Weekly preview: RBA interest rate meeting and U.S. non-farm employment data come into focus

Source: FinanceFeeds 2019-12-03

AxiTrader's senior market analyst said that the euro fell slightly last week as a large amount of PMI data in the euro area showed that manufacturing weakness may be spreading to the services sector.

In this guest editorial, AxiTrader 's management team focuses on the analysis of the importance of retail transactions, centered on the US NFP

USD: USD is supported by domestic data, ISM manufacturing PMI and NFPR
Sterling: British Election
Japanese yen: Bank of Japan says yen boosted by buying in tension with Japanese government bonds
Euro: Eurozone manufacturing and services PMI, retail sales, GDP, industrial production and employment data
AUD and NZD: Sino-U.S. Trade talks remain main focus and could weaken impact of positive data release
Canadian Dollar: Upcoming Purchasing Managers' Index and Interest Rate Decision of the People's Bank of China

Currency: USD

The US dollar rose slightly last week as US data rose. U.S. data includes preliminary durable goods orders for October, which increased by 0.6%, while the expected value was -0.9%; non-defense capital orders increased by 1.2%, and the expected value was -0.2%.

In addition, the US third quarter gross domestic product (GDP) was also raised to + 2.1%, higher than the expected + 1.9%. On the trade front, U.S. President Trump signed the bill to support Hong Kong demonstrators, leading to an immediate shift in market sentiment. The dollar also benefits from risk aversion. This week we will get the ISM manufacturing PMI and two work reports. If both reports can be successfully published, we can further support the US dollar.

Currency: British Pound

The sterling was able to maintain its gains as the market remained optimistic about the pound, as a recent YouGov poll showed that the Conservative Party is likely to win the election, which has helped the pound rise. In the future, investors will pay close attention to manufacturing purchasing managers' indexes and retail sales data, although any impact may be short-lived because the focus remains on the results of Brexit and the upcoming general election.

Currency: Euro

The euro fell slightly last week as a large amount of PMI data in the euro area suggests that manufacturing weakness may be spreading to the services sector, and speculation that the European Central Bank is about to relax further easing has increased.

In the future, investors will pay close attention to the euro area's manufacturing and services purchasing managers' index, retail sales, GDP, industrial production and employment, and the currency may continue its downward trend.

Currency: Japanese Yen

The yen was also seen as a safe haven after Trump signed a bill to support Hong Kong demonstrators, leading to an immediate shift in market sentiment. The yen also had problems after the Hong Kong bill intensified trade tensions.

Within Japan, the Bank of Japan member Sakurai warned that if Japan's economy continues to weaken, it is necessary to prepare for further easing. But after all, the yen may follow trade news in the short term. If the Hong Kong bill provokes more confusion, the yen may rise further.

Currency: Australian Dollar

The Australian dollar was lower last week. In light of the mixed data released last week in Australia. Together with a speech from the Reserve Bank of Australia Governor last week, it was mentioned that the Reserve Bank of Australia has flexible market operations to ensure sufficient liquidity and the possibility of negative interest rates is extremely small.

The fall in the Australian dollar is likely to be the result of Sino-U.S. Trade talks affected by US President Trump, which may have hurt trade talks by signing the Hong Kong Bill of Rights. The Australian dollar has been a heavy week for the Australian dollar, including RBA interest rate decisions, GDP data and retail sales data. Good data will strengthen the Australian dollar unless further adverse developments occur in the China-US trade talks.

Currency: New Zealand dollar

The Reserve Bank of New Zealand strengthened slightly last week as the Reserve Bank of New Zealand Governor Adrian Orr mentioned that the Reserve Bank of New Zealand is committed to enhancing the long-term resilience of the financial system. In addition, domestic data such as trade balance, business confidence and consensus reached better than expected.

The limited appreciation is likely due to the close relationship between the New Zealand dollar and the Australian dollar. Although this week will be an easy week for the New Zealand dollar to release economic data, investors should continue to pay attention to the developments brought about by the China-US trade talks. Better-than-expected numbers will continue to drive the New Zealand dollar higher.

Currency: Canadian Dollar

Last week, most of the Civil Aviation Department organized sideways. However, late on Friday, Canada's GDP data was the same as the previous announcement. Although this is not negative news, the signal is that domestically, Canada's economy has slowed significantly.

This resulted in a temporary weakening of CAD. This week, we have both BOC interest rate decisions and the Ivey PMI index. We do not expect the interest rate decision to change, and the lateral shock is likely to continue into this week.

AxiTrader

Weekly preview: RBA interest rate meeting and U.S. non-farm employment data come into focus

Subscribe to Our Newsletter!

Subscribe to Our Newsletter!