- Rates markets are currently pricing in only a 4% chance of a move by the RBA this week, but the odds of a rate cut by the end of the summer are rising.
- At the March meeting, the ECB’s Governing Council announced its intention to start a third TLRO program.
- Markets are expecting the weak February US Nonfarm Payrolls print of 20K to be a one-off; consensus calls for 170K.
Join me on Mondays at 7:30 EDT/11:30 GMT for the FX Week Ahead webinar, where we discuss top event risk over the coming days and strategies for trading FX markets around the events listed below.
04/02 TUESDAY | 03:30 GMT | AUD RESERVE BANK OF AUSTRALIA RATE DECISION
Like its antipodean counterpart last week, odds for a move by the Reserve Bank of Australia at its forthcoming meeting are practically absent: there is only a 3.9% chance of a 25-bps rate cut on Tuesday. Economic data momentum has been stable over the past month, with the Citi Economic Surprise Index for Australia having started March at 2.7 and closing March at 3.9.
Read the full report: April RBA Meeting & AUDUSD Price Outlook
04/02 TUESDAY | 12:30 GMT | USD DURABLE GOODS ORDERS (MAR P)
Durable Goods Orders are an important barometer for US consumption, which constitutes roughly 70% of GDP. Typically, consumers hold off on buying durable goods during poor economy conditions; thus, improved orders suggest confidence among American consumers with respect to their future financial security. The preliminary March print is expected to show a drop of -1.2% over the prior month after the 0.3% increase in February.
Read the full report: March US Durable Goods & USDJPY Price Outlook
04/04 THURSDAY | 11:30 GMT | EUR MARCH EUROPEAN CENTRAL BANK MEETING MINUTES
The March ECB meeting minutes on Thursday will draw interest this week considering the Governing Council’s decision to announce its third TLTRO program starting this September and push back its forward guidance to indicate that rates would stay on hold through at least the end of 2019. Likewise, we’ll get some insight into how much more the central bank is willing to do at a time when fiscal policymakers are hamstrung by seemingly endless domestic woes.
Read the full report: March ECB Meeting Minutes & EURJPY Price Outlook
04/05 FRIDAY | 12:30 GMT | USD CHANGE IN NONFARM PAYROLLS & UNEMPLOYMENT RATE (MAR)
The main issue for the US Dollar when it comes to the March US Nonfarm Payrolls report is whether or not the US labor market rebounded after the US government shutdown. After all, the February reading was a meager 20K. But with the unemployment rate still near cycle lows at 3.8%, there is still evidence that the labor market remains tight by the FOMC’s standards. Market participants are expecting that March reading will show a strong rebound, given that jobless claims remain low. Accordingly, current expectations for the data are calling for the unemployment rate to hold at 3.8%, and for the headline jobs figure to come in at +170K.
Read the full report: March US Nonfarm Payrolls & EURUSD Price Outlook
04/05 FRIDAY | 12:30 GMT | CAD EMPLOYMENT CHANGE & UNEMPLOYMENT RATE (MAR)
The first two months of the year have produced strong labor market reports for the Canadian economy, and as a result, markets are anticipating a quieter March. The January employment change was 66.8K jobs, while the topline February reading came in at 55.9K.Even though the Bloomberg consensus calls for the March report to only show 10K jobs added,the unemployment rate is due to stay on hold at 5.8%. With energy markets continuing their rebound since the start of the year – nearly 11% of the Canadian economy is tied to oil – it’s likely that jobs growth remained positive in Canada through the end of Q1’19.
Read the full report: March Canadian Jobs Report & USDCAD Price Outlook
FX TRADING RESOURCES
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--- Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher, email him at firstname.lastname@example.org