Trading News to Watch Next Week (03-07 December 2018)

Hello, and welcome to our latest trading news release! Despite the year nearing its end, just a short glance at the list of upcoming events will convince anyone that the markets are not showing signs of slowing down anytime soon.

Here are some of the highlights for December 03-07 that we think will hold your attention hostage:

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  • BOC Rate Statement (CAD);
  • RBA Rate Statement (AUD);
  • Non-Farm Employment Change (USD)
  • OPEC meetings (all day on Thursday).

For the full list of high-impact events, please check out our detailed report below.

Monday, 03 December 2018

 

AUD – Building Approvals m/m – 1:30 am (Medium Impact)

Tracks the change in the number of new building approvals issued. The report is an excellent gauge of future construction activity because obtaining government approval is among the first steps in constructing a new building.

An actual change of 3.3% for the previous month underperformed vs. a 3.9% forecast.

AUD – Company Operating Profits q/q – 1:30 am (Medium Impact)

Shows the change in the total value of profits earned by corporations. The report acts as a leading indicator of economic health—businesses are quickly affected by market conditions, and changes in their earnings can be an early signal of future economic activity such as spending, hiring, and investment.

An actual value change of 2.0% for the previous quarter outperformed a 1.4% forecast.

GBP – Manufacturing PMI* – 10:30 am (High Impact)

Shows the level of a diffusion index based on a survey of about 600 purchasing managers asking respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

The PMI is a leading indicator of economic health—businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy;

Above 50.0 indicates industry expansion, while below that indicates contraction. An actual index value of 51.1 for the previous month greatly underperformed vs. a 53.0 forecast.

USD – ISM Manufacturing PMI – 4:00 pm (High Impact)

Measures the level of a diffusion index based on a survey of about 400 purchasing managers which asking respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

Above 50.0 indicates industry expansion, while below that indicates contraction. An actual index value of 57.7 for the previous month greatly underperformed vs. a 59.0 forecast.

Tuesday, 04 December 2018

 

AUD – Current Account – 1:30 am (Medium Impact)

Shows the difference in value between imported and exported goods, services, income flows, and unilateral transfers during the previous quarter.

The report is directly linked to currency demand—a rising surplus indicates that foreigners are buying more of the domestic currency to execute transactions in the country.

An actual value difference of -13.5B for the previous quarter failed to meet a -11.1B forecast.

AUD – Cash Rate – 4:30 am (High Impact)

Shows the interest rate charged on overnight loans between financial intermediaries. Short-term interest rates are the paramount factor in currency valuation—traders look at most other indicators merely to predict how rates will change in the future.

Last month, the interest rates remained unchanged at 1.50%, confirming a forecast of the same value.

AUD – RBA Rate Statement – 4:30 am (High Impact)

The statement is among the primary tools the RBA Reserve Bank Board uses to communicate with investors about monetary policy.

It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.

GBP – Construction PMI – 10:30 am (Medium Impact)

Tracks the level of a diffusion index based on a survey of about 170 purchasing managers asking respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

The PMI is leading indicator of economic health—businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.

Above 50.0 indicates industry expansion, while below that indicates contraction. An actual index value of 53.2 for the previous month outperformed a 52.0 forecast.

CAD – Labor Productivity q/q – 2:30 pm (Medium Impact)

Measures the change in labor efficiency when producing goods and services. Productivity and labor-related inflation are directly linked—a drop in a worker’s productivity is equivalent to a rise in their wage. When businesses pay more for labor the higher costs are usually passed on to the consumer.

An actual index value of 0.7% for the previous quarter slightly underperformed vs. a 0.5% forecast.

Wednesday, 05 December 2018

 

AUD – GDP q/q – 1:30 am (High Impact)

Shows the change in the inflation-adjusted value of all goods and services produced by the economy. The metric acts as the broadest measure of economic activity and the primary gauge of the economy’s health.

An actual value change of 0.9% for the previous quarter slightly topped a 0.7% forecast.

GBP – Services PMI – 10:30 am (High Impact)

Measures the level of a diffusion index based on a survey of purchasing managers asking respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

The PMI is a leading indicator of economic health—businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.

Above 50.0 indicates industry expansion, while below that indicates contraction. An actual index value of 52.2 for the previous month failed to meet a 53.4 forecast.

USD – ADP Non-Farm Employment Change – 2:15 pm (High Impact)

Shows the estimated change in the number of employed people during the previous month, excluding the farming industry and government. The growth estimates are based on payroll data derived from more than 23 million workers.

Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.

Last month, an actual employment change of 227K crushed a 188K forecast.

CAD – BOC Rate Statement – 4:00 pm (High Impact)

Bank of Canada rate statement

Source: DF Markets

The statement is the primary tool the BOC uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision.

Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.

CAD – Overnight Rate – 4:00 pm (High Impact)

Shows the interest rate at which major financial institutions borrow and lend overnight funds between themselves.

Short-term interest rates are the paramount factor in currency valuation—traders look at most other indicators merely to predict how rates will change in the future.

During the previous statement, the interest rate was hiked to 1.75% from 1.50%, confirming a forecast of the same value.

USD – ISM Non-Manufacturing PMI – 4:00 pm (High Impact)

Measures the level of a diffusion index based on surveyed purchasing managers, excluding the manufacturing industry. The survey included about 400 purchasing managers and asked respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

The PMI is a leading indicator of economic health—businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.

Above 50.0 indicates industry expansion, below indicates contraction. Last month, an actual index value of 60.3 outperformed a 59.3 forecast.

USD – Crude Oil Inventories – 4:30 pm (Medium Impact)

Shows the change in the number of barrels of crude oil held in inventory by commercial firms during the past week. It’s the primary gauge of supply and demand imbalances in the market, which can lead to changes in production levels and price volatility.

Last week, an actual barrel count of 3.6M was significantly higher than a 0.6M forecast.

Thursday, 06 December 2018

 

AUD – Retail Sales m/m – 1:30 am (High Impact)

Shows the change in the total value of sales at the retail level. It’s the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Last month, an actual change of 0.2% slightly underperforms vs. a 0.3% forecast.

AUD – Trade Balance – 1:30 am (Medium Impact)

Shows the difference in value between imported and exported goods and services during the reported month.

Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation’s exports. Export demand also impacts production and prices at domestic manufacturers.

Last month, an actual value difference of 3.02B crushed a 1.71B forecast.

All – OPEC Meetings – All Day (High Impact)

OPEC meetings

Source: DF Markets

OPEC meetings are usually held in Vienna and are attended by representatives from 15 oil-rich nations. They discuss a range of issues regarding energy markets and, most importantly, agree on how much oil they will produce.

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 released after the meetings have concluded.

OPEC nations represent around 40% of the world’s oil supply and are unified in their oil production levels. With so much control over oil’s supply-side, shifts in their production levels can have a significant impact on oil prices.

CAD – Trade Balance – 2:30 pm (High Impact)

Shows the difference in value between imported and exported goods during the reported month. Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation’s exports. Export demand also impacts production and prices at domestic manufacturers.

A positive number indicates that more goods were exported than imported. An actual value difference of -0.4B for the previous month underperformed vs. a 0.2B forecast.

Friday, 07 December 2018

 

CAD – Employment Change – 2:30 pm (High Impact)

Shows the change in the number of employed people during the previous month. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.

This is vital economic data released shortly after the month ends. The combination of importance and earliness makes for hefty market impacts.

An actual employment change of 11.2K for the previous month greatly underperformed vs. a 12.7K forecast.

CAD – Unemployment Rate – 2:30 pm (High Impact)

Shows the percentage of the total workforce that is unemployed and actively seeking employment during the previous month.

Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country’s monetary policy.

An actual value of 5.8% for the past month slightly beats a 5.9% forecast.

USD – Average Hourly Earnings m/m – 2:30 pm (High Impact)

Shows the change in the price businesses pay for labor, excluding the farming industry. This is a leading indicator of consumer inflation—when businesses pay more for labor the higher costs are usually passed on to the consumer.

An actual value of 0.2% for the past month confirms a forecast of the same value.

USD – Non-Farm Employment Change – 2:30 pm (High Impact)

Shows the change in the number of employed people during the previous month, excluding the farming industry. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.

This is vital economic data released shortly after the month ends. The combination of importance and earliness makes for hefty market impacts.

An actual employment change of 250K for the previous month crushed a 194K forecast.

USD – Unemployment Rate – 2:30 pm (High Impact)

Shows the percentage of the total workforce that is unemployed and actively seeking employment during the previous month.

Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country’s monetary policy.

An actual value of 3.7% for the past month confirms a forecast of the same value.

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Missed our previous report? Visit us here to catch up on last week’s top news. While you’re at it, don’t forget to also visit our Economic Calendar for extra details regarding each event.

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