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Slew of Economic Data-Points To Offer Busy Week Ahead


The US Dollar Index (I.USDX) maintained its up-move for the second consecutive week in May after upbeat data-points rejuvenated speculations of the Fed-rate hike. The flow of optimist numbers started with Tuesday's JOLTS Job openings which rallied to highest levels since the year 2000 while eleven month highs by Core Retail Sales and PPI, together with the two year high Retail Sales, pumped additional strength into the greenback. The EUR remained weaker with not so hawkish data-points, including the Flash GDP, while dovish tone of the BoE, coupled with a cut of GDP forecast and concerns for the Brexit, dragged the GBP towards south. The JPY registered across the board weakness as Japanese policy makers remained worried about currency's recent gains and said to take measures, if needed, while AUD and NZD remained sluggish with downbeat data-points and pessimist outlook of the RBNZ Financial Stability report. Further, the Crude prices maintained their up-move as growing concerns over the recent Canadian wildfire might hurt the near-term Crude output, together with surprise decline in US stockpile and Goldman Sachs' bullish forecast for the energy product, favored its rise towards fresh highs in six months.

Considering recently published hawkish US data-points, this week's FOMC meeting minutes and monthly release of US CPI would gain major market attention while Inflation numbers from UK, Canada, New-Zealand and Europe, coupled with UK and Australian job numbers, are some other details that could continue propelling market volatility. Moreover, Japan's Preliminary GDP and UK Retail Sales will provide additional data-burden on the participants to observe.

US CPI and FOMC Meeting Minutes Will Be Decisive For The USD

Even if the last week's US numbers renewed speculations that the Federal Reserve might not refrain from its two rate-hike a year plan, the April month CPI, followed by minutes of recently concluded FOMC minutes, become decisive to forecast near-term USD trend as both these details can hint for the central banker's action during June meeting.

While the March month CPI number rallied to five month highs of +0.1%, forecasts relating to April CPI figure, scheduled for Tuesday release, indicate that the US inflation rallied to the highest levels in eleven month to 0.4%. Additionally, the Core CPI is also likely to mark +0.2% print against its +0.1% prior. Moving on to another important US event of the week, the minutes of April FOMC meeting, up for Wednesday, wherein the US monetary policy makers opted for no change in their benchmark interest-rate; however, they downplayed previously released weaker data-points and cited improvement in macro economics.

Further, Manufacturing indices from Empire State and Philly Fed, scheduled for Monday and Thursday respectively, together with the Tuesday's Housing Starts and the Existing Home Sales, to be released on Friday, are some other data-points that can help better analyze the USD moves. While Empire State Manufacturing Index is likely to soften a bit to 7.2 from 9.6 prior, the Philly Fed gauge is expected to reverse its prior decline of -1.6 with +3.2 mark. Moving on, the housing details are signaling overall improvement with Housing Starts expected to mark 1.12M against 1.09 prior and the Existing Home Sales likely printing two month high of 5.39M versus 5.33M previous release.

Having looked at the recently published optimistic details, sustained improvement in US inflation scenario, coupled with hawkish tone of the minutes, might favor the chances of Fed's rate-hike in coming meetings, which in-turn can strengthen the US Dollar's present up-move. Moreover, strong Housing and Manufacturing numbers also indicates the greenback's near-term upward trajectory.

GBP Traders Shouldn't Miss UK Job Numbers, Retail Sales And CPI

Although the Bank of England (BoE) recently downgraded the growth forecasts and spread worries for the "Brexit", which dragged the GBP down, the central banker revised up its near-term inflation forecast and said that the price gauge might surpass the expectations in near two year's time. Hence, an upbeat CPI print in the Tuesday's release, against the unchanged +0.5% forecast, can help the British currency to stop in running downside. Further, Wednesday's Job numbers, namely the Average Earnings, Claimant Count and Unemployment Rate, followed by the UK Retail Sales, on Thursday, are some additional data-points that could help foresee near-term moves of the GBP. Looking at the forecasts, the Earnings are expected to slowed-down to the lowest level in a year, with +1.7% growth against +1.8% prior, while the Claimant Count Change is likely softened with 4.1K as compared to 6.7K prior and the Unemployment rate bears the consensus to remain stagnant at 5.1%. Furthermore, the April month Retail Sales, is likely reversing its prior -1.3% drop with +0.7% mark.

As global leaders are favoring more of the "Bremain" than the "Brexit" an improvement in inflation figures, coupled with upbeat job numbers and Retail Sales, can help the British currency reverse some of its recent losses.

Australian Monetary Policy Meeting Minutes & Job Numbers For the Aussie To Observe

Following a surprise drop in inflation mark and a cut in benchmark interest-rate by the Reserve Bank of Australia (RBA), the Australian Dollar (also known as Aussie) dropped heavily against majority of its counterparts. However, market players would concentrate on this week's minutes of the recent monetary policy, scheduled for Tuesday, and the monthly Employment Change and Unemployment Rate, up for Thursday, in order to predict upcoming moves of the Australian Dollar. The consensus signal that the Unemployment rate inched up to 5.8% from 5.7% prior and the Employment Change dropped with 12.3K against 26.1K registered during the previous month. Hence, downbeat labor market numbers, coupled with dovish outcomes from the recently concluded meeting, wherein the central bank cut down its interest-rate, can become reasons for the Aussie to extend its south-run.

Inflation numbers from New-Zealand, EU And Canada, Together with Japanese GDP Are The Remaining Important Data-Points

In addition to the aforementioned headline details, inflation numbers from EU, Canada and the New-Zealand, coupled with the Canadian Retail Sales and Japanese Prelim GDP, are some other details that could continue fueling this week's market moves.

To start with Tuesday's quarterly New-Zealand Inflation expectations is an important data-point for the NZD after the RBNZ recently sound dovish during its bi-annual policy report. Given the inflation forecasting gauge dips below its record low of 1.6%, chances of the RBNZ's another interest-rate cut, together with NZD downside, can't be denied.

On Wednesday, the EU is scheduled to release Final version of April month CPI. As the Flash reading suggested the inflation gauge dipped to -0.2% and the forecast indicate it to be the final reading, an actual outcome near/below the same could weaken the EUR further towards south.

Moving on, the Preliminary reading of Q1 2016 Japanese GDP, is scheduled for publish on Wednesday. The growth number is expected to reverse its prior -0.3% drop with +0.1% mark. However, market speculations favor another negative print, which if happen, can force the Bank of Japan to introduce another round of monetary easing, that would result into additional downside by the Japanese Yen.

Canadian CPI and Retail Sales, up for Friday, becomes the last reading of second-tier data-points. The CPI is likely softened to +0.4% mark against +0.6% prior while the Core CPI grew at +0.2% mark versus +0.7% previous. Also, the Retail Sales is also likely flashing negative signals for the CAD with -0.7% mark compared to +0.4% prior and the Core Retail Sales are likely dropped with -0.4% loss against +0.2% marked in the prior month. Hence, with the Canadian economy still finding it hard to reimburse losses from recent wildfire, weaker prints of scheduled details can magnify further south-run of the Loonie, as the Canadian Dollar is nicknamed.

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Source: https://www.mtrading.com/analytics/fundamental-analysis/slew-of-economic-data-points-to-offer-busy-week-ahead
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