7 June, AtoZForex.com Vilnius — Friday’s NFP figures became a major sentiment changer as the U.S economy added 280 thousand employed people in May, much above the preliminary consensus figures. The biggest amount since December 2014 and with previous of 221k. However, unemployment rate has risen from a seven years low of 5.4% to 5.5%, nevertheless, as the number is still below 5.6% the labour market makes Feds uncomfortable with leaving interest rates at zero. The only thing preventing them from taking action is inflation, having first-quarter GDP at a contraction of 0.7%.
During Dudley’s speech on Friday in Minneapolis: “If the labour market continues to improve and inflation expectations remain well-anchored, then I would expect — in the absence of some dark cloud gathering over the growth outlook — to support a decision to begin normalizing monetary policy later this year,” The expectations for the Fed to raise rates remain in September.
US – USD
Weekly fundamental calendar for the U.S begins on Thursday. Retail Sales m/m is forecasted at 1.1% from previous 0.0%, Core Retail Sales m/m, which exclude automobile sales, is estimated at 0.7% against 0.1% and lastly Unemployment rates expected to stay almost unchanged at 277k. The week will end on Friday with the news of PPI m/m, which measures a change in price of finished goods and services sold by producers, forecasted to show an expansion of 0.4% against a previous contraction of -0.4% and Prelim UoM Consumer Sentiment est. 91.3 vs. 90.7.
EU – Euro
Issues with the Greece continue. Tension rises as Greece missed last Fridays IMF payment of 300 million euros, bundling all of its four IMF payments together and postponing the entire repayment to 30th of June.
This week, apart from G7 summit, there will be no majorly important news for the Euro area.
UK – GBP
Brits have dilemma of their own. “Should the United Kingdom remain a member of the European Union?” Cameron rushes to stop Brexit to negotiate better terms and conditions for Britain’s membership, rather than exiting the 28-nation bloc. Most Brits want to stay in EU, shows the survey, as it pointed that: “British enthusiasm for leaving the EU has been declining ever since Cameron made his pledge.”
The only major fundamental news for the UK will be on Wednesday as Manufacturing Production m/m est. 0.1% against 0.4% and BOE Gov Carney speech, concerning interest rates, are due.
Canada – CAD
It would seem that crude oil has temporary stabilised. However, as OPEC has confirmed to maintain the production level at 30 million barrels daily for the upcoming six months, with the current oversupplied market, the made decision could weigh in on crude oil.
Important news for Canada will be on Monday – Building Permits m/m forecasted at 3.4% against previous of 11.6% and on Thursday – BOC Gov Poloz speech.
Australia – AUD
Fundamental week for Aussie start with NAB Business Confidence on Tuesday. Next, on Wednesday, RBA Gov Stevens speech is due. Lastly, on Thursday Australia’s Employment Change expected to show an improvement with 15.2k jobs added on the month of May from previous -2.9k and Unemployment Rate forecasted to remain unchanged at 6.2%.
On Sunday 7th industrialized nations begin a two-day meeting in Krun, Germany to discuss global economy and key issues regarding foreign, security and development policies. G7 summits are attended by leaders from 7 member states – Canada, Italy, France, Germany, Japan, the UK, and the US. The meetings are closed to the press but officials usually talk with reporters throughout the day, and a formal statement covering policy shifts and meeting objectives is usually released after the meetings have concluded. Both the comments and statement can create significant market volatility.
High volatility could be expected on Monday due to G7 summit. Follow-up of the event and caution should be taken.
EURUSD bullish set-up:
a break above 1.1140 will leave the price going 50 pips to TP of 1.119, SL 1.110
EURUSD bearish set-up:
a break below 1.1045 will move the market 45 pips to TP of 1.100, SL 1.108
GBPUSD bullish set-up:
a break above 1.530 will leave the bulls going 70 pips to TP of 1.537, SL 1.526
GBPUSD bearish set-up:
a break below 1.524 will move the bears 50 pips down to TP of 1.519, SL 1.527