• RBNZ Rate Decision – March 10, 20:00 GMT
The RBNZ is expected to keep rates on hold at 2.50% and if policy makers re-commit to leaving monetary policy unchanged until the middle of the year we could see a bearish reaction from the “kiwi
”. The RBA, New Zealand’s antipode counterpart, raised their target rate for a fourth time last week. Earlier hikes have raised the outlook for RBNZ tightening, but we have seen Overnight index swaps go from pricing in 191 bps of hikes to 140 bps since the beginning of February. Therefore, a dovish statement from New Zealand policy makers may not generate a substantial reaction but does hold the potential to weigh on “kiwi” sentiment.
• Australian Employment Change (FEB) – March 11, 00:30 GMT
Forecasts are for the Australian economy to have added jobs in February, for a sixth straight month. The 15,000 that is expected would be the smallest gain over the period which could be a sign that the central bank’s tightening is beginning to curb growth. Following the RBA rate hike last week there may be limited upside potential for the Aussie
following a positive employment report as tightening is a clear sign that the economy is experiencing significant growth. However, a downside surprise or job loss could weigh on the antipode currency as it would dim the outlook for interest rates.
• SNB Rate Decision – March 11, 14:00 GMT
Preceding employment, inflation and retail sales reports may take away from the potential impact of the SNB rate decision. Nevertheless, it will be important to see the comments from policy makers as the Swiss National Bank is suspected to have been intervening in currency markets to limit the Franc’s appreciation. There is virtually no chance that the central bank will raise rates and may look to temper any expectations for future tightening. Deflation remains a concern and with consumer prices expected to remain at 1.0% on an annualized basis, any dip in growth would increase downside risks for inflation. The Swiss Franc
has yet to regain its safe-haven status which has seen it maintain a positive correlation with risk appetite, limiting the impact of yield expectations on volatility.
• Canada Net Change In Employment (FEB) – March 12, 12:00 GMT
The Canadian economy saw a string of positive fundamentals end with the unexpected 4.9% decline in building permits which was followed by a miss in the Ivey PMI. A weaker than expected employment report could start to raise concerns that growth is waning as weak U.S. demand catches up with the export driven economy. Emerging markets have been the main consumers of Canadian exports which may not be sustainable as inflation concerns have led to countries like China to take steps to slow activity. However, evidence of sustainable job growth will raise the outlook domestic demand which could help offset weakness from abroad. Downside risks may be greater following the recent rally which makes the release significant, especially if risk appetite has started to fade.
• U.S. Advance Retail Sales (FEB) – March 12, 13:30 GMT
Consumption figures from the world’s largest economy have the potential to be the greatest event risk on the week. Judging by the reaction to a small surprise in the employment figures, an improvement in domestic demand could generate its own bout of risk appetite. However, early forecasts are for a 0.2% decline as severe weather which shutdown large parts of the country. is expected to have weighed on demand. State specific cash for appliances programs could have created some artificial demand. Additionally, cash strapped Americans were filing their tax returns as soon as possible which had several receiving their rebates at the end of the month. A dip in retail sales will fuel speculation that absent government stimulus growth will stagnate which may generate broader risk aversion.
See the DailyFX Calendar for a full list, timetable, and consensus forecasts for upcoming economic indicators.
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