Weekly Outlook: Nov 30 - Dec 04

This week’s agenda includes the last Non-Farm Payrolls report before December’s Fed’s rate decision on Friday, as well as the awaited ECB Policy Meeting on Thursday. The European Central Bank is expected to further cut its already negative deposit rate, closely watched by Europe, as Fed prepares to for a historical rate hike. In October, the US economy added 271,000 jobs, a 10-month high while in November is expected to have added 200,000.

The markets are expected to remain quiet and probably we will observe a range trading among most USD related Forex pairs at the start of the week. However, Fed Yellen speech on Wednesday after the ADP Employment Change and Friday’s data are likely to rapidly increase the volatility as a number above 200k non-farm added jobs would be a strong sign that the rates will be hiked by 25bps and should provoke a short-term rally for the greenback.

[B]Monday [/B]will be quiet in terms of economic releases. A slight increase in the volatility may be observed when UK Mortgage Approvals will be released. The preliminary German inflation rate for November is forecasted the consumer prices to have picked-up on a slightly steeper pace than before. In US, the Chicago Purchasing Managers Index and Pending Home Sales are coming out. Later in the day, in Australia, the AiG Performance of Manufacturing Index for November will be posted alongside with October’s Building Permits. During the night, the [B]Bank of Japan Governor Kuroda will give a speech[/B]. The[B] Reserve Bank of Australia has a policy meeting[/B] to update their decision regarding the interest rate. A rate statement will be published, however, no changes are expected to the monetary policy.

[B]Tuesday [/B]may be volatile for the single currency. The Eurozone is going to release November’s Markit Manufacturing PMI figures and the Unemployment rates for Germany and Eurozone as a whole. Eurozone’s unemployment rate is predicted to remain at 10.8% and Germany’s at 6.4%. The Manufacturing PMIs are also expected to meet the preliminary numbers.

In UK, the[B] Bank of England Governor Mark Carney will have a speech[/B] a while before the release of the Markit Manufacturing PMI for November which is expected to show that the sector has expanded less than the month before, 54.0 expected vs 55.5 prior. During the US session, the Canada is going to release the GDP numbers for September and the RBC Manufacturing PMI. In [B]New Zealand, the Global Dairy Trade Price Index[/B] will be released, expected to have a direct impact on the New Zealand dollar. Last time, on November 17, the index hit the largest decrease since August, of -7.9%. In US, the ISM and the Markit Manufacturing PMIs, as well as the Construction Spending for October, will be out. All of them are expected to show a slight slowdown. Overnight, Australia scheduled to release GDP numbers on a yearly and quarterly basis. The annualized indicator is expected to show a growth of 2.3% versus 2.0% before, while the quarter over quarter 0.7% from 0.2%. If such numbers come out, the Australian dollar is probably to rally upwards.

On [B]Wednesday[/B], during the European Session, Germany is going to provide a Retail Sales report as well as the [B]Eurozone will release the preliminary Consumer Price Index [/B]and Producer Price Index figures. Most likely the inflation indicators will show no increase. On a yearly basis, the inflation rate is expected to show a small increase by 0.2% from 0.1% the previous month while the producer prices are expected to show a larger decrease than before. Going forward, the Bank of Canada will announce its interest rate decision alongside with a rate statement. In US, the [B]ADP Non-farm Employment Change[/B] will be closely eyed for cues about Friday’s Non-Farm Payroll report. The [B]Fed Chair Janet Yellen will have a press conference [/B]in Washington regarding the Economic Outlook.

[B]Thursday[/B] is a PMI day and we will see Italy, France, Germany and England to release their Markit Services PMI figures. These will be followed by Eurozone Retail Sales report for October and the awaited [B]ECB Policy meeting and the Monetary Policy Statement accompanied by a press conference.[/B] The central bank is expected to ease further the monetary policy, by cutting further the already negative deposit rate or by expanding the Quantitative Easing programme. During the US session, the Initial and Continuing Jobless Claims will be monitored. [B]Fed Chair Janet Yellen will testify[/B], a day before the NFP report. The market will hang on every word to decipher if Fed policymakers changed their hawkish stance. The Markit Services PMI for November, the ISM Non-Manufacturing Index, as well as Factory Orders, will be released.

[B]Friday [/B]will be the most volatile day during the trading week and this will be because of the US NFP Report. It will be the last employment report before the Decembers Fed’s rate decision so the figures are very important and will affect all the USD related pairs as well as the US stock indices.

The [B]Canadian employment report [/B]is also coming out but will be overshadowed by US report again. The unemployment rate is expected to remain unchanged while the economy is forecasted to have added 0.7k jobs in November from 44.4k in October.