It was definitely a September to remember, considering the significant events which took place in the month, ranging from a memorable OPEC meeting to various interest rate decisions. As we step into a new month, we commence with daily Forex news and trade opportunities for the week.
3rd October, AtoZForex – This week, we have the all important Non-farm payroll data amongst much other key news.
#1 Oil rallies on OPEC deal
Last week, the Organization of the Petroleum exporting countries (OPEC) agreed to a deal to limit oil output. According to Goldman Sachs, this optimism has sparked a short-term boost for oil prices. Yet, the investment bank believes that the oil supply outlook won’t change much on the long-term.
Opportunity: Buy oil on dips
#2 UK PMI week
From the UK, we have a host of producer manufacturing index data due for release this week. On Monday, we have the manufacturing PMI forecast to remain at 52.6. The construction PMI is scheduled for release on Tuesday, expected to show a 49.1 reading, potentially showing a contraction. On Wednesday, the services PMI is expected to come a tad lower than previous month at 52.1. While the manufacturing Production m/m is due of Friday. It is definitely going to be a big week for the sterling, haven opened the week with a bearish gap on news that the UK PM, Theresa May has set a date to trigger the Brexit processions.
Opportunity: Sell GBPUSD
#3 Deutsche Bank at the edge of failure?
Is Deutsche Bank at the edge of failure? Even the German authorities said that they are not considering any Deutsche Bank bailout plans despite the seemingly dire situation at the bank. The shares have been sinking. The CEO of the bank, however, tried to calm markets with a statement last week.
#4 Fed to buy stocks?
Answering to the question of whether the Fed is considering buying stocks, Fed chair Janet Yellen said the Fed is not allowed to buy equities; it can only purchase US treasuries and agency securities. Further clarifying that:
“Accommodation may be somewhere in the future, down the line that this is the kind of thing that Congress might consider, but if you were to do so, it’s not something that the Federal Reserve is asking for.”
#5 RBA cash rate decision
Having seen two rate cuts this year, the Reserve Bank of Australia is unlikely to cut rates any further. The latest decision is due this week and is expected that policy makers will keep rates at 1.5% this month. Other key data due from Australia this week include building Approvals m/m and retail sales m/m.
#6 BoJ tweaks policy leaves rates unchanged
The Bank of Japan opted to hold its negative interest rate at -0.1%. In an attempt to spur inflation, the bank will now target the shape of the Japanese yield curve. Stating that it will purchase Japanese government bonds with the aim of keeping the 10-year JGB rate “more or less at the current level” of around 0%.
#7 Fed split over rate hikes
As widely expected, the US central bank failed to increase rates for the first time this year. However, the interesting part is the fact that three FOMC members dissented by voting for rate hikes. The three policymakers that dissented are Cleveland Fed Loretta Mester, Boston Fed Eric Rosengren and Kansas City Fed Esther George.
#8 All eyes on Non-farm payroll
The US Non-Farm Employment Change is expected to show 171k job additions. An improvement from 151k reported last month. The unemployment rate is forecast to remain at 4.9%. However, the Average Hourly Earnings m/m is forecast to improve to 0.2%. If the report comes this upbeat, then we are likely going to see some dollar strength, considering that this may mean the Fed will finally raise rates for the first time this year in their next meeting.
Opportunity: Buy USDCHF on positive data
#9 Canada data
This week, we have a host of key data from Canada, starting with the Trade Balance report on Wednesday. This is forecast to show a 41.1B deficit in value between imported and exported goods and services during the reported month. On Friday, we have the employment change and unemployment rate data due for release. The Canadian dollar would also be driven by moves in the oil markets this week as markets try to fully discern the effect of OPEC’s latest decision.
#10 Pinpoint of Brexit process date
Prime Minister Theresa May exposed more information about the Article 50 of the Lisbon Treaty implementation process. During yesterday’s Conservative Party conference, the UK Prime Minister revealed that no unnecessary delays will be taken to invoke Article 50, aiming by the end of March 2017.
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