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Weekly Forecast – May 15


Date of publication: May 15, 2017 | Author: Tim Clayton

Trends in oil and commodity prices will also be an important focus after further volatility over the past week, especially with the crucial OPEC meeting due on May 25th. US political developments are liable to overshadow economic developments with further uncertainty surrounding President Trump’s next moves.

US

There are no very high-profile US data release for the week with second-tier data due on industrial production and housing starts as well as jobless claims.

The New York and Philadelphia Fed manufacturing surveys on Monday and Thursday respectively will be watched closely given some evidence of a slowdown in manufacturing.

Political developments will be important as the fall-out from President Trump’s firing of FBI Director Comey continues. The choice of a replacement will be important with any choice of a credible candidate helping to ease tensions to some extent. The investigation into Russian activities in the US election will also be important.

UK

There are a series of significant UK data releases with the April inflation data on Tuesday likely to gain most attention, especially given the risk of seasonal distortions. The annual rate is likely to increase to the strongest rate for close to four years.

The labour-market data will be released on Wednesday with the retail sales announcement on Thursday and this is also likely to be distorted by seasonal factors.

Markets will monitor the UK General Election campaign and commentary on Brexit negotiations, although the impact is likely to be measured.

Euro-zone

The final Euro-zone April inflation data will be released, although the overall impact is likely to be limited.

Markets will continue to monitor the French political developments following the inauguration of President Macron as campaigning will start for the June parliamentary elections.

Commentary from ECB officials will continue to be a very important focus as the monetary-policy debate intensifies ahead of a crucial June meeting.   

International

The latest data on Canadian consumer inflation and retail sales will be released on Friday.

The latest Chinese industrial production data is unlikely to have a major impact.

Australian employment data will be an important factor during the week and could have important implications for interest rate expectations.

Geo-political issues will be watched closely with a further focus on North Korea.

Forecasts

Currency pair Spot 1-week forecast 1-month forecast
EUR/USD 1.094 1.090 1.110
USD/JPY 113.2 112.5 110.5
EUR/GBP 0.848 0.845 0.840
GBP/USD 1.299 1.290 1.321
AUD/USD 0.739 0.745 0.750
USD/CAD 1.371 1.355 1.335
USD/SGD 1.404 1.400 1.395
USD/HKD 7.791 7.790 7.785
NZD/USD 0.686 0.690 0.700
GBP/JPY 146.9 145.1 146.0
GBP/AUD 1.757 1.731 1.762
GBP/NZD 1.894 1.869 1.888
GBP/SGD 1.823 1.806 1.843
GBP/HKD 10.12 10.05 10.29
GBP/CHF 1.298 1.288 1.304

 

 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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