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Weekly Forecast – May 1


Date of publication: May 1, 2017 | Author: Tim Clayton

US developments will tend to dominate the week ahead with a focus on economic data and the Fed policy meeting. The on-going rhetoric from President Trump will also have a significant impact in moving markets.

US

There is a raft of important US data releases during the week which will be important for sentiment surrounding the US outlook, especially with some evidence that momentum within the economy has faded.

The ISM manufacturing data will be released on Monday with the non-manufacturing data on Wednesday.

The ADP employment data will also be released on Wednesday ahead of the pivotal monthly employment report on Friday.

As well as the important economic data, the Federal Reserve will also announce its latest decision on interest rates, although there will be no press conference from Fed Chair Yellen and no updated rate projections from FOMC members.   

Developments surrounding US fiscal policy will continue to be a key focus during the week with a focus on the short-term funding bill as well as the on-going tax debate.

UK

The latest round of UK PMI data will be released during the week with the manufacturing data on Tuesday and services-sector data on Thursday. The data will be important for underlying monetary policy expectations.

The election campaign will be kept under surveillance, although only a limited impact is likely unless there is a big shift in opinion polls or major surprises in the local election results.

There will be a UK market holiday on Monday which will undermine liquidity.

Euro-zone

Euro-zone economic data releases are unlikely to have a major impact during the week, although markets will still be monitoring reaction to last week’s ECB policy meeting.

Developments surrounding the May 7th French Presidential election run-off will be watched closely with a focus on opinion polls and tensions will increase if there is evidence of increased support for Le Pen.

International

Geo-political issues could continue to have an important market impact with a notable focus surrounding North Korea.

There are further Chinese PMI data releases during the week following the weaker than expected manufacturing PMI release over the weekend.

The Reserve Bank of Australia will announce its latest interest rate decision with rates expected to be left unchanged at 1.50%, although the policy statement will be watched closely.

There will be important Canadian economic data with the trade and employment data due on Thursday and Friday respectively.  Rhetoric surrounding NAFTA will be an important focus during the week.

Forecasts

Currency pair Spot 1-week forecast 1-month forecast
EUR/USD 1.092 1.105 1.090
USD/JPY 111.3 112.0 110.0
EUR/GBP 0.845 0.845 0.835
GBP/USD 1.292 1.308 1.305
AUD/USD 0.748 0.750 0.755
USD/CAD 1.366 1.350 1.330
USD/SGD 1.393 1.392 1.400
USD/HKD 7.777 7.777 7.775
NZD/USD 0.687 0.700 0.705
GBP/JPY 143.8 146.5 143.6
GBP/AUD 1.728 1.744 1.729
GBP/NZD 1.880 1.868 1.852
GBP/SGD 1.799 1.820 1.828
GBP/HKD 10.04 10.17 10.15
GBP/CHF 1.282 1.284 1.299

 

 timTim Clayton is a market analyst with more than 20 years of experience in the financial markets, with particular focus on currencies. Holds an economics degree from University of New York. Writes for multiple publications including Investing.com and SeekingAlpha so he is on top of all the happening in the world of currencies and macro-economics. 

 

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