Monday, September 1, 2014
1:45 GMT HSBC Chinese Manufacturing PMI (August)
There are a couple of manufacturing PMIs being released from China on this day, but the HSBC release is often viewed with more reverence due to its perceived independence. The other release is a Chinese state release, which, well, let’s just say it feels massaged. This figure climbed back in to growth territory for the last two months after spending five months in contraction, and appears to be trending more positively. The Flash estimate provided a 50.3, which was worrisome, but as long as it doesn’t fall below 50, it probably won’t panic too many market participants.
8:00 GMT Markit Eurozone Manufacturing PMI (August)
There will be a plethora of PMI reports released this week, and the Eurozone is particularly rife with them. Along with the entirety of the region, each individual nation’s report will carry its own narrative. The most important ones will likely be Germany and France with both heading lower in recent months. Germany in particular could be most worrisome as many of the releases out of the European giant have undershot estimates as the Russia/Ukraine flap on their doorstep is creating economic problems.
8:30 GMT Markit UK Manufacturing PMI (August)
Unlike their EU brethren on the mainland, the British Isle has stayed strong as of late in the PMI department. In fact, many measures of strength and growth in the UK have trended more toward the topside than the bottom. Occasional misses have kept the market on edge with its expectation that BOE Governor Mark Carney would be the first of the big three central banks to raise interest rates. Carney has been a big reason for the indecision of traders as well as he has repeatedly flip-flopped on the subject of late, hence the fall in the GBP over the last couple months. Another strong showing in this report could help the GBP reverse some of the decline and get the currency back in favor.
Tuesday, September 2, 2014
4:30 GMT Reserve Bank of Australia’s Interest Rate Decision and Statement
The fireworks normally reserved for central bank decisions may have to be holstered for this release as not much is expected. The AUD/USD has moved in a range of about 120 pips since the last RBA decision, not too compelling in the grand scheme of things. Speaking of the last month, Aussie economic data hasn’t given the RBA much to worry about either with only employment being of any concern with a jump in the unemployment rate and miss on employment change; however, one month’s single bad report does not monetary policy make. Don’t be surprised to see a repeat performance of last month’s meeting, which means that there may not be too much to get excited about.
Wednesday, September 3, 2014
1:30 GMT Australian Gross Domestic Product (Q2)
Aussie GDP has steadily increased over the last three quarters and reached an impressive 1.1% in Q1 which was the best result since Q1 of 2012. When it comes to export-dependent nations like Australia, the currency value can be a very influential aspect of how strong or weak GDP can be, and fortunately, the currency was relatively stable during Q2, largely ranging between 0.92-0.94. In addition, economic data during that timeframe wasn’t overtly negative, so at a glance, it appears the string of acceptable results may continue. If that is indeed the case, the AUD/USD could make another run toward 0.95.
1:45 GMT HSBC Chinese Services PMI (August)
Much like the Manufacturing version of this release, the HSBC Services data carries a bit more weight than its state-released cousin. Unlike the Manufacturing version though, this indicator has NEVER fallen below the 50 level that demarcates growth from contraction. Granted, the measurement has only been around for around 9 years, but the fact that it hasn’t fallen below 50 is significant, especially since last month’s reading of 50.0 is right at that level and signifies the lowest result ever. If this were to fall below 50, there could be some emerging market worries that could ensue and that whole episode of the “Fragile Five” nations that we endured a few months ago could come roaring back to the forefront. That means a potential stock market selloff, safe haven currency strength, and a rip-roaring start to the post-summer trading season. If the Russia/Ukraine conflict were to turn more significant as well, this week could get pretty ugly.
8:00 GMT Markit Eurozone Services PMI (August)
Repeating the same sentiment from the Manufacturing version of this release, Germany and France’s individual results may be more vital than the EZ as a whole. The fact that the EZ is struggling isn’t news, but the extent of that struggle is something altogether different. Either way, this may have diminished impact due to the ECB making a monetary policy decision on the next trading day.
8:30 GMT Markit UK Services PMI (August)
Strong has been the order of the past few months for UK data, and Services PMI has led the way. This measure hasn’t seen a result below 55 since June 2013, and expectations in the high 50s shows that investors expect it to remain strong. Last month’s 59.1 was the best result in 2014 and if the trend could continue, we may see a reading in the 60s and a potential boon to the GBP.
14:00 GMT Bank of Canada Interest Rate Decision and Statement
While the last BoC meeting failed to engender any interest in buying or selling immediately after the release, the CAD lost a lot of ground in the month afterward. Last time Stephen Poloz and his merry band of bankers convened, USD/CAD was trading around 1.0750, but then had a rip-your-face-off rally (at least for the typically mundane USD/CAD) up to nearly 1.10 in the following three weeks. The bottom dropped out after as we reside near 1.0850 as I type, but the BoC probably prefers the exchange rate to be closer to the 1.10 level to help the export industry a little more; watch for some dovish rhetoric from them if they take that tact.
Thursday, September 4, 2014
?:?? GMT Bank of Japan Statement on Monetary Policy
We would love to sit here and bang the drum of the need for the BoJ to finally increase the amount of Quantitative and Qualitative Easing that it promised to do if the economy appeared to stumble after the sales tax increase went in to effect back in April of this year, but we doubt they will this time around. BoJ head Haruhiko Kuroda has said time and again in speeches recently that the fall back in Retail Spending and Household Spending are in line with their projections and completely normal after a tax increase like Japan instituted. Well, once again, Household Spending declined more than the market expected, but Retail Sales increased, and beat consensus. Therefore, the BoJ may very well continue their policy of inaction.
1:30 GMT Australian Retail Sales (August)
Last month saw a welcome reprieve from disappointing data on this front with a 0.6% gain in Retail Sales and provided the first consensus-beating figure since March of this year. Interestingly, when there are consecutive months of less-than-stellar results, expectations get lower, which then makes smaller gains seem like triumphant victories. The same could be said for this month’s expectations, which are on the lower end at 0.4%, and could be easily trumped with only a small gain from the previous month.
6:00 GMT German Factory Orders (July)
German data is in disarray as a result of the Russia/Ukraine conflict and the sanctions that it has spawned, and Factory Orders are no exception. The past two months have seen declines of 1.7% and 3.2%, and the situation has only worsened since those results. Incredibly, consensus is calling for a 1.6% rise, but considering the many tentacles of the Russian sanctions, we wouldn’t be surprised to see a negative result once again.
11:00 GMT Bank of England Interest Rate Decision
When it comes to central bank meetings and their impact, the BoE has taken the cake as the least exciting over the last few years. The last time they did anything outside of expectations was back in late 2011 when they increased their Asset Purchase Facility from 200B to 275B. While they always could surprise us by adjusting the APF once again, don’t count on it as the most likely result will be another ho-hum announcement of no changes.
12:15 GMT US ADP Employment Change (August)
This is quickly becoming one of the more scrutinized pre-NFP releases as it attempts to use the same type of formula to measure job growth in the US. Each of the last two months, it correctly predicted that NFP would either by better or worse than consensus by doing the same on its own consensus. Perhaps that is simply dumb luck, but the result will carry some extra weight in relation to NFP regardless.
12:30 GMT European Central Bank Monetary Policy Statement and Press Conference
This one could be a doozy. ECB President Mario Draghi insinuated in his Jackson Hole speech last weekend that Quantitative Easing for Europe could be just around the corner by saying, “we stand ready to adjust our policy stance further.” Unfortunately, Draghi’s financial cohorts may not feel similarly: German Finance Minister Wolfgang Schaeuble mentioned in an interview that, “the ECB has reached the limit in helping the Euro Area.” Schaeuble may not be alone in that sentiment as rumors have been circulating that there may not be a consensus view on QE within the ECB’s own circle. Considering the depressed levels of the EUR/USD, if Draghi goes in to his press conference with only the insinuation that “the ECB stands ready to act” the battered currency could be in line for a relief rally.
14:00 GMT ISM US Non-Manufacturing PMI (August)
Aside from the headline number on this release, which has performed rather admirably over the summer months climbing all the way up to 58.7 last month, the employment subcomponent gets quite a bit of attention from those who are seeking to get a gauge on NFP. If the ADP release, along with the employment subcomponent, agrees on the direction of employment, the USD could be influenced significantly in the direction of those figures.
Friday, September 5, 2014
12:30 GMT US Non-Farm Payrolls and Unemployment Rate (August)
NFP typically has the most impact of any regular economic release, and this one may be no exception. If the ECB significantly bolsters EUR/USD the day before by failing to introduce QE, a positive result here could reverse any gain the EUR had and shove it right back down. On a side note, NFP has been above the 200k level for six straight months, a feat that hasn’t been achieved since late 1997/early 1998. If it were to exceed 200k for a seventh straight month, it would match a run that began in January 1997. Just in case you’re curious, we are nowhere near any type of record here as there were 19 straight 200k+ months from late 1993 to early 1995, so we may have a long way to go before this streak could end.
12:30 GMT Canadian Net Change in Employment and Unemployment Rate (August)
Statistics Canada made themselves the butt of many economic jokes and the target of various conspiracy theorists by adjusting their previously dismal initial release of employment last month (+200) with a spectacular figure merely two weeks later (+42,000). Of course, they explained it away by saying that they are in the middle of a once-in-a-decade redesign to their survey, and data that should have been entered was simply left blank which accounted for the ridiculously large misrepresentation. In other words, it was an intern’s fault. On the downright eerie front, the new figure continues the pattern of “beat to miss to beat to miss…” that has been ongoing since the December 2013 release. Expectations this time around are calling for 10.3k jobs gained, but if the on again, off again pattern holds, watch for a potentially negative figure and a CAD swoon.