Non-Farm Payrolls Back in the Spotlight - Weekly Report

The markets continue to be concerned over the Eurozone’s CPI numbers, especially after Germany reported that it had entered deflation for the first time in five years.

Deflation fears are affecting the value of the Euro versus the USD, with the common currency struggling to recover lost ground, especially after the Swiss National Bank unpegged the Swiss Franc from the Euro.

On Monday at 15:00, the US announces ISM Manufacturing PMI for January, a closely-watched indicator of economic health in which purchasing managers in the manufacturing sector reveal their signals about growth expectations. Some trading opportunities could arise on the USD crosses, depending on the index’s results, which are expected to remain at the level of 55.5.

On Tuesday the 3rd, the main highlight of the day is the Royal Bank of Australia’s Interest Rate Decision at 03:30, with the markets likely to be hyper-alert for unexpected announcements from the central banking sector. After the SNB’s unpleasant surprise and the ECB’s late entry into quantitative easing, any central bank decisions are under a magnifying glass. Later in the day, New Zealand releases its Unemployment Rate for the fourth quarter of 2014. That announcement is at 21.45, and was previously at the level of 5.4 percent.

The market could see trading opportunities at 08:00 on Wednesday, when the ECB meets for a non-monetary policy agenda, but of course, trader radars are always on alert when it comes to the ECB, which recently announced a 60-billion-euro per month asset buying programme to shore up the Eurozone’s economy. At 15:00, the US releases the ISM Non-Manufacturing PMI for January, which was previously reported at the level of 56.2.

Thursday brings more central bank action at 12:00 when the Bank of England announces its Interest Rate Decision and bond purchase programme. BoE has kept interest rates steady at 0.5%, and at this point traders don’t expect a change, especially since inflation is not at the most robust levels.
For the attention of AUD traders, at 01:30 on Friday, the Royal Bank of Australia releases its Monetary Policy Statement . The biggest-by-far event of the day is US Non-Farm Payrolls at 13:30, previously reported at 252K. The economic circumstances around this announcement are very interesting, with a weaker Euro and the Federal Reserve expected to raise interest rates later this year, NFP numbers this time round could have a powerful effect on the EUR/USD, and on market expectations over US economic growth.
Finally for the week, Canada releases its Unemployment Rate for January at 13:30, previously at the level of 6.7 percent.