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The Week Ahead – It’s a Hectic Week Ahead. Stats and Geopolitics are in Focus

Bob Mason

On the Macro

It’s a busy week ahead on the economic calendar, with 61 stats to monitor over the week.

For the Dollar:

After a shortened week last week, it’s a busy week ahead on the economic data front.

ISM and Markit Manufacturing PMI numbers get things going on Monday. The market’s preferred ISM Manufacturing PMI will have the greatest impact on the day.

The focus will then shift to a busy Wednesday.

ADP nonfarm employment change figures for October are due out ahead of ISM and Markit service PMI numbers.

On the day, the ISM Non-Manufacturing PMI and ADP numbers will have the greatest impact on the Dollar.

On Thursday, expect factory orders to provide direction ahead of a busy Friday.

November wage growth, nonfarm payrolls, and the unemployment rate will be in focus on Friday.

Strong labor market conditions continue to support consumption and service sector activity.

Any weak numbers would test the Greenback ahead of prelim December consumer sentiment figures.

The weekly jobless claims figures and October trade data on Thursday will be of less influence in the week.

Outside of the numbers, trade talks will continue to influence as will impeachment chatter. Hearings resume in the week ahead.

The Dollar Spot Index ended the week flat at $98.273.

For the EUR:

It’s also a busy week ahead on the economic data.

In the first half of the week, November manufacturing and service PMI numbers are due out on Monday and Wednesday.

Barring deviation from prelims, the focus will be on Spain, Italy, and the Eurozone numbers.

Through the 2nd half of the week, German factory orders and retail sales figures are due out on Thursday. On Friday, industrial production figures for October are due out.

Following stats that were skewed to the positive last week, the markets will be looking for a pickup in private sector activity.

Spanish unemployment change figures on Tuesday will likely have a muted impact on Tuesday. Barring deviation from 2nd estimates, the Eurozone’s GDP numbers would also likely be brushed aside.

Outside of the numbers, expect geopolitical risk to also influence.

From the U.S, progress towards a phase 1 trade agreement will provide direction, while we can expect UK politics to also begin to influence.

The EUR/USD ended the week down by 0.03% to $1.1018.

For the Pound:

It’s a relatively busy week ahead on the economic calendar.

Finalized November private sector PMIs are due out on Monday, Tuesday, and Wednesday.

Following disappointing prelim figures, any upward revisions would be a boost for the Pound.

November’s BRC Retail Sales Monitor on Tuesday will also provide direction early in the week.

While the stats will influence, the UK General Election will remain the key driver, with just 11 days remaining until Election Day.

Debates, interviews, opinion polls, and election result predictions will drive the Pound in the week ahead.

The GBP/USD ended the week up by 0.71% to $1.2925.

For the Loonie:

It’s a busy week ahead on the economic calendar.

Key stats include 3rd quarter productivity figures on Monday, October trade data and the Ivey PMI on Thursday.

At the end of the week, November employment figures will also influence.

While the stats will provide direction, the Bank of Canada will deliver its interest rate decision on Wednesday.

Last week’s 3rd quarter GDP numbers could ultimately deliver a more dovish statement that would weigh on the Loonie.

In the week prior, BoC Governor Poloz had stated that interest rates were at the right level to support the economy…

The Loonie ended the week down by 0.61% to C$1.3282 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s also a busy week ahead.

At the start of the week, manufacturing numbers along with company gross operating profit figures will provide direction.

The focus will then shift 3rd quarter GDP numbers due out on Wednesday.

On Thursday, October retail sales figures and trade data will also have a material influence on the Aussie.

From elsewhere, private sector PMI numbers out of China will also influence.

The NBS figures released on Saturday were Aussie Dollar positive, ahead of the more influential Caixin figures due out on Monday and Wednesday.

On the monetary policy front, the RBA delivers its December interest rate decision.

The monetary policy meeting minutes from November had revealed that the Board discussed a rate cut in the last meeting.

Since the last RBA meeting, it’s been a mixed bag on the economic data front.

While September trade data and business and consumer confidence were positives, wage growth and employment figures have disappointed.

When considering the fact that the RBA’s main area of concern continues to be over consumer spending, weaker wage growth and a slide in employment would support a more dovish stance on policy.

On the geopolitical risk front, chatter on trade will need monitoring and will remain a key driver.

The Aussie Dollar ended the week down by 0.34% to $0.6763.

For the Japanese Yen:

It’s also a relatively busy week ahead on the economic calendar.

Key stats include 3rd quarter capital spending figures on Monday and October household spending figures due out on Friday.

Barring deviation from prelim figures, finalized manufacturing and service sector PMIs will likely have a muted impact.

From elsewhere, private sector PMI numbers out of China and geopolitics will ultimately drive the Yen in the week.

The Japanese Yen ended the week down by 0.76% to ¥109.49 against the U.S Dollar.

For the Kiwi Dollar:

It’s a particularly quiet week ahead on the economic calendar, with no material stats due out of New Zealand.

A lack of stats leaves the Kiwi in the hands of market risk sentiment throughout the week.

The Kiwi Dollar ended the week up by 0.19% to $0.6422.

Out of China

It’s a relatively busy week on the economic data front. Following NBS Private Sector PMI numbers from Saturday, the focus will be on the Caixin surveys.

The Manufacturing PMI due out on Monday and Services PMI on Wednesday will influence risk appetite in the week.

Outside of the numbers, however, expect updates from Beijing and Washington to have the greatest impact.

The Yuan ended the week up by 0.09% to CNY7.0325 against the Greenback.

Geo-Politics

Impeachment: Open door testimony resumes after the Thanksgiving holiday. While Trump is still nowhere nearer to being thrown out of office, the hearings will continue to draw interest…

Trade Wars: There’s still no sign of an actual phase 1 agreement, in spite of positive updates from both sides. Another week of positive chatter but no actual concrete progress may test the broader market… In the early hours of Thursday, Trump signed the HK Bill to protect HK protestors. China’s reaction will be key…

UK Politics: The UK General Election is just 11 days away. Expect the Pound to be particularly sensitive to the opinion polls, predictions and televised debates and interviews. Boris Johnson’s lead has tumbled, raising the chances of a hung parliament and more Brexit uncertainty. That’s not going to be particularly positive for the Pound.

Monetary Policy

Bank of Canada: On Wednesday, the BoC delivers its final monetary policy decision of the year. BoC Gov. Poloz last spoke of interest rates being at the right level to support the economy. Economic data has been mixed, however. Will the Committee remain divided or more aligned with the governor?

RBA: The last RBA minutes were mode dovish than the rate statement had suggested, weighing on the Aussie. With wage growth and employment figures disappointing, a more dovish statement could be on the horizon. The RBA may need to decide whether it’s worth spooking consumers with one last rate cut…

This article was originally posted on FX Empire

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