Forex Cheat Sheet: NFP Week

Mark your calendars, forex geeks! It’s another non-farm payrolls (NFP) week and you wouldn’t want to miss the potential market movers on tap over the next couple of days. Here’s a cheat sheet on the reports that you shouldn’t miss.

1. Central Bank Statements

Its interest rate is one of the biggest factors of a currency’s demand and forex investors can’t better hints of its future levels than in central bank statements and speeches. Central banks also give their assessment on how well the economy is doing and jawbone their currencies when needed.

BOC Governor Stephen Poloz speech
-April 29, 7:30 pm GMT
-In his recent speeches Poloz has said that interest rates are likely to stay low for a long period of time and that a rate cut isn’t out of the table.

BOJ monetary policy statement
-April 30 during the Asian session
-This would be the second BOJ statement since the sales-tax hike a the start of the month. The BOJ will also print its economic outlook and conduct a press conference. Recall that the central bank has upgraded its growth forecasts in its last two policy meetings.

FOMC statement
-April 30, 6:00 pm GMT
-In its last statement the Fed had tapered its asset purchases by another $10 billion, downgraded its growth forecasts, and removed its 6.5% unemployment threshold.

Fed Governor Janet Yellen speech
-April 30, 12:30 pm GMT
-This would be a perfect opportunity for Yellen to set the markets straight in case traders didn’t interpret the FOMC statement the way they wanted to. Remember that Yellen is also open to maintaining stimulus if necessary.

2. GDP reports

As you’ve learned in your Econ101 class, a gross domestic product (GDP) report is simply the sum of total value of goods and services produced in a country. It can affect a currency’s demand and interest rates since the central bank and local and foreign investors are closely watching it. They are usually printed on a quarterly basis although Canada releases a monthly figure.

UK preliminary GDP (quarterly)
-April 29, 8:30 am GMT
-Expected to grow by 0.9% vs. 0.7% in Q4 2013

Canadian GDP (monthly)
-April 30, 12:30 pm GMT
-Expected to print 0.2% uptick vs. 0.5% increase in January

US advance GDP (quarterly)
-April 30, 12:30 pm GMT
-Expected to show 1.6% growth like its previous reading

3. PMIs

A purchasing managers’ index (PMI) measures the overall business conditions in the industry. A reading above 50.0 denotes industry expansion while a reading of 49.9 and below usually hints at yep, you guessed it – contraction.

Chinese official manufacturing PMI
-May 1, 1:00 am GMT
-Expected at 50.5 vs. 50.3 last month. The HSBC reading released last week clocked in at 48.3 vs. 48.0 previous.

UK manufacturing PMI
-May 1, 8:30 am GMT
-Expected at 55.4 vs. 55.3 last month

US ISM manufacturing PMI
-May 1, 2:00 pm GMT
-Expected at 54.3 vs. last month’s 53.7 reading.

UK construction PMI
-May 2, 8:30 am GMT
-Expected to drop to 62.2 vs. its 62.5 reading for March.

4. Euro Zone reports

On a regular day traders probably wouldn’t pay much attention to the reports below but this week one really negative reading could spark talks about more stimulus from the European Central Bank (ECB).

German reports
-Bundesbank monthly report (April 28), GfK consumer climate (April 29, 6:00 am GMT), preliminary CPI (April 29), retail sales (April 30, 6:00 am GMT), unemployment numbers (April 30, 7:55 am GMT)

CPI flash estimate
-April 30, 9:00 am GMT
-Expected at an annualized rate of 0.8% vs. 0.5% in March. A lower-than-expected reading would contradict the ECB’s belief that inflation would rebound as temporary distortions pass. It could also prompt speculations of the ECB using stimulus tools such as negative interest rates or asset purchases.

Euro Zone unemployment rate
-May 2, 9:00 am GMT
-Expected to remain at 11.9% like last month

5. U.S. Non-farm Payrolls Report

It’s not called the NFP week for nothing! Forex traders pay close attention to this report because Uncle Sam is the largest economy in the world and the Fed look to this report for hints on how to proceed with its monetary policy changes. In fact, Yellen specifically said that future tapering would depend on the outlook for the labor market.

Unemployment rate
-May 2, 12:30 pm GMT
-Expected to drop to 6.6% vs. last month’s 6.7% reading

Non-farm payrolls report
-May 2, 12:30 pm GMT
-Expected to show 215,000 new jobs filled against last month’s 192,000 reading