On The Slate This Week >>> 

  • USD Non-farm payrolls
  • UK PMIs
  • AUD Interest Rate decision and Monetary Policy statement

As we move into Q3 it appears that everywhere you look there is political turmoil. Just to provide some context, we have USA versus North Korea, the UK Prime Minister struggling to control her own party, Catalonia trying to hold an illegal referendum to split from Spain, heightened middle eastern tensions around The Kurdistan Regional Government and Turkish president threatening to cut off the Ceyhan pipeline and of course the ever-present danger of Russia! It’s because of all of this that the Forex market is somewhat unpredictable at present as it swings from one rumour to another and one political concern to another in the blink of an eye. Just to add to more confusion last week we also saw Pres Trump on Wednesday layout his proposals for a reformed tax system which the US economy seem to react quite well to with US stocks surging to record highs and the dollar receiving a bounce also. However, much like the health reforms these still need to be passed by Congress, and as such may never see the light of day. This adds further pressures on the USD as it appeared to react positively but has it reacted too soon?

There used to be a time in trading that you could somewhat predict the direction of a currency based on risk sentiment, it was either risk on or risk off and depending on you could assume certain assets would act in a certain way, this is becoming increasingly difficult because of the volatility around risk sentiment. All of these factors are a good reminder that Forex trading carries risk and that one of the biggest lessons you learn when trading through challenging times such as this is to ensure you use proper risk management techniques. Sometimes Forex trading isn’t about making money, it’s about protecting your capital, and with all the above this could very well be one of those times.

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Monday 2nd October

9:30 a.m.  | GBP | Manufacturing PMI | Prior 56.9 | Expected 56.3

A new month a new set of PMI readings. Manufacturing is one of the lesser important PMI readings for the UK but once again is a good indicator of economic health from feedback of 600 purchasing managers across the UK.

3 p.m. | USD | ISM Manufacturing PMI | Prior 58.8 | Expected 57.9

Pretty much exactly the same as the UK counterpart above and is a good indicator early on in the month as to what GDP might look like for Q2.

Now let’s look at the rest of the Forex trading week.

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Tuesday 3rd October

4:30 a.m. | AUD | Interest Rate decision and Monetary Policy Statement

There is little indication that the RBA are considering an interest rate hike at this meeting. There is also little anticipation around the statement but inevitably this is one of the big 3 releases for any economy so be prepared for volatility.

9:30 a.m.  | GBP | Construction PMI | Prior 51.1 | Expected 51.2

The 2nd of the UK PMI releases this week, and again while not a significant market mover, gives good indication on how well the economy is doing and what we can expect to see from Q2 GDP releases.

Wednesday 4th October

9:30 a.m. | GBP | Services PMI | Prior 3.2 | Expected 53.3

The 3rd and final PMI release for the UK and probably the most important due to the size of the services industry in the UK. This will give a significant indication as to where GDP may be running for Q2.

3 p.m. | USD | ISM Nonmanufacturing PMI | Prior 55.3 | Expected 55.5

As we approach the December Fed decision which is likely to be the soonest that we will see another interest rate increase this kind of release will be important to monitor.

Friday 6th October

1:30 p.m. | USD | Average Hourly Earnings | Prior 0.1% | Expected 0.3%

Very important and probably more important than non-farm payrolls as the Fed continues to look for signs of inflation. These releases will be the most watched by the Fed when it comes to deciding whether there is going to be another interest rate increase this year as suggested at the recent FOMC meeting.

1:30 p.m. | USD | Non-farm payrolls | Prior 156k | Expected 88k

Somewhat of a lacklustre expectation this month considering the benchmark is usually around 200k. However, we have just come through the summer season which historically tends to be quite slow as well as some of the impacts relating to the recent hurricanes. There is always volatility around this release but from a sentiment perspective is unlikely to have any significant impact, we have to look at this one release in the context of upcoming releases.

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