Financial News November 6, 2015
Daily Economic Outlook: 6th November 2015
Market will be focusing on today's U.S. labour market report. Fed Chair Yellen and FOMC members gave a hint of interest rate hike in December, but the upcomming data will determine the rate hike.
"This week's releases, including a very strong ISM non-manufacturing survey for October, have boosted expectations of a December Fed move. However, it is undoubtedly the case that today's labour market data and the subsequent release in early December will be key inputs into the decision", says Lloyds bank.
Experts believe that U.S. employment rate in October will be increased by 182k. Though this figure is beter than past past two months performance but it is still less than the average rise in 2014 as well as 2015.
"Yesterday's Inflation Report and press conference by BoE Governor Carney appear to make an early 2016 interest rate hike look unlikely, even if the Fed moves in December. Markets are now pricing in no change until early 2017. Looking at today's data, UK industrial production is expected to have declined modestly in September, although manufacturing output is forecast to rise on the month. A significantly different outturn for industrial production would increase the probability that the initial estimate of Q3 GDP growth of 0.5% will be revised", notes Lloyds Bank.
Market Review November 6, 2015
Traders are waiting for the US NFP data later today as the USD stays strong compare to the other majors. Earlier this week, Janet Yellen indicated that if the upcoming jobs data supports Fed expectations regarding the US economy there is a possibility for a rate hike in December. Most of forex traders, bond and stocks investors have speculated for a positive number and any deviation in regards the NFP would cause huge impact in the market.
Yesterday the market got volatile after RBA decided to hold rates. The BOE voted 8-1 to keep the Bank rate unchanged at 0.5% with Ian McCafferty the sole dissenter proposing a rate hike. Additionally Australia's central bank kept its cash rate unchanged at 2% as widely expected and the same time left the window open for possible rate cuts due to low inflation if the economy outlook demands it.
U.S. NFP data on 13:30 GMT time remains the key event of the day since it will affect the upcoming weeks market movements as well, therefore the market would be rather quiet until the actual release.
Today other events that worth monitoring are UK Manufacturing Production m/m, and UK Trade Balance. Canada will also release Jobs data.
In regards to economic releases announced so far we had the Australia’s AIG Construction Index at 52.1, Japan’s Leading Indicators at 101.4%, German Industrial Production m/m at -1.1%, Switzerland Foreign Currency Reserves announced at 551 billion.
View our full economic calendar for a daily roundup of major economic events.
Data releases to monitor:
BP: Manufacturing Production m/m, Trade Balance,
USD: Non-Farm Employment Change, Average Hourly Earnings m/m, Unemployment Rate
CAD: Employment Change q/q, Unemployment Rate
Trade Idea of the Day
EUR/JPY
Currently the pair is trading at 132.56. Traders must monitor the 133.37 resistance level and the support level 131.59 for possible breakouts. A possible scenario would be a movement towards the 132.70 resistance level, where a break may lead to the 133.20 area. An alternative scenario could be a movement towards the 132.27 support level, where a break may lead to the 131.85 area.