It’s NFP week, forex friends! Here are the top-tier events you should be preparing for if you’re trading the dollar in the next couple of days.
ISM manufacturing PMI (Sept. 3, 3:00 pm GMT)
ISM’s report showed the manufacturing industry clocking in an index reading of 51.2 in July, as the U.S.’ trade war with China takes its toll on the market.
New orders, employment, prices, backlog, new export orders, and imports all took hits, while production, supplier deliveries, inventories improved during the month.
The weaker-than-expected release got mixed in with trade war jitters at the time and helped drag the dollar lower against its major counterparts.
This week market players see ISM’s report improve from 51.2 to 51.5 for the month of August.
Aside from a gauge of manufacturing activity in the world’s largest economy, ISM’s report also has an employment component, which could give us a clue or two about Friday’s payroll readings.
Trade balance (Sept. 4, 1:30 pm GMT)
Are Trump’s moves really helping Uncle Sam’s trade deficit?Last month we found out that it barely changed in the month of June. Trade deficit was at $55.2B in June, a bit lower than the $55.3 figure seen in May. A closer look told us that exports had dropped by 2.1% for the month while imports only dipped by 1.7%.
Like in the ISM’s release, the trade balance report came out just as traders were worrying over the impact of escalating trade tensions between the U.S. and China.
This week traders see Uncle Sam maintaining its $55.2 trade deficit in August. Keep close tabs on the deets, though, as the trend of exports and imports could affect a lot of industries in the U.S.
NFP means we’re Not Forgetting (trading) Plans on Friday! Well, at least that’s what I’m trying to make stick around the office. I don’t think it’s working.
For newbies, out there, know that non-farm payroll (NFP) Fridays is a monthly event when we see Uncle Sam’s top employment-related data from the previous month.
Last we saw a net addition of 164,000 for the month of July, a bit lower than the expected 165,000 figure and WAY lower than the 193,000 addition in June.
Not surprisingly, the dollar fell across the board to new intraweek lows at the release.
This week market players see a net addition of 162,000 jobs while the unemployment rate is expected to remain at 3.7% and average hourly earnings is seen maintaining its 0.3% growth.
Remember that strong domestic consumption is one of the biggest reasons why a lot of market players aren’t freaking out over a potential recession.
If the U.S. jobs market starts to show weakness, then we could see interest rate cut speculations shoot up and maybe prompt some traders into dumping their money on “safe” havens.
Missed last week’s price action? Read USD’s price recap for August 26 – 30!