A1 Trading Company

November 2, 2021

The Week Ahead: NFP, FOMC, BOE & Unemployment

Bart Kurek

Let's look at the news event's we've got lining up this week...

(AUD) RBA Rate Statement

The Reserve Bank of Australia is expected to keep its policies unchanged. Analysts aren't expecting changes from the central bank this time, but traders are likely going to be eager about Governor Lowe's presser to see if the RBA is still interested in defending its 0.10% yield target on its 3-year debt. The RBA did not step up to buy bonds when yields hit more than 0.50% last week. A lack in defence in the RBA's super cheap yields would mean the central bank is getting comfortable with higher interest rates and could possibly lead to raising its rates sooner than 2024.

(NZD) Unemployment Rate

The Quarterly Employment Change report is being released by "Statistics New Zealand" and is a measure of the change in the number of employed people in New Zealand. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity. The number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labour-market conditions.

It is forecasted we see a slower pace of growth for the first quarter at 0.4% versus the previous 1.0% gain, and this should be enough to lower the unemployment rate from 4.0% to 3.9%. If we see an uprise in the actual figure then this will likely cause a bullish NZD.

(USD) FOMC Statement

The Fed was looking for "substantial further progress" on inflation and unemployment and they got it, traders are now expecting the Fed to scale down their monthly asset purchases from $120B starting from November. That being said, with asset purchases likely zeroing out by June 2022, markets will have their eyes on an interest rate hike schedule. Any hawkish statements from the Fed can extend the dollar's rally but any dovish statements or a slower-than-expected tapering tape could knock the USD against currencies with more hawkish central banks.

(GBP) BOE Monetary Policy Report

The BoE's members have been hinting at its urgency to respond to high inflation and markets are now pricing in at least a 15-basis point interest rate hike from the central bank. Traders shouldn't expect too much hawkishness though, because aside from the rate hike likely not being unanimous, it's likely we will see other MPC members push back and call for more economic data before committing to an interest rate hike schedule.

(USD) NFP

The Non-Farm Payroll (NFP) or also known as Non-Farm Employment Change data, released by the Bureau of Labor Statistics, is a key economic indicator for the US economy which represents the number of jobs added to US citizens, excluding farm, government, private household and non-profit organisation employees.

NFP data always causes a commotion in FX as it is an important indicator for the Federal Reserve Bank. When unemployment is high, policymakers tend to have an expansionary (stimulatory, with low-interest rates) monetary policy with the goal to increase economic output and increase employment.

The increase in demand for labour and the expiration of jobless benefits is expected to boost NFP by 397k following the disappointing 194k increase last month. This report will be printed after the Fed's taper timeline has been announced so its impact may be muted. However, traders will still look at data points like labour participation rate and average earnings for clues on hiring and inflation trends.

A1 Edgefinder

All-In-One Fundamental Dashboard!
Simplify your fundamental analysis with our all-in-one fundamental dashboard! 
Discount code: READER

Learn more

Dollar Remains Strong

Indices recover from Friday's lows as the dollar index hovers at break even. The mounting tensions in Israel-Iran escalated market worries, but financial earnings have kicked off to a good start. EdgeFinder Analysis Retail Sales came in higher than expected which is a good sign for the economy. It's also strong for the USD as […]

Read More
Hotter CPI Shakes Markets

Yesterday's CPI numbers in the US caused considerable doubt in the expectations of a June rate cut. This morning's PPI came in lower than expected. But, it might not be enough to convince investors of a summer rate cut. EdgeFinder Analysis EURUSD is a -8 now on the EdgeFinder indicating dollar strength after the higher […]

Read More
Key Inflation Data Weighs on Investor Sentiment

Wednesday's inflation report in the US will be very pivotal in how USD-related assets will react for the next month. Higher CPI has investors worried of the Fed who still looks to cut rates at some point this year, but the inflationary trend could determine when these rate cuts come. EdgeFinder Analysis We have been […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
Signals
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
homesmartphonelaptop-phonemenumenu-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram