Trading News to Watch Next Week (29 October – 02 November 2018)

Winter is coming and, with it, some of the busiest 5 days we’ve seen since the heat of summer. For instance, next week is the week when:

The Bank of Japan will release its monetary policy statement;

The Bank of England will present a summary of their own monetary policy;

BOE Gov Carney will hold a speech that could potentially spark volatility.

But we’re nowhere near the end of the list just yet. Discover what else is brewing on the global markets below.

***

Monday, 29 October 2018

 

EUR – German Retail Sales m/m – 29 Oct. – 02 Nov. (Medium Impact)

Shows the change in the total value of inflation-adjusted sales at the retail level, excluding automobiles and gas stations.

It’s the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

An actual value change of -0.1% underperforms vs. a 0.4% forecast.

EUR – EU Economic Forecasts – Tentative (Medium Impact)

This is a report that includes economic forecasts for EU member states over the next 2 years, and covers about 180 variables.

The forecasts serve as the European Commission’s basis for evaluating economic performance and trends of EU member states in regard to potential austerity measures and other forced spending cuts.

USD – Personal Spending m/m – 1:30 pm (Medium Impact)

Monitors the change in the inflation-adjusted value of all expenditures by consumers. Consumer spending accounts for a majority of overall economic activity.

It’s one of the most important gauges of economic health due to the vast ripple effect consumer buying creates in the economy.

An actual value change of 0.3% confirms a forecast of the same value.

Tuesday, 30 October 2018

 

EUR – Prelim Flash GDP q/q – 11:00 am (Medium Impact)

Tracks the change in the inflation-adjusted value of all goods and services produced by the economy.

This metric serves as the broadest measure of economic activity and the primary gauge of the economy’s health.

An actual value change of 0.3% is just shy of reaching a 0.4% forecast.

USD – CB Consumer Confidence – 3:00 pm (High Impact)

Shows the level of a composite index based on a survey of about 5 000 surveyed households where respondents are asked to rate the relative level of current and future economic conditions including labor availability, business conditions, and the overall economic situation.

Wednesday, 31 October 2018

 

AUD – CPI q/q – 1:30 am (High Impact)

The CPI index* tracks the change in the price of goods and services purchased by consumers. Consumer prices account for a majority of overall inflation.

Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.

An actual price change of 0.4% is just shy of reaching a 0.5% forecast.

*CPI – Consumer Price Index

AUD – Trimmed Mean CPI q/q – 1:30 am (High Impact)

Denotes the change in the price of goods and services purchased by consumers, excluding the most volatile 30% of items. Consumer prices account for a majority of overall inflation.

Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.

An actual price change of 0.5% confirms a forecast of the same value.

JPY – BOJ Policy Rate – Tentative (High Impact)

Shows the interest rate levied on excess current account balances held at the BOJ*. During this event, the BOJ Policy Board members come to a consensus on where to set the rate.

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.

An actual price change of -0.10% confirms a forecast of the same value.

*BOJ – Bank of Japan

JPY – Monetary Policy Statement – Tentative (High Impact)

The statement is among the primary tools the BOJ uses to communicate with investors about monetary policy.

It contains the outcome of their decision on asset purchases and commentary about the economic conditions that influenced their decision. Most importantly, it projects the economic outlook and offers clues on the outcome of future votes.

JPY – BOJ Outlook Report – Tentative (High Impact)

The report provides valuable insight into the bank’s view of economic conditions and inflation—the key factors that will shape the future of monetary policy.

JPY – BOJ Press Conference – Tentative (High Impact)

The press conference is among the primary methods the BOJ uses to communicate with investors regarding monetary policy.

It covers the factors that affected the most recent interest rate decision, the overall economic outlook, inflation, and clues regarding future monetary policy.

USD – ADP Non-Farm Employment Change – 1:15 pm (High Impact)

Shows the estimated change in the number of employed people during the previous month, excluding the farming industry and government.

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

An actual number of 230K employed people crushes a 185K forecast.

CAD – GDP m/m – 1:30 pm (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 an actual value change of 0.2% slightly exceeds a 0.1% forecast.

Thursday, 01 November 2018

 

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

The PMI* index tracks the level of a diffusion index based on survey of about 600 purchasing managers in the manufacturing industry which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

It’s 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 value of 53.8 beats a 52.6 forecast.

*PMI – Purchasing Managers’ Index

GBP – BOE Inflation Report – 1:00 pm (High Impact)

This report provides the BOE’s projection for inflation and economic growth over the next 2 years. The BOE* Governor also holds a press conference to discuss the report’s contents after release.

It provides valuable insight into the bank’s view of economic conditions and inflation—the key factors that will shape the future of monetary policy and influence their interest rate decisions.

BOE* – Bank of England

GBP – MPC Official Bank Rate Votes – 1:00 pm (High Impact)

The vote is reported in an ‘X-X-X’ format—the first number is how many MPC members voted to increase interest rates, the second number is how many voted to decrease rates, and the third is how many voted to hold rates.

The BOE’s MPC* meeting minutes contain the interest rate vote for each MPC member during the most recent meeting.

The breakdown of votes provides insight into which members are changing their stance on interest rates and how close the committee is to enacting a rate change in the future.

An an actual vote of 0-0-9 confirms a forecast of the same value.

*MPC – Monetary Policy Committee

GBP – Monetary Policy Summary – 1:00 pm (High Impact)

Source: DF Markets

This summary is among the primary tools the MPC uses to communicate with investors about monetary policy.

It contains the outcome of their vote on interest rates and other policy measures, along with commentary about the economic conditions that influenced their votes.

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

GBP – Official Bank Rate – 1:00 pm (High Impact)

Reveals the interest rate at which the BOE will lend to financial institutions overnight. MPC members vote on where to set the rate.

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.

An actual interest rate of 0.75% confirms a forecast of the same value.

GBP – BOE Gov Carney Speaks – 1:30 pm (High Impact)

As head of the central bank, which controls short term interest rates, BOE Governor Mark Carney has more influence over the nation’s currency value than any other person.

Traders scrutinise his public engagements as they are often used to drop subtle clues regarding future monetary policy.Volatility is often experienced during his speeches as traders attempt to decipher interest rate clues.

USD – ISM* Manufacturing PMI – 3:00 pm (High Impact)

The PMI index tracks the level of a diffusion index based a survey of about 400 purchasing managers in the manufacturing industry which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

It’s 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.

*ISM – The Institute for Supply Management

Above 50.0 indicates industry expansion, while below that indicates contraction. An actual value of 59.8 slightly dips below a 60.1 forecast.

Friday, 02 November 2018

 

NZD – ANZ Business Confidence – 1:00 am (High Impact)

Shows the level of a diffusion index based on survey of 1 500 manufacturers, builders, retailers, agricultural firms, and service providers which asks respondents to rate the relative 12-month economic outlook.

The report is a leading indicator of economic health—businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment.

Above 0.0 indicates optimism, while below that indicates pessimism. An actual value of -38.3 for September crushes a performance of -50.3 for August.

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.

An actual value of 0.3% confirms aforecast of the same value.

CAD – Employment Change – 1:30 pm (High Impact)

Tracks 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.

An actual difference of 63.3K crushes a forecast of 25.0K.

CAD – Trade Balance – 1:30 pm (High Impact)

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

A positive number indicates that more goods were exported than imported. An actual difference of 0.5B confirms a forecast of the same value.

CAD – Unemployment Rate – 1:30 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.

An actual unemployment rate of 5.9% confirms a forecast of the same value.

USD – Average Hourly Earnings m/m – 1:30 pm (High Impact)

Shows the change in the price businesses pay for labor, excluding the farming industry.

The report 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 price change of 0.3% confirms a forecast of the same value.

USD – Non-Farm Employment Change – 1:30 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.

An actual change of 134K starkly underperforms vs. a 185K forecast.

USD – Unemployment Rate – 1:30 pm (High Impact)

Denotes 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 unemployment rate of 3.7% is just shy of reaching a 3.8% forecast.

***

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.

Wish to test out your trading strategies without suffering real-life financial losses? Create a DF Trader demo account today to take advantage of real-time market data and a virtual wallet of €10 000.