Key releases and events that will shape Forex trading for the week starting December 5th

Now that the US employment report is behind us, the new trading week will be dominated by central bank decisions (no the Fed decision is not one of them but it will be anticipated on Dec 14th).

  1. ECB interest rate decision. Thursday December 8th at 7:45 AM ET/1245 GMT. The ECB is expected to keep their interest rates unchanged. However, they are expected to announce an extension of the QE program. ECB's Draghi will have his usual press conference starting at 8:30 AM ET, 1330 GMT. You can expect that press conference to last one hour.
  2. RBA interest rate decision. Monday December 5 at 10:30 PM ET/Tuesday December 6 at 0330 GMT. The Reserve Bank of Australia is expected to keep the rates unchanged at 1.5%. There has been more chatter recently, that the RBA may look to tighten in 2017. Goldman Sach recently said this, as did the OECD. However, Morgan Stanley was out with their trade recommendations that focused on shorting the AUD (see post here). So there is debate. The decision and statement will be eyed for any change in sentiment. The RBA last changed rates in July.
  3. BOC interest rate decision. Wednesday, December 7th at 10 AM ET/1500 GMT. The Bank of Canada is expected to keep rates unchanged at 0.5%. Today the Canada employment report showed job gains of 10.7K vs -15K est. However, it was concentrated in part time jobs for the second consecutive month. The unemployment rate did fall to 6.8% from 7% (equaled the low for the year from June). This week, Gov. Poloz spoke cautiously saying:
  • All things being equal, need to have bigger shock when you're in such a zone of uncertainty to prompt a move
  • At this stage too early to tell impact of Trump election; BOC won't react to hypotheticals.
  • Big shock or accumulation of things, could change path
  • Canada has gone through downsizing phase and resources
  • Most of bad news for resources behind Canada
  • Capability may be more important than output gap
  • Uncertainty from Trumps victory
  • BOC does not make assumptions about US government policy
  • We have all the ingredients of divergence in monetary policy with US
  • If we hadn't had oil price shock Canada and US economies will be in more similar situations
  • Bond yields have crept up in last few weeks.. That is something we have to build into calculus going forward
  • Sales by Canadian owned foreign affiliates are about the same size as total exports every year
  • Canada will set independent policy

4. Australia GDP QoQ. Tuesday December 6 at 7:30 PM ET/0030 GMT (Wednesday). The eestimate is for a gain of 0.2% vs +0.5% in Q2. The YoY is expected to rise by 2.5% vs 3.3% last.

5. US non-manufacturing PMI. Monday, December 5 at 10 AM ET. the US nonmanufacturing composite index for November is expected to rise to 55.3 from 54.8.

Other Key events releases:

  • Italian referendum. Italian PM Renzi has said he would resign if the referendum is not passed
  • UK service PMI. Monday, December 5 at 4:30 AM ET/0930 GMT. Est 54.2 vs 54.5 last
  • Canada Trade Balance, December 6 at 8:30 AM ET. The eexpectation is for a deficit of -2.10 billion versus -4.08 billion.
  • China Trade balance, tentative December 7 Estimate 307B vs 325B last.
  • New Zealand Global dairy trade GDT) Price index. Tuesday, December 6 typically around 10:30 AM ET. The last results showed a gain of 4.5%

Central bank speakers:

  • Monday, December 5: FOMC member Dudley speaks at 8:30 AM ET/1330 GMT.
  • Monday December 5 at 2:05 PM ET/ 1905 GMT. Fed's Bullard speaks. That will be the end of Fedspeak until the FOMC decision on December 14th