Weekly Analysis and Recommendation: The AUD/USD rebounded last week after early weakness to close up 0.0080, or 1.14% at .7123. The catalyst for the move
The bullish labor report showed the economy added 58,600 jobs in October. This soundly beat economist estimates of a 15,000 job increase. This was also the largest monthly increase since March 2012. The jobless rate dropped to 5.9 percent, its lowest level in 19 months.
The labor report was strong enough to push down nearby bond yields, indicating that speculators were reducing the odds of a December rate cut. The odds for a rate hike next month dropped to about 8%. A week ago, the odds were around 67%. Traders are now pricing in the possibility of only one rate cut in 2016.
This week, investors will get the opportunity to react to the latest U.S. consumer inflation data. Month-to-month core inflation is expected to rise 0.2%, or 1.9% annually. This will put it just under the Fed’s benchmark target of 2.0%. However, next month, the figure may rise to 2.0% or higher because last year’s steep drop in crude oil prices will start to be filtered out of the inflation equation.
Also on-tap on Wednesday, November 18 are the minutes of the last Fed meeting. Hawkish minutes are likely to put some pressure on the AUD/USD because they will highlight the divergence between the monetary policies of the hawkish U.S. Federal Reserve and the somewhat-dovish Reserve Bank of Australia.
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports.
Important Reports to Watch this Week:
Date Time Curr Event Previous Forecast
Sun Nov 15 |
All Day |
ALL |
G20 Meetings |
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7:30pm ET |
AUD |
New Motor Vehicle Sales m/m |
5.5% |
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Mon Nov 16 |
8:30am ET |
USD |
Empire State Manufacturing Index |
-5.3 |
-11.4 |
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4:30pm ET |
AUD |
RBA Assist Gov Kent Speaks |
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7:30pm ET |
AUD |
Monetary Policy Meeting Minutes |
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Tue Nov 17 |
8:30am ET |
USD |
CPI m/m |
0.2% |
-0.2% |
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USD |
Core CPI m/m |
0.2% |
0.2% |
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9:15am ET |
USD |
Capacity Utilization Rate |
77.5% |
77.5% |
|||||
USD |
Industrial Production m/m |
0.1% |
-0.2% |
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17th-19th |
USD |
Mortgage Delinquencies |
5.30% |
||||||
10:00am ET |
USD |
NAHB Housing Market Index |
64 |
64 |
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4:00pm ET |
USD |
TIC Long-Term Purchases |
20.4B |
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5:15pm ET |
AUD |
RBA Assist Gov Debelle Speaks |
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6:00pm ET |
AUD |
CB Leading Index m/m |
-0.4% |
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6:30pm ET |
AUD |
MI Leading Index m/m |
0.1% |
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7:30pm ET |
AUD |
Wage Price Index q/q |
0.6% |
0.6% |
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Wed Nov 18 |
8:00am ET |
USD |
FOMC Member Lockhart Speaks |
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8:30am ET |
USD |
Building Permits |
1.15M |
1.11M |
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USD |
Housing Starts |
1.16M |
1.21M |
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10:30am ET |
USD |
Crude Oil Inventories |
4.2M |
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2:00pm ET |
USD |
FOMC Meeting Minutes |
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Thu Nov 19 |
8:30am ET |
USD |
Unemployment Claims |
272K |
276K |
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10:00am ET |
USD |
Philly Fed Manufacturing Index |
0.1 |
-4.5 |
|||||
USD |
CB Leading Index m/m |
0.5% |
-0.2% |
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10:30am ET |
USD |
Natural Gas Storage |
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12:30pm ET |
USD |
FOMC Member Lockhart Speaks |
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Fri Nov 20 |
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Sat Nov 21 |
12:00pm ET |
USD |
FOMC Member Williams Speaks |
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.