Market Preview – Mar 29th to Apr 3rd

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The Week Ahead: With global markets re-opening following the Easter break, the early part of the week will be relatively quiet on the economic data front. Local data in Australia this week is minimal with new home sales and commodity price figures likely to draw most attention. New Zealand building consents and business confidence data will also be the local highlights across the Tasman.

That being said, the short week will still provide significant data releases and key speeches around the world. These are likely to have significant impact on both the AUD and NZD’s short term prospects in particular. Key amongst the speeches wil be US Fed Chair Yellen’s speech in the early hours of Wednesday morning (AEST). A number of Fed members, most notably St Louis fed President Bullard,  have in recent days suggested that both the April and June FOMC Meetings could see a move made by the Fed with the caveat as always that it will need to be data driven.

Yellen’s speech will, however, be forensically examined for any hint of timing for the next Fed rate rise. Inflation and the Fed’s preferred measure of Personal Consumption Expenditure (PCE) will be key drivers of any rate rise talk. Core PCE data released in the US on Monday came in at 0.1% increase, below expectations and last month’s 0.3% increase. Monthly employment data late this week will also be of significant interest to the market (more than 200k new jobs are expected to be reported) alongside average earnings figures but is unlikely to provide in its own right any significant insight into the timing of the Fed’s likely next move. Manufacturing data rounds out the US data week.

With the new month kicking in on Friday Chinese manufacturing data will again be anxiously awaited with any sign of green shoots likely to be pounced upon. This data will have excised the impact of the Chinese New Year holiday that may have coloured last month’s figure. European manufacturing data will also be released on Friday with the largest economies in the region and the euro zone as a whole reporting. Price data across the euro zone will also draw significant attention on Thursday with particular focus on the ECB’s recent decisions and action designed to ward off deflation coming into ever-sharper focus.

Thursday will also be a significant day for British data as well as a speech by Bank of England Governor Carney. Consumer confidence and GDP data will bookend Carney’s speech with mortgage approvals and business investment also following. House price data and manufacturing PMI closes out the data week in the UK. No doubt the Brexit debate will also continue to dominate the British political and economic landscape this week with data likely to be viewed and dissected through this prism.

Regards All.
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