeated his recent statement about the refusal of inclination to raise interest rates.
By MasterForex Company
Overview of the main economical events of the current day - 31/10/2013
FOMC Didn’t Bring Any Surprise but Dollar Rose
The US dollar rose on Wednesday after the results of FOMC meeting although it was traded downwards all day before it. No changes in the monetary policy were made and almost nothing changed in the final statement in comparison with the former meeting – though the Fed marked some improvement in American economic state. Probably the market participants expected a milder statement considering government shutdown earlier this month.
The voting was over with the result 9-1and the estimate of economic state was almost unchanged. High market rates were not mentioned in the statement but housing market slowdown was marked. Although the Fed marked that the US economic recovery was still unstable, it also said about economic activity growth and weakening downward risks. Besides, the Fed didn’t exclude the possibility of QE tapering this year already.
The Fed again kept a low profile concerning bond purchase program wishing to see more evidence of economic situation improvement. The last employment report again showed a disappointing Employment Change growth in September. ADP Non-Farm Employment Change for October released on Wednesday turned out worse than expected. ADP Employment Change rose only by 130 thousand although a growth by 150 thousand was expected. Prior month data were revised for the worse by 19 thousand to 145 thousand. The indicator has been falling for 4 months in a row.
The euro was traded upwards at the beginning of the day but then it fell. German labour market data met expectations on the whole. Unemployment rate in October stayed at 6.9% and German Unemployment Change grew by 2 thousand while no changes were expected. According to the Reuters, 44 of 59 economists believe that the ECB would announce a new program of long-term refinancing operations. They think that interest rates will stay unchanged till early 2015.
Euro-Zone Economic Sentiment Indicator in October rose to 97.8 compared with 96.9 in September showing the highest reading since August 2011. Spanish economy went out of 2-year recession – in the third quarter the GDP of Spain grew by 0.1% in comparison with the prior quarter, which coincided with the released estimate of the Bank of Spain last week.
New Zealand dollar rose after the decision of the Reserve Bank of New Zealand to keep the key interest rate unchanged. RBNZ governor Wheeler said that rate increase could be necessary next year considering high house price inflation. But the terms and the scale of rate increase will depend on the housing market situation. Wheeler said that despite a high rate of New Zealand dollar was still a problem, it allowed the central bank to show a high flexibility regarding further rates increase.
By MasterForex Company
Overview of the main economical events of the current day - 01/11/2013
EURUSD: the Lowest Decrease for Half a Year
The US dollar rose significantly on Thursday according to the dollar index amid Chicago PMI growth but it was traded differently Vs major currencies. The euro fell after the release of weak unemployment and inflation reports in the euro-zone; and retails sales and consumer confidence in Germany. Canadian dollar grew after the release of strong GDP of Canada that exceeded the forecasts. The pound and Australian dollar were supported by housing market data.
The dollar rose significantly against the euro and Swiss franc; it fell against Canadian dollar, yen and New Zealand dollar; and almost didn’t change Vs the pound and Australian dollar. The US Unemployment Claims last week almost met expectations having dropped by 10 thousand to 340 thousand while a decrease by 12 thousand to 338 thousand was forecasted. The reading has been falling for three weeks in a row. At the same time 4-week average of claims rose by 8 thousand to 356. 25 thousand and considerably exceeded the number of claims for the last week.
Chicago PMI rocketed in October despite the forecasts to 2.5-year high 65.9 p. in comparison with 55.7 p. in September while a decrease to 55 p. was expected. The number of employees and new orders rose significantly. Chicago PMI is released not long before ISM Manufacturing PMI and it can be used for its forecasting. ISM Manufacturing PMI will be released on Friday.
The euro showed the lowest decrease on Thursday Vs dollar for 6 months having dropped to 2-week low amid a large number of negative statistics. Euro-zone inflation slowed down in October to 0.7% at an annual rate compared with 1.1% in September and turned out the lowest since November, 2009. Unemployment rate in the euro-zone returned to its record readings in September at 12.2%, September data were revised for the worse from 12.0% to 12.2%. Italian Unemployment Rate grew to 12.5% in September against the expected growth to 12.3%.
German retail sales fell by 0.4% in September; a growth by the same 0.4% was expected. Prior month data were revised for the worse. GfK Consumer Climate fell unexpectedly for the first time in 10 months having dropped to 7.0 p. in November after having reached 6-year high 7.1 p. in October. Index growth to 7.2 p. was expected.
Weak inflation and employment reports increased expectations of new monetary policy easing measures from the ECB. The ECB member Nowotny said on Thursday that the ECB would provide liquidity to euro-zone banks to avoid a "cliff" effect when 3-year term of LTRO expired. JPMorgan and BNP expect ECB rate decrease by 0.25% in December. According to Morgan Stanley European banks will decrease its offshore assets to accelerate the process of paying back their loans in the ECB, which may lead to the growth of euro.
Unlike the euro the pound almost hadn’t changed by the end of the day – it was supported by housing market data. Nationwide House Prices in the UK rose by 1% m/m in October having exceeded forecasted growth by 0.7%. At the same time UK consumer confidence fell in October after five months of growth. GfK Consumer Confidence fell to minus 11 p. in October from minus 10 p. in September when it was the highest for 5 years.
The yen rose insignificantly after a few days of fall amid the finished meeting of the Bank of Japan where monetary policy was kept unchanged. The Bank of Japan announced that it followed a positive forecast for inflation signaling that the probability of new monetary policy measures is low in the nearest time. Canadian dollar grew after the release of strong Canadian economic growth data. The GDP grew in August by 0.3% m/m having exceeded the forecasted growth by 0.1 three times.
The Australian dollar grew on the back of housing market positive statistics but then it lost all its growth. Building Approvals in September rose by 14.4% in comparison with August, which became the largest growth for more than a year. Exports and imports price growth also exceeded expectations. New Zealand dollar was traded upwards after RBNZ signaled about keeping the inclination to tough policy.
By MasterForex Company
Overview of the main economical events of the current day - 04/11/2013
The Main Events of the Week
The US dollar continued growing on Friday Vs most major currencies amid manufacturing PMI growth which is still at 2.5-years high. The pound fell after weak UK manufacturing PMI that didn’t meet the expectations. The euro continued falling amid the expectations of a possible rate decrease at the next several ECB meetings after the release of previously weak inflation data.
ISM Manufacturing PMI in the USA rose to 56.4 p. in October in comparison with 56.2 p. prior month while index decrease to 55 p. was expected. The growth happened mainly due to new export orders, prices and employment; while production, inventories and supplies dropped. The Final Markit Manufacturing PMI also fell in October less than forecasted to 51.8 p. while initially a decrease to 51.1 p. from 52.8 p. in September was reported.
By the end of the week the dollar grew almost by 2% according to the dollar index and showed the highest weekly growth for more than 4 months. Most of all it grew against the euro (+2.29%), Swiss franc (+2.18%), Australian dollar (+1.50%), British pound (+1.49%) and Japanese yen (+1.29%). The US dollar rose insignificantly only to New Zealand dollar (+0.16%) and fell only against the Canadian dollar (-0.25%).
The euro showed the lowest decrease to the dollar in points for almost 1.5 year. After euro-zone weak inflation data the expectations of possible rate decrease at the next several ECB meetings rose at the market; although nobody expects it at the nearest meeting on November 7. However, market participants will be very attentive to the ECB governor Mario Draghi’s press conference which will take place after the meeting on Thursday.
The dollar was supported after the Fed had slightly improved its estimate of American economy at the last meeting, which was proved by PMI of Chicago and of all country. According to the Bloomberg, economists worsened the forecast of the US GDP growth for the 4th quarter to 2% from 2.4% three weeks earlier because of the government shutdown for16 days in October. Besides, growth estimate for the 1st quarter of 2014 didn’t change (+2.6%).
GDP first release for the third quarter will be released on Thursday, November 7, with 8 days delay. Meanwhile, most leading banks didn’t change its forecasts on QE3 tapering and continue expecting it only next March-April. The Fed member Bullard announced on Friday that the situation at the labour market had a key value and if it continued improving, the central bank would be able to start QE reduction.
A very important event of this week will be Friday release of Non-Farm Payrolls for October. About 125-130 thousand new jobs and unemployment rate growth by 0.1% to 7.3% are expected. The data must show how the government shutdown influenced economic situation in the country. ADP data for October which are usually considered preliminary - indicated ADP Employment Change decrease to 130 thousand.
In the USA on Monday there will be a release of Factory Orders for August and September, on Tuesday - ISM Non-Manufacturing PMI; and on Friday – Personal Income and Spending and Preliminary U. of Michigan Consumer Sentiment. The USA and Canada shifted to Daylight Saving Time on Sunday, November 3.
In the euro-zone there will be a release of Manufacturing PMI on Monday and non-Manufacturing PMI – on Wednesday; on Tuesday – Producer Prices and on Wednesday – Retail Sales. In Germany Factory Orders will be released on Wednesday, on Thursday – Industrial Output and on Friday – Trade Balance. In France Industrial Output and Trade Balance will released on Friday.
The Bank of England will publish the results of its monthly meeting on Thursday; no changes in the policy are expected. In the UK construction PMI will be released on Monday, on Tuesday – Service PMI, on Wednesday – industrial output and on Friday – Trade Balance. The Bank of Japan will publish on Wednesday Meeting Minutes of October 3-4; and the BoJ governor will make a speech in Osaka and will hold a press conference.
In Australia retail sales will be released on Monday, on Wednesday – trade balance, on Thursday – labour market report and on Friday - RBA Monetary Policy Statement. Australian Reserve Bank meeting is traditionally held on the first Tuesday of the month and no changes in the policy are expected. New Zealand Employment Change will be released on Wednesday.
In Canada Building Permits and Ivey PMI will be released on Wednesday; and on Friday – labour market report. In China a large block of statistics will be released at the end of the week: trade balance – on Friday; and on Saturday – inflation, industrial output, retail sales and new loans.
By MasterForex Company
Overview of the main economical events of the current day - 05/11/2013
ECB Rate Decrease Is Possible but Unlikely
The US dollar was traded slightly downwards on Monday against most major currencies having been corrected after five days of growth. The US Factory Orders turned out slightly worse than expected. The pound rose amid the UK construction PMI increase which is at 6-year high. The euro also slightly strengthened on the back of a small growth of euro-zone manufacturing PMI. The Australian dollar grew after the positive statistics on Chinese Service PMI growth and Australian retail sales.
On Monday the US Factory Orders for two months were released. Factory Orders fell by 0.1% in August, which turned out worse than expected growth by 0.3%. Factory Orders in September rose by 1.7% after two months of decrease – which met the forecasts (+1.8%). However, the growth was mainly due to aircraft orders growth – Factory Orders ex Transportation fell by 0.2% in September. Capital Goods Orders that include machinery and electronics fell by 1.3%.
Fed member Bullard said that the probability of QE tapering in December still existed – at the same time inflation was too low for it. Meanwhile, Standard & Poor's lowered the U.S. GDP growth forecast in the 4th quarter from 1.7% to 1.6% at an annual rate.
The pound was traded slightly upwards after the release of data that showed UK Construction PMI growth which is at 6-year high. The UK Construction PMI rose to 59.4 p. in October against 58.9 p. in September – while its decrease was expected. Construction continues growing in the UK but the sector accounts only for 6.3% of all economy.
The euro fell to its low for almost 7 weeks to the dollar but then recovered its losses and even strengthened a little by the end of the day amid euro-zone manufacturing PMI slight growth. Euro-zone Manufacturing PMI rose to 51.3 p. in October from 51.1 p. in September, which coincided with the preliminary estimates. German data turned out better than expected while the data of France and Italy were a little worse.
Sentix Investor Confidence exceeded expectations (6.2) and rose up to 9.3 in November compared with 6.1 in October still being at 2.5-year high. Meanwhile, rate decrease expectations are growing at the market and more banks forecast its decrease already this week. These are Bank of America, UBS and Royal Bank of Scotland. Surely, ECB rate decrease in November is possible but still is unlikely.
Australian dollar rose after the release of retail sales strong data which showed a fast monthly growth for past seven months. Retail sales rose by 0.8% in September Vs prior month while a growth only by 0.4% was expected. AUD was also supported by Chinese Services PMI growth. Chinese Non-Manufacturing PMI released on Sunday grew to its high for 16 months 56.3 p. in October.
By MasterForex Company