Weekly Outlook for September 5th to 9th

The US employment data release last week was disappointing as growth was seen to have slowed down more than expected for the month of August after it had previously experienced two consecutive months of significant gains. The Non-Farm Payrolls grew by 151, 000, less than analysts’ forecasts for an increase of 180,000 in jobs. Increase in wages was weak and employment rate climbed up to 4.9% from a previous 4.8% reported in the previous month. The faltering in employment data for the month of August may reduce the possibility for a Fed rate hike in September, as the release will leave the Fed watching future release to determine if a slowing trend has been formed or not.

For the coming week, some of the major releases that are likely to move the market are Australia, Canada and EU rate decisions, Kuroda’s speech, US and Canada employment data and US crude oil inventories.

ECB Monetary Policy Decision

The ECB is scheduled to announce its latest monetary policy decision on Thursday September 8th at 07.45 EST. The ECB President Mario Draghi will later hold his regular press conference at 08.30 EST. The ECB plans to announce its latest interest rate decision on Thursday and there are widespread expectations that all main rates will be left the same.

New projections by ECB staff will be made available at this meeting, which will further raise the chances of more policy action, especially if there is a downgrading of the previous inflation forecasts. Even if there is no fresh action, lower inflation forecasts would increase market speculation over action in October or December. The latest inflation data was slightly weaker than expected with the headline CPI rate unchanged at 0.2% for August with the core rate at 0.8%.

The ECB is likely to repeat its determination that all necessary action will be taken in order to raise the inflation rate. ECB sources have suggested that the bank is in no hurry to take any further action, although, there will be further concerns over inflation.

Haruhiko Kuroda Speaks

This event is scheduled for Monday 5^th September at 04:30 GMT. The governor of the Bank of Japan Haruhiko Kuroda is expected to speak on Monday in Tokyo. Kuroda had earlier stated that he will not hesitate to boost the monetary stimulus if required, at the monetary policy symposium of the Federal Reserve in Jackson Hole. He further implied that there is more room for easing of the monetary policy within the BoJ’s package of buying assets, guiding monetary base and negative interest rates. The BoJ governor however reassured everyone that the central bank will ensure the proper usage of the policy scheme for the purpose of achieving the price stability target. The forex market is likely to remain volatile during the event.

Bank of England Inflation Report Hearings

The Bank of England Governor Carney and other Monetary Policy Committee (MPC) members are scheduled to speak to the Treasury Select Committee on the August inflation report on Wednesday September 7th at 09.15 EST. The latest testimony from Bank of England Governor Carney and other Monetary Policy Committee members to the Treasury Select Committee on the August inflation report will be very important for the GBP and other UK assets. Comments made at the event concerning the state of the data releases will be very vital for interest rate expectations. Markets will be looking very closely for hints on whether the MPC still anticipate further monetary policy easing before the end of 2016.

US ISM Non-Manufacturing PMI

Scheduled for Tuesday 6^th of September at 14:00GMT. The ISM non-manufacturing PMI fell to 55.5 in July after a strong reading of 56.5 recorded for the month of June. However, the confidence in the outlook continued to be strong because the orders component registered growth during the month. Meanwhile, the business activity index came in strong at 59.3, down slightly from 59.5 in the previous month and new orders index rose to 60.3 from 59.9. The employment index registered a strong decline. The index fell to 51.4 from 52.7 in the previous month. The ISM non-manufacturing PMI for August is expected to remain flat at 55.4.

Some other Major Releases are;

• New Zealand GDT Price Index (09/06/2016 Tuesday 14:00 GMT)


• SNB Chairman Jordan Speaks (09/06/2016 Tuesday 16:15 GMT)


• Australia Interest Rate Decision/RBA Rate Statement (09/06/2016 Tuesday 4:30 GMT)


• UK Services PMI (09/05/2016 Monday 8:30 GMT)


• UK Manufacturing Production (09/07/2016 Wednesday 8:30 GMT)


• UK Inflation Report Hearings (09/07/2016 Wednesday 13:15 GMT)


• Canada Rate Decision/Bank of Canada Rate Statement (09/07/2016 Wednesday 14:00 GMT)