The US dollar continued marching forward, accompanied by clear hints of a rate hike. US Durable Goods Orders, UK GDP and the all-important FOMC Meeting Minutes stand out in the week of Thanksgiving. These are the major events on forex calendar. Join us as we explore the market movers for this week.
US data was a mixed bag last week with a strong monthly gain of 0.4% in consumer prices after rising 0.3% in September. In the 12 months through October, the CPI edged up 1.6%, the biggest increase since October 2014. However Core CPI disappointed, climbing a mere 0.1% on a monthly basis and declining to 2.1% year-on-year. Meanwhile, Jobless claims declined to 235,000 a 43-year low indicating continued strength in the US labor market. Amid all the data, Janet Yellen testified in Washington and talked about raising rates “relatively soon“. Let’s start:
- Mario Draghi speaks: Monday, 16:00. ECB President Mario Draghi will testify before the European Parliament, in Strasbourg. The ECB has not been clear about its bond-buying program plans. Economists expect the ECB will announce the plan on Dec 8, however Trump’s election win introduced uncertainty about what he will do when he becomes U.S. president on Jan. 20. Analysts believe Draghi will extend its bond-buying stimulus program by six months in the coming ECB meeting.
- US Durable Goods Orders: Wednesday, 13:30. Orders for durable goods declined slightly in September after two months of increases. The number of new orders for manufactured goods dropped 0.1% to $227.3 billion, after a rise of 0.3% in August. Analysts had forecast a 0.1% gain in orders. Meanwhile, durable orders excluding transportation edged up 0.2%. Economists expect the upward trend to show in the October readings. Economists expect durable goods to rise 1.2% in September, while core goods to rise 0.2%.
- US Unemployment Claims: Wednesday, 13:30. The number of new claims for unemployment benefits declined to a 43-year low of 235,000 last week, backing the Fed’s plan to raise interest rates next month. Jobless claims fell 19,000 compared to the previous week, remaining below 300,000 for 89 straight weeks. That is the longest run since 1970, when the labor market was much smaller. Economists expected claims would rise to 257,000. The four-week moving average of claims dropped 6,500 to 253,500 last week. The number of jobless claims is expected to reach 241,000 this time.
- US Crude Oil Inventories: Wednesday, 15:30. U.S. crude oil inventories rose more than expected in week ended Nov. 11 on increased imports and a build at the storage hub. Crude inventories edged up for the third consecutive week, increasing 5.3 million barrels. Economists expected an addition of 1.5 million barrels. However this stock build is not expected to stir up the market. The Organization of the Petroleum Exporting Countries will meet at the end of the month, where it is expected to cap oil production to offset an ongoing supply glut.
- US FOMC Meeting Minutes: Wednesday, 19:00. These are the minutes from the November meeting, in which the Fed left rates unchanged but argued that the case for raising rates has “continued to strengthen”. In the minutes from that meeting, Yellen and her colleagues could provide yet another hint that interest rates will be raised in December.
- German Ifo Business Climate: Thursday, 9:00. German business confidence improved unexpectedly in October, reaching the 2-1/2 years high of 110.5. The rise indicates growing optimism among company owners regarding future growth prospects in Germany. The reading was higher than the estimated 109.6, boosting hopes the recent slowdown of the German economy was temporary. Businesses were more positive about their current state and even more so regarding future conditions. German business climate is expected to register 110.6 in November.
- UK GDP data: Friday, 9:30. According to the initial data for Q3, the UK economy grew by 0.5%, better than expected, especially given the fact that this is the first quarter after the EU Referendum. Year over year, the economy grew by 2.3%. The second estimate is expected to confirm the first one, but changes are not uncommon.
That’s it for the major events this week. Stay tuned for coverage on specific currencies