FOREX Outlook: November 8-12
By Ilian Yotov, AllThingsForex
With the Fed’s interest rate announcement and the U.S. employment report in the rearview mirror, the week ahead will see the focus shifting from the U.S. to economic activity and growth in the Euro-zone, the U.K. and China.
In preparation for the new trading week, here is a list of the Top 10 spotlight economic events that will move the markets around the globe.
1. EUR- Germany Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities, Mon., Nov. 8, 7:00 am, ET.
The engine of economic growth in the Euro-zone is forecast to slow down with industrial activity rising by a smaller 0.5% m/m, compared with the previous increase of 1.7% m/m.
2. GBP- U.K. Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities, Tues., Nov. 9, 5:30 am, ET.
The U.K. manufacturing sector is forecast to show another month of growth by 0.4% m/m from 0.3% m/m in the previous month.
3. NZD- Reserve Bank of New Zealand Financial Stability Report, an assessment on current and future economic conditions and inflation, Tues., Nov. 9, 4:00 pm, ET.
It would be interesting to see if expectations of rising inflationary pressures were the reason why the RBNZ officials kept the door open to a potential hike at their December meeting or into Q1 2011.
4. GBP- Bank of England Inflation Report, the central bank’s official assessment on current economic conditions, inflationary pressures and future inflation expectations, Wed., Nov. 10, 6:30 am, ET.
In the latest inflation report, the Bank of England’s forecast was for a gradual decline in inflationary pressures. However, the U.K. inflation has remained stubbornly above the bank’s 3.0% ceiling. With the recent U.K. economic data surprisingly strong, if the outlook on inflation gets a higher revision, the Monetary Policy Committee members could steer further away from quantitative easing and expansion of the bank’s Asset Purchase Program.
5. USD- U.S. Jobless Claims, an important gauge of employment trends and labor market conditions, and U.S. Trade Balance of the difference between imports and exports, Wed., Nov. 10, 8:30 am, ET.
In the last few weeks, applications for U.S. unemployment benefits have shown a steady decline and another drop below 450,000 would be a welcomed sign of consistent improvement. The trade deficit is expected to shrink to 45.4 B from 46.3 B with the help of the weak U.S. dollar.
6. AUD- Australia Employment Situation and Unemployment Rate, the main gauges of employment trends and labor market conditions, Wed., Nov. 10, 8:30 pm, ET.
The Australian economy enjoys a strong labor market and, although jobs creation could slow to 20.3K jobs in October from 49.5K in September, the unemployment rate could inch lower to 5.0% from 5.1%.
7. CNY- China CPI- Consumer Price Index, the main measure of inflation, and Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities, Wed., Nov. 10, 10:00 pm, ET.
Rising inflationary pressures in China could prompt additional rate hikes by the country’s central bank as consumer inflation is expected to increase to 4.1% y/y from 3.6% y/y in the previous month. Industrial activity could continue to drive the world’s fastest-growing economy with an increase of 13.6% from a previous reading of 13.3%.
8. EUR- Euro-zone GDP- Gross Domestic Product, the main measure of economic activity and growth, Fri., Nov. 12, 6:00 am, ET.
The preliminary estimate of the Euro-zone Q3 GDP is forecast to reveal that the Euro-zone economy grew at a slower pace of 0.4% q/q in the third quarter compared with the 1.0% q/q growth in Q2 2010.
9. USD- U.S. Consumer Sentiment, the University of Michigan’s monthly survey of 500 households on their financial conditions and outlook of the economy, Fri., Nov. 12, 9:55 am, ET.
After a brief pullback, the trend of improvement in the U.S. consumer sentiment could resume with a reading of 69.0, up from 67.7 in the previous month.
10. USD- G20 Meeting of finance ministers and central bankers from the 20 most-developed industrialized nations, Fri., Nov. 12, all day.
Traders will pay close attention to any statements or agreements that may be reached during the G20 meeting on the threat of “currency wars” and currency devaluation.
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