The dollar strengthened significantly as worries from all over the globe took over. Elections in France and Greece, US Trade Balance, jobless claims and Consumer Sentiment are the highlights of this week. Here is an outlook on the main market-movers awaiting us.
The highly anticipated Non-Farm Payrolls came out weak, only 115K jobs gained.
Yet this is only part of the story: revisions added 53K and the
unemployment rate fell once again. With weakness seen from so many
places (Europe, the UK, Australia and New Zealand), the US dollar enjoys
a still growing economy and safe haven flows. Will this continue?
- Greek Elections: Sunday. The mainstream,
pro-bailout, pro-austerity parties are expected to weaken and lose the
absolute majority, leading to negotiations for a shaky right wing
government that will try to renegotiate the bailout conditions. This is
the scenario with the highest probability. See the 3 scenarios for the Greek elections and the euro. In any case, the coalition negotiations will take quite some time and this will likely cause volatility.
- French Elections, Sunday. Socialist candidate
Françios Hollande is expected to win incumbent Nicolas Sarkozy with a
small margin. A victory for Hollande will change the current austerity
policy in Europe and will hurt the euro in the short term. A surprise
victory for Sarkozy will boost the euro in the short term. See the analysis of how this affects Germany.
- Australia employment data: Thursday, 1:30.
Australian economy added an impressive 44,000 jobs in March compared to a
contraction of 15,400 positions in the previous month. Analysts
estimated a rise of 6,000 jobs. The rise can be explained by the
recovery in the US market. Meantime, unemployment rate remained 5.2%
below the 5.3% predicted by economists. All in all, a positive reading
in the Australian job market. Australian job market is expected to
contract by 4,200 jobs and unemployment rate is predicted to increase to
5.3%.
- UK rate decision: Thursday, 11:00. The BOE Monetary
Policy Committee chose to maintain interest rate at 0.50% without
providing any new monetary stimulus as anticipated. The decision came
after better than expected economic readings for the first quarter.
Official bank rate is expected to remain 0.50%.
- US Trade Balance: Thursday, 12:30. The U.S. trade deficit narrowed in February reaching $46 billion US compared to $52.5 billion in January amid a sharp drop in imports while exports surged to $181.2 billion. Despite the positive tone of narrowing trade balance deficit, the sharp drop in imports can suggest slower growth in the US economy. U.S. trade deficit is expected to widen to $49.8 billion.
- US Unemployment Claims: Thursday, 12:30. An
unexpected decline in the number of Americans filing applications
for unemployment benefits occurred last week, with 365,000 claims
compared to 392,000 in the previous week. This encouraging figure may
help reduce concerns over the recent slowdown in the job market. Jobless
claims is expected to increase reaching 372,000.
- US Federal Budget Balance: Thursday, 18:00. The
U.S. federal budget balance decreased its deficit to -198.2 billion from
-232.0 billion in February. This reading is better than the -202.5
billion anticipated by analysts. U.S. federal budget balance is
expected to turn to a 30.0 billion surplus.
- Canadian employment data: Friday, 12:30. Canada’s economy surprised with a strong job growth of 82,300 jobs in March,
the A three year record, decreasing unemployment rate to 7.2% for the
first time since September 2011. The impressive job gain occurred amid
strong private-sector hiring of full-time positions. These surprisingly
good readings are way above the 10,500 job gain anticipated by analysts
which will lead to further gains in numerous economic sectors. Another
increase of 12,900 is expected while unemployment claims is anticipated
to reach 7.3%.
- US PPI : Friday, 12:30.
The producer price index for finished goods remained unchanged in March
after 0.4% gain in February. This reading was below the 0.3% rise
predicted by analysts. However Core PPI increased by 0.3% following 0.2%
gain in February. Producer price is predicted to remain unchanged this
time.
- US UoM Consumer Sentiment: Friday, 13:55. The preliminary results of the University of Michigan consumer sentiment dropped to75.7 in April after reaching76.2 in March. The reading was below the 76.4 figure initially predicted. The final reading was upwardly revised to 76.4. A small increase to 76.5 is expected now.
*All times are GMT.
Source: Forexcrunch
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