Welcome to another NFP week, forex fellas!
Here’s what analysts are expecting for the jobs report, plus the other catalysts you should keep tabs on.
Major Economic Events:
FOMC members’ speeches (starting Nov. 29, 8:00 pm GMT) – A handful of Fed policymakers are scheduled to give testimonies throughout the week, and any hints on monetary policy could push the Greenback around.
Main man Powell himself is set to deliver speeches for the first three days of the week, speaking in webinars, in front of the Senate Banking Committee, and before the House Financial Services Committee.
Do watch out for testimonies from FOMC officials Williams, Bowman, and Clarida as well.
Australian quarterly GDP (Dec. 1, 12:30 am GMT) – The Land Down Under is scheduled to print its Q3 GDP report midweek and might show a softer pace of growth compared to the earlier 0.7% expansion.Keep in mind that Australia underwent a fresh set of lockdowns among its major cities in the past quarter, likely limiting business and consumer activity once more.
A weaker than expected read might mean more downside for the Aussie while an upside surprise could shore up tightening expectations and boost the currency.
OPEC-JMMC meetings (starting Dec. 2) – With the spotlight on the energy crunch and the release of oil reserves these days, markets would likely have a strong reaction to the outcome of the OPEC technical committee meetings.
The cartel is under pressure to increase its production targets, given how major economies like the U.S. and China are taking it upon themselves to release crude oil reserves into the global market.
Now the OPEC is worried that this might spur a global glut, so they might refrain from boosting supply for now. Then again, they missed their output goal earlier on, which means they could be inclined to make up for it.
U.S. non-farm payrolls report (Dec. 3, 1:30 pm GMT) – Uncle Sam is due to release the November jobs figures, and a stronger increase compared to the earlier 531K upside surprise might spur strong gains for the scrilla.A weaker than expected result, on the other hand, could dash hopes of a Fed interest rate hike sometime in the middle of 2022. Leading indicators like the ADP non-farm employment change and ISM manufacturing PMI might also bring extra volatility.
The NFP consensus is for a 563K increase in jobs, which might be enough to bring the jobless rate down from 4.6% to 4.5%
Canada’s jobs report (Dec. 3, 1:30 pm GMT) – Canada is also scheduled to print the November jobs report, possibly showing a pickup of 50K in hiring versus the earlier 31.3K increase.
Forex Setup of the Week: GBP/CAD
This pair is sitting right at the bottom of its long-term range on the daily time frame, and a bounce might be due!
Will the OPEC meetings trigger a drop for the oil-related Loonie?If the technical staff recommends an even higher increase to the cartel’s output deal, crude oil could tumble and drag the correlated Canadian dollar down with it.
After all, big nations like the U.S. and China have already released oil reserves in the global market in an effort to keep price gains in check.
The upcoming Canadian jobs release is also worth watching, as a downturn in hiring growth could mean fresh downside for the Loonie since it could delay BOC tightening moves.
On the flip side, the BOE remains under strong pressure to tighten policy with rate hikes in order to keep a lid on inflation.
Technical indicators are suggesting further downside for GBP/CAD, though, as the 100 SMA is below the 200 SMA while Stochastic is heading south from the overbought region.