Welcome to the weekly outlook starting this Monday, Jan. 30. We’ll be looking at the week’s key economic events on the financial calendar covering Monday to Thursday. Be sure to catch up with our Friday morning report that looks back at how the events played out and with a look at Friday’s events. This week is a busy one for the global markets as key central bank announcements are due from Japan, Canada, Eurozone and the UK. And as per schedule, the first Friday of the month, sees the influential NFP report.
Event: Japan Interest Rate Decision
Date: Tuesday 31 January 2017 at 02:00 GMT
Markets affected: EUR/JPY, JPY/USD
Trending hashtags: #yen, #japaninterestrate
The Bank of Japan’s interest rate decision is not expected to see many changes this month. It is currently set at –0.1% and analysts are not forecasting any change to that. At last December’s meeting the BOJ said it would continue its asset purchase programme of ¥6 trillion a year. Last October saw consumer prices rise for the first time in nine months though core inflation took a dip along with exports.
Event: EU Gross Domestic Product (preliminary data)
Date: Tuesday 31 January 2016 at 10:00 GMT
Markets affected: EUR/GBP, GBP/USD
Trending hashtags: #eu , #eugdp
It was a volatile year for the Eurozone with the migrant crisis, Brexit, rise in populist movements across the continent and the US election of Donald Trump. Moderate economic recovery continues in 2016 with Q2 and Q3 showing 0.3% growth and Q1 showing 0.5% expansion. Improvements in employment, low inflation and loose monetary policy have all contributed to mild growth. Analysts are expecting preliminary data to follow suit with modest gains of 0.5% for the quarter and 1.7% year-on-year change.
Event: Canadian GDP data
Date: Tuesday 31 January 2017 at 13:30 GMT
Markets affected: CAD/USD
Trending hashtags: #cad, #gdp
The Canadian economy contracted by 0.3% last October due to production decreases and sluggish business sentiment. The Governor of the Bank of Canada, Stephen Poloz, had been hoping on non-energy exports to pick up the pace since the crash of commodities in 2014, but Manufacturing saw a 2% fall, the biggest decline for 3 years. Services expanded 0.1% in October, as did Retail at 0.7% and wholesale trade at 0.6%. The previous month’s reading came in at a disappointing -0.3%.
Event: US ISM Manufacturing PMI
Date: Wednesday 01 February 2017 at 15:00 GMT
Markets affected: EUR/USD
Trending hashtags: #usd, #manufacturing
December saw the ISM Manufacturing Index increase by 1.5 points, the best it’s been for the last two years. It outstripped economists as it came in at a healthy 54.7 points. Production, Employment and Export Orders were all up showing a vigorous start to 2017. Expectations for January are positive with expectations at 54.5 points.
Event: US FED Interest Rate Decision
Date: Wednesday 01 February 2017 at 19:00 GMT
Markets affected: EUR/USD
Trending hashtags: #usd, #interestrate
Last December saw the first interest rate hike by the Federal Reserve for the year and the second for the decade. They increased rates 25 basis points from 0.50 to 0.75%. The committee signalled a following three rate hikes for 2017 and they are expected to withdraw monetary support as President Trump pledged to cut corporate taxes and to invest in infrastructure. This is expected to spur growth and inflation as company earnings increase. The US dollar has been on the up since the US election and Wednesday’s announcements may see more action for the greenback.
Event: UK Bank of England Interest Rate Decision
Date: Thursday 02 February 2017 at 12:00 GMT
Markets affected: EUR/GBP, GBP/USA
Trending hashtags: #gbp, #ukinterestrate
So far the Bank of England (BOE) has kept rates unchanged at 0.25% though sent out warnings that as the economy has been supported by consumer spending, inflation and low wage growth may impact household budgets in 2017. The central bank is willing to tighten or loosen monetary policy based on how the economy develops over the year. For this announcement, analysts are not expecting any changes.
Event: US Non-Farm Payrolls
Date: Friday 03 February 2017 at 13:30 GMT
Markets affected: EUR/USD
Trending hashtags: #usd, #nfp
December’s NFP result came in under expectations at a 156,000 increase in jobs. The disappointing result was lifted by a leap in wages with average earnings increasing by 10 cents to the hour. The wage figure points towards a healthy labour market and analysts are expecting January’s jobs figure to come in at 170,000 with wages projected to increase 0.3% and unemployment to remain constant at 4.7%.
Key Event Calendar Links
http://www.tradingeconomics.com/japan/interest-rate
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/dsbbcan-eng.htm
http://www.focus-economics.com/regions/euro-area
https://www.instituteforsupplymanagement.org/ismreport/mfgrob.cfm?SSO=1
http://www.bankofengland.co.uk/monetarypolicy/Pages/decisions.aspx
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