Weekly Forex Forecast for 14-18 November

The financial community’s interest continued to revolve around the news that came pouring in from Europe during last week including the political changes in Italy and Greece that stir up the forex markets throughout the week.  The news from Europe will likely to keep occupying the markets and affect its stability during the upcoming week.  Here is an outlook of the main news items and reports that could affect the forex markets for the week of November 14th to November 18th that highlights the news from U.S., Europe, Japan, Australia and Canada.   

(all times GMT):

  1. Sunday November 13th 23:50– Japan’s Flash Report GDP 3Q2011: Japan continues to demonstrate weakness as its gross domestic product shrunk by 2.1% during the second quarter of 2011, and 1.3% during the fourth quarter of 2010 (in annul terms). The steps taken by BOJ (see below) to jumpstart the economy don’t seem to rally the Japanese economy for now. This news could affect the Japanese Yen;
  2. Monday November 14th 2:30 – Bank of Australia Monetary Policy Statement: The minutes of the monetary policy meeting of the reserve bank of Australia shows the main factors that influenced the board’s decision to keep the Bank’s basic interest rate unchanged at 4.75%; this decision may affect the AUD/USD exchange rate (see here last rate decision);
  3. Tuesday November 15th 09:30 – Great Britain CPI: this report will present the yearly rate of GB’s consumer price index for October; in the last report regarding September the annual CPI reached 5.2%; this news may affect British pound traders;
  4. Tuesday November 15th 13:30 – Changes in U.S. Retail Sales: this report shows the monthly changes in the retail sales and food services; in last month’s report regarding September, the retail sales, when controlling for the price changes, slightly inclined by 1.1% from the previous month (see here my review of the recent report).
  5. Tuesday November 15th 10:00– Euro Area GDP 3Q2011: Germany France and Italy will publish this week their preliminary third quarter GDP report. This report will show the changes in the economic growth in these countries; Euro Stat will also publish the GDP growth rate of the Euro Area. According to the recent report in the second quarter of 2011, the Euro Area GDP grew by only 0.2% compared to the previous quarter (see here recent report);
  6. Tuesday November 15th 13:30 – U.S. PPI: This monthly report will show the progress in the PPI during October, i.e. the inflation rate from producers’ stand point. In the recent report regarding September, this index for finished goods rose by 0.8% compared with August’s rate and by 6.9% in annual terms;
  7. Tuesday November 15th– Bank of Japan – Interest Rate Decision: This statement will present Bank of Japan’s rate decision and other monetary related decisions. In the recent statement the bank kept the interest rate unchanged at 0 to 0.1 percent and also decided to enhance the Asset purchasing program by 5 trillion yen ($65 billion). The BOJ also created US dollar funds auctions in order to devalue the yen. These steps are aimed to protect Japan’s economy from slowing down;
  8. Wednesday November 16th 10:00 – Euro Area Consumer Price Index and Core Monthly Inflation (October): Following the recent interest rate cut done by the ECB, there are those who may consider there will be an increase in the inflation pressures in the months to come. In last flash report regarding October 2011, the annual inflation rate was 3.0%, which could be among the key factors to affect the future ECB decisions on its interest rates;
  9. Wednesday November 16th 13:30 – Report of U.S Consumer Price Index: This monthly report will show the main changes in the consumer price index during September. According to the U.S Bureau of Labor statistics for September 2011, the CPI inclined by 0.3% and over the last 12 months by 3.9%. The core CPI inclined in September by 0.1%;
  10. Wednesday November 16th 14:00 – U.S. TIC Long Term Purchases: The Treasury International Capital report will present the main changes in the purchases and sales of US long term treasuries in September 2011. In the previous report regarding August 2011, the net foreign holdings in U.S Treasuries longer-term notes declined by $8.7 billion (see here my review for July 2011).
  11. Thursday November 17th 13:30 – U.S. Housing Starts: According to the US Census Bureau involves the U.S housing starts the adjusted annual rate reached 658,000 in September 2011, which is 15% above August’s rate of 572,000 (see here the recent review);
  12. Thursday November 17th 13:30 – U.S. Building Permits: The recent report showed a 5% decrease (M-o-M) in the adjusted annual rate of building permits as it reached 594,000 in September 2011. If this report will continue to show a decline in the building permits rate, it may indicate that the U.S housing market isn’t pulling out of its slump (see here the recent review);
  13. Thursday November 17th 13:30 –Weekly Report on U.S. Jobless Claims: initial claims decreased by 10,000 to 390,000 claims for the week ending on November 4th; the number of insured unemployment fell by 92k to 3.615  million during the week of October 29th;
  14. Thursday November 17th 15:00 – Philly Fed Manufacturing Index: This monthly survey provides an indicator for the economic progress of the US economy as it measures the manufacturing conditions of the US. In the last October survey, the report showed improvement as the index inclined from –17.5 in September to +8.7 in October. This index, may have been among the factors to affect the US Dollar at the time (see here last report)  ;
  15. Friday November 18th 13:00 – Canadian Core CPI: This report will refer to the core consumer price index changes during October 2011 that controls the volatile components such as energy, fruit and vegetables. According to the recent Canadian statistics report for September 2011, the CPI rose by 3.2% during the past 12 month up to September – this is a slightly higher rate than in August, in which there was a 3.1% growth rate in 12 months; the core CPI excluding food and energy grew by only 1.9% from September 2010 to September 2011. This news could affect the Canadian dollar.

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