Fundamental Analysis, August 31st 2014

Executive Summary

Key U.S. economic numbers begin this week on Tuesday with Monday’s observance of the Labor Day bank holiday. Tuesday’s numbers include ISM Manufacturing PMI (57.0), Final Manufacturing PMI (58.0) and ISM Manufacturing Prices (59.0). Wednesday’s data includes Factory Orders (+10.9%) and the Fed’s Beige Book. Thursday’s releases begin with ADP Non-Farm Employment Change (216K), the U.S. Trade Balance (-42.5B) Initial Jobless Claims (298K) and ISM Non-Manufacturing PMI (57.3). The week concludes with speeches on Friday by three FOMC members, Narayana Kocherlakota, Jerome Powell and Richard Fisher, followed by the week’s highlight, U.S. Non-Farm Employment Change (222K) and the U.S. Unemployment rate (6.1%). On Saturday, a speech is expected by FOMC member, Charles Plosser.

This week’s Eurozone economic releases begin with German Final Quarterly GDP (-0.2%), Spanish Manufacturing PMI (53.4), Italian Manufacturing PMI (51.0) and Eurozone Final Manufacturing PMI (50.8). Tuesday has Spanish Unemployment Change (+25.5K) and Eurozone PPI (0.0%). On Wednesday, Spanish Services PMI (55.5), Italian Services PMI (53.5) and Eurozone Retail Sales (-0.3%) are expected to be released. This week’s highlight to be released on Thursday is the ECB’s Minimum Bid Rate decision and the ECB Press Conference as well as German Factory Orders (+1.6%). The week concludes with Friday’s release of German Industrial Production (+0.5%) and Eurozone Revised Quarterly GDP.

Switzerland will release SVME PMI (53.8) on Monday, followed by Swiss Quarterly GDP (+0.5%) on Tuesday and concludes with Foreign Currency Reserves (last +453.4B) on Friday.

Economic releases for the UK begin on Monday with Manufacturing PMI (55.1), Net Lending to Individuals (+2.4B), Mortgage Approvals (+66K) and the UK M4 Money Supply (+0.5%). Tuesday’s only UK release is Construction PMI (61.5). On Wednesday, UK releases include Services PMI (58.6) and the Halifax monthly HPI will be calculated through the 8th of the month. The highlight for this week’s UK data to be released on Thursday is the BOE Official Bank Rate (0.50%) and Asset Purchase Facility (375B) decision and the MPC Rate Statement. UK numbers conclude on Friday with Consumer Inflation Expectations (last +2.6%).

This week’s Australian calendar begins on Monday with the AIG Manufacturing Index (last 50.7), the MI Inflation Gauge (last +0.2%), Company Operating Profits (-1.8%) and Commodity Prices (last -12.1%). Tuesday has this week’s highlight for Australian numbers with the RBA’s Cash Rate (2.5%) decision and Rate Statement. Other numbers out on Tuesday include Building Approvals (+1.7%) and the Australian Current Account (-13.8B). On Wednesday, Australian data has monthly Retail Sales (+0.4%) and the Australian Trade Balance (-1.77B). The week concludes with Friday’s release of the AIG Construction Index (last 52.6).

Canada’s economic calendar this week begins on Wednesday with the week’s highlight, the BOC’s Overnight Rate (1.0%) decision and Rate Statement. On Thursday, the Canadian Trade Balance (+0.9B) followed by Friday’s release of Canadian Employment Change (+10.3K), the Unemployment Rate (7.0%), Labor Productivity (+0.1%) and Ivey PMI (55.7).

New Zealand’s economic calendar will have just two releases this week: the quarterly Overseas Trade Index (-3.5%) on Monday and ANZ Commodity Prices (last -2.4%) on Tuesday.

Top Policymaker Speeches and Statements for the Coming Week

Upcoming speeches and statements from top monetary policymakers are listed below for this week, along with their start time in the GMT time zone and the affected currency.
Unexpectedly hawkish comments will generally benefit the relevant currency.

Monday, August 18th, 2014

• Nothing notable scheduled.

Tuesday, September 2nd, 2014

• 5:30am AUD RBA Rate Statement

Wednesday, September 3rd, 2014

• 4:20am AUD RBA Governor Stevens speaks

• 3:00pm CAD BOC Rate Statement

• 2:00pm USD Beige Book Tentative

• Tentative JPY Monetary Policy Statement

Thursday, September 4th, 2014

• Tentative JPY BOJ Press Conference

• Tentative GBP MPC Rate Statement

• 1:30pm EUR ECB Press Conference

• 5:30pm USD FOMC Member Mester speaks

• 12:00am USD FOMC Member Powell speaks

Friday, September 5th, 2014

• 1:15am USD FOMC Member Fisher speaks

• 2:00am USD FOMC Member Kocherlakota speaks

• 6:00am JPY BOJ Monthly Report

Saturday, September 6th, 2014

• 3:15pm USD FOMC Member Plosser speaks

Technical Chart Points and Forecast Market View by Currency Pair