FX Week Ahead: US Payrolls, ECB meeting minutes

The markets open a new trading week and a fresh quarter. The focus will be on the monthly economic reports and indicators. Data from the US will be dominating the newswires, for the most part, this week. Among the central bank meetings, the RBA’s meeting is coming up this week, and no changes to interest rates are expected.

From the Eurozone, the focus turns to the ECB’s monetary policy meeting minutes which could offer traders some insights into the central bank’s decision later this October. Here is a brief recap of the main events that will shape the currency markets this week.
Busy week for the US dollar

The week ahead will be dominated by the economic reports from the United States. Among the releases lined up, the ISM’s manufacturing PMI and Friday’s official payrolls data stand out. The economic releases will cover the period of September. It was a weak month with the hurricanes seen making an impressionable impact on the economy.

The Federal Reserve had already prepared the markets about the potential impact from the hurricanes which is expected to hit jobs and growth in the economy. Based on this, it is not surprising to note that the US payrolls report forecast is one that is below the trend.

According to the economists polled, the US economy is expected to add a meager 88k jobs in the month of September. However, on the bright side, the unemployment rate is expected to remain steady at 4.4%. But there is a scope that the unemployment rate could also increase. Manufacturing payrolls are however expected to rise just 8k for the month of September.

Economists are hoping that the wages for September will rise 0.3% on the month.

Besides the Friday’s payrolls report, the ISM’s manufacturing PMI will also be coming out earlier on Monday. According to the median estimates, manufacturing PMI in the US is expected to slip modestly to 58.0, down from 58.8 seen the month before. Markit’s manufacturing PMI is however expected to remain steady at 53.0 for September.

Overall, the economic data from the US could potentially help to bring more conviction about the Fed’s plans to hike interest rates one more time. The probability of a rate hike for the remainder of the year continues to increase following the Fed’s forward guidance at its meeting in September.


Read more: https://www.orbex.com/blog/2017/10/fx-week-ahead-us-payrolls-ecb-meeting-minutes

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