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Non-Farm Payrolls will make additional fuss about the FOMC

Non-Farm Payrolls will make additional fuss about the FOMC

Sent signals for the last week:

US EIA NATURAL GAS STORAGE CHANGE Buy 2, pair up fo 50 points

USD

Traditionally, every year during this period, the USA frightened with the issue of raising its national debt, exceeding the bar of which may mean a technical default and blah…blah…blah. This happens every year, as we remember ourselves and each time everything ends happily, the dollar does not crash and the world does not collapse. Why is this happening? This is politics, my friends ... Overcoming the limit line of a possible debt is a political decision and opponents do not disdain to squabble nerves each other once again even on such “technical” issues.

Trump added sanctions against Russia but Congress still has to vote.

FOMC held a regular meeting, the rate is expected to remain at 1.25%, the key date for the next increase is still set by the markets in December, and futures retain their 46% chance put in prices.

But in the minutes of the Committee’s meeting, rhetoric indicates that a further increase in the interest rate may not be as fast as previously thought. Inflation is expected to be below 2% in the short term and at 2% in the medium term.

A number of statistics from the US turned out to be mixed, and its main crown was the publication of the quarterly report on the GDP of the first release at the end of the second quarter.

Data on GDP growth have been published at the level of forecasts:

US GDP - Annualized (Q/Q) 2.6% at 2.6%

But the data on the price index was slightly below expectations:

US GDP - Price Index (Q/Q) 1% at 1.3%

That once again raises the question of weak inflation, which may not support the direction to tighten the monetary policy of the Fed.

CAD

Last week, the Bank of Canada raised the interest rate for the first time for many years, and this week there was a leak of information that some representatives of the regulator were concerned about this reversal of the monetary policy and they were worried about the need to support further economic growth.

Canadian GDP so far relieves this tension, the latest data published on Friday say about the strengthening of growth: CA GDP (M/M) 0.6% against the forecast 0.2%

EUR

The IMF advocated the support of additional stimulus for the economy from the European Central Bank. The markets cooled down last week and now they expect an autumn as Mario Draghi promised a decision on the fate of the incentive program in September.

AUD

The core of the consumer price index is at the level of previous values and forecasts, but the overall indicator showed some weakening:

AU CPI (Q/Q) 0.2% in fact, with a forecast of 0.4% and previous 0.5%

AU CPI - Trimmed Mean (Q/Q) 0.5% -0.5% -0.5%

What could mean a reduction in expectations of the RBA’s monetary policy tightening on the part of market participants?

This was also confirmed by Philip Lowe, the Managing Director of the Reserve Bank of Australia, who noted that it is difficult to achieve the desired policy when inflation is low and the labor market is a cause for additional concern.

GBP

The growth of the economy for the second quarter of 2017 exactly coincided with the expectations of economists:

Prelim GDP q/q 0.3% vs 0.3%

The Bank of England will hold its meeting next week.

Important events of the upcoming week

Traditionally, the boring last week of the month always gives time to restore forces before the start of the new month, since it is precisely the first half of it is marked by the publication of the main and strong reports of macroeconomic statistics.

On Tuesday, the meeting of the Reserve Bank of Australia (AU RBA Interest Rate) will take place and a series of publications of leading indicators PMI (UK Markit Manufacturing PMI, US ISM Manufacturing PMI, UK PMI Construction, UK Markit Services PMI, etc.) will also be launched.

Wednesday – the quarterly data of the New Zealand's labor market (NZ Unemployment Rate) and a good portion of statistics, like for Oceania, which will not decide whether to raise rates or not.

On the same day, preliminary data before the Non-Farm Payrolls of Friday US ADP Nonfarm Employment Change, a pleasant calm report with frequent trades.

On Thursday, the Bank of England will be assertive and is going to raise the interest rate, against which the “sense of smell” of the market is especially acute in this regard.

On Friday there will be Non-Farm Payrolls, but you all know about it already what a popular “terribly cool” report.

Sent signals for the last week:

US EIA NATURAL GAS STORAGE CHANGE Buy 2, pair up fo 50 points

A full calendar of upcoming trading events that you can use for algorithmic trading can be found on the trading signals 

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