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The Week Ahead – It’s going to be Busy with Nowhere to Hide

By:
Bob Mason
Published: Mar 31, 2019, 14:30 UTC

It's a big week ahead and it could go horribly wrong. Parliament could continue on its path to destruction and economic data could disappoint... Either way, it's going to be choppy.

Europe and USA flag on human male hands

On the Macro

For the Dollar:

It’s a busy week ahead and the markets will find out just how bad things are. It’s nonfarm payroll week and, while Friday’s wage growth and NFP numbers are key, a few things are worth monitoring…

February retail sales and March ISM manufacturing numbers on Monday will kick off the week.

February durable goods orders on Tuesday will also be of interest ahead of Wednesday’s ADP nonfarm employment and ISM non-manufacturing figures.

While manufacturing productivity is of interest, the services sector accounts for over 70% of the U.S economy…

After a quiet Thursday, NFP, wage growth and unemployment figures on Friday will round of what is likely to be a choppy week.

The Dollar Spot Index ended the week up 0.58% to $97.211

For the EUR:

Private sector PMI numbers due out on Monday and Wednesday will be the key drivers. Following February numbers, a more significant contraction on German manufacturing could drive expectations of a near-term move by the ECB.

In the latter part of the week, factory orders and industrial production figures out of Germany will influence, though much will depend on the prelim private sector numbers earlier on the week.

Out of the Eurozone, prelim inflation, retail sales, and unemployment figures will likely have a muted impact in the week.

Outside of the data, the ECB monetary policy meeting minutes could give some more color on tiered deposit rates.

The EUR/USD ended the week down 0.74% to $1.1218.

For the Pound:

A relatively busy first half of the week sees private sector PMI numbers due out. While the focus will be on Wednesday’s service sector PMI numbers, expect some response to the manufacturing PMI.

House price figures out in the 2nd half of the week will have a muted impact.

Outside of the numbers, it goes without saying that Brexit will be the key driver. Can the Pound reach the flash crash lows of $1.19048 of 2016?

Following the jump in risk of a no-deal on Friday, Theresa May will apparently be giving it a 4th time lucky in the week ahead. There’s no need for the British PM to resign, but she has threatened to call a General Election. It didn’t go well for the Tories or the Pound the last time around…

The GBP/USD ended the week down 1.32% at $1.3035.

For the Loonie:

A quiet start to the week will leave the Loonie exposed to market risk sentiment and crude oil prices.

In the 2nd half on the week, Ivey PMI numbers on Thursday and employment numbers on Friday will influence.

Inverted yield curves and a plethora of economic data out of the U.S and Eurozone could ultimately impact, however.

The Loonie ended the week up 0.6 % to C$1.3349 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a busy first half of the week.

Manufacturing figures, business confidence, and new home sales are due out at the start of the week. Concerns over the housing sector will leave the Aussie Dollar sensitive to the full suite of stats that precede Tuesday’s RBA monetary policy decision.

While the RBA is expected to hold rates steady, there is an expectation that the RBA will take a more dovish stance. The housing sector in itself will be a material concern, with bank NPLs a major stress point following some questionable lending standards in recent years. Post RBA, retail sales and trade data on Wednesday will also have a material impact on the Aussie.

Elsewhere, expect private sector PMI numbers out of China and risk sentiment, in general, to also influence.

The Aussie Dollar ended the week up 0.18% to $0.7096.

For the Japanese Yen:

Key stats through the week include 1st quarter Tankan survey figures due out on Monday. While we can expect the markets to consider the numbers, private sector PMI figures released out of China over the weekend will likely set the tone on Monday.

Household spending figures, due out on Friday, will unlikely garner too much attention. Sentiment toward the global economic outlook and geopolitical risk will likely be the key drivers for the Yen.

The Japanese Yen ended the week down 0.86% to ¥110.86 against the U.S Dollar.

For the Kiwi Dollar:

It’s a particularly quiet week ahead, with 1st quarter business confidence figures the only data to consider.

While Tuesday’s stat could be another blow for the Kiwi Dollar, stats out of China and sentiment towards the U.S – China trade talks will likely be the key driver through the week.

The Kiwi Dollar ended the week down 1.09% to $0.6804.

Out of China:

Private sector PMI numbers are due out in the week. The focus will continue to be on the manufacturing figures due out on Monday.

Following Sunday’s stats, it could be a bad start to the week for the financial markets. Trade talks may be progressing but there’s clearly been a cost to both the U.S and Chinese economies…

Geo-Politics

U.S – China Trade War:  There’s no deal to spur the bulls into action, but we can expect some chatter in the week ahead. Look out for a Trump – Xi Summit to wrap things up.

Brexit: It’s a “Never Ending Story”… Theresa May could well be going for a 4th Parliamentary vote. It’s not the promise of a resignation, but a threat of a General Election this time around… NO DEAL is looking like a possible outcome. Shambolic when considering that Parliament had voted against a no-deal departure… Talking the talk is not quite the same as walking the walk…

The Rest

On the monetary policy front,

For the AUD, the RBA is scheduled to deliver its April monetary policy decision. Is the Aussie Dollar about to take a tumble? There’s little reason for the RBA to talk up the economic outlook…

For the EUR, the ECB monetary policy meeting minutes are due out on Thursday. Following some chatter on tiered deposit rates for banks, the content and tone will be key in the week ahead.

For the USD, FOMC members will be out in force once more. The markets will be working out the balance on when the first rate cut is likely. Anything more dovish than a September cut and expect the markets to react.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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