Start your trading prep for the week by plotting these upcoming economic releases and market events on your schedule and checking out these potential plays.
Chinese data dump (Nov. 14, 2:00 am GMT)
Comdoll traders, listen up! The world’s second largest economy and one of the top consumers of commodities is set to report how it’s been faring lately.
Data on industrial production, fixed asset investment, retail sales, and foreign direct investment are all up for release in tomorrow’s Asian trading session and these numbers will provide insights on China’s appetite for raw materials and commodities.
Keep in mind, however, that analysts are expecting weaker business numbers for October while consumer demand based on retail sales could tick slightly higher.
U.K. top-tier reports (Nov. 14-16)
The United Kingdom has its fair share of economic data on this week’s docket, starting from the CPI due on Nov. 14, 9:30 am GMT.
Now rising inflation has been one of the decision factors for the BOE’s recent interest rate hike, so this report is likely to garner a lot of attention and potentially a big reaction from sterling. Headline CPI is slated to rise from 3.0% to 3.1% while core CPI could climb from 2.7% to 2.8%.
Later on in the day, BOE head honcho Carney is scheduled to participate in a panel discussion titled “At the heart of policy: challenges and opportunities of central bank communication” in Frankfurt, possibly providing more clues on future central bank action.
On Wednesday, the U.K. jobs figures are up for release, and the average earnings index could steal the show as policymakers are mindful of wage growth as well. U.K. retail sales are due the next day, and this should indicate whether or not consumers are still reeling from the impact of higher price levels.
Japanese preliminary GDP (Nov. 14, 11:50 pm GMT)
We’ll get our first look at how the Japanese economy fared overall in Q3 when it releases the preliminary version of the GDP report this week.
Analysts are expecting to see a larger contribution from inventory investment during the period but other components might fail to impress. For one, consumer spending has slowed in the Q3 months while financial confidence showed signs of strain on weaker housing investment.
If so, traders could price in an even longer period of easy monetary policy by the BOJ, especially after PM Abe’s victory in the elections signaled strong support for these moves.
U.S. CPI and retail sales (Nov. 15, 1:30 pm GMT)
Although a Fed December hike has been mostly priced in, dollar traders still seem wary of any signs that could prevent the central bank from hiking one more time.After all, headline CPI could post a meager 0.1% uptick for October, much lower compared to the earlier 0.5% gain. Headline retail sales could post a flat reading for the month versus the earlier 1.6% increase.
Keep in mind that NFP readings have been coming in weaker than expected for the past three months, likely weighing on financial confidence and spending behavior. To top it off, average hourly earnings fell flat in October, so average Joes were probably in no mood for shopping sprees.
Australian jobs data (Nov. 16, 12:30 am GMT)
The Land Down Under is expected to report a gain of 18.9K in hiring for October, slightly slower compared to the previous month’s 19.8K increase. Still, this could be enough to keep the unemployment rate steady at 5.5%.
Prior to this, Australia will already release its quarterly wage price index on Nov. 15, 12:30 am GMT and it might also give a better view of the labor situation and how it relates to income growth.
Canadian inflation data (Nov. 17, 1:30 pm GMT)
Last but certainly not least are Canada’s inflation reports due on Friday’s New York session.
Now the BOC already signaled its intention to pause from its hiking spree for now, so downbeat readings could lead market watchers to think that tightening ain’t set to resume anytime soon. Headline CPI is projected to post a measly 0.1% uptick while other measures of price changes could also retreat.
Charts to Watch:
First up is this falling wedge pattern on AUD/JPY that might be in for a breakout once the Chinese reports are out. This wedge is around 300 pips tall so the resulting rally or selloff could last by the same amount.
Japan’s preliminary GDP release could also serve as a catalyst later in the week, especially if the actual reading disappoints and supports the idea of the BOJ staying dovish for much longer.
This pair previously broke past the inverse head and shoulders neckline to confirm that an uptrend is due, but price is still retesting the broken resistance before gaining traction on its climb.
This lines up with a newly-forming ascending trend line right around the 1.6600-1.6650 minor psychological level. Stochastic appears to have moved higher but is hesitating, which suggests that traders are holding out for the U.K. numbers lined up.
Also, don’t forget that Brexit updates and the goings-on in PM May’s government could also lead to surprise moves here and there.
If you’re 50/50 on the potential outcome of Canada’s CPI reports and its likely impact on BOC tightening hopes, then this setup might offer a straddle opportunity.
EUR/CAD is testing the area of interest at the middle of its range around the 1.4750 minor psychological level. A bounce could take it back to the top at 1.5015 while a break lower could mean a move towards the floor at the 1.4500 handle.