Weekly trading forecast September 3 - 7

The economic calendar for the first trading week of September is packed with important events and reports which become more significant in the scope of the upcoming series of central banks’ meetings. These events may or may not change the overall decisions in the last minute, so the volatility is expected across the board for all of the major currency pairs and other assets in the financial markets.

Monday, September 3.

Despite the long weekend in the United States in Canada because of the Labour Day celebration, the first trading day of September is traditionally important to identify the trend for the whole Autumn. The economic calendar in Asia and Europe will determine the trading day price action and it starts with New Zealand reporting Exports and Imports results in the second quarter. Australian AIG Manufacturing Index, Business Inventories and Retail sales will influence the AUD/USD pair. Current expectations are rather pessimistic for both countries and there is a huge probability for Kiwi and Aussie to keep the downtrend in case of the lack of support from fundamentals. Japanese Q2 Capital Spending will be important for USD/JPY traders and Nikkei stock index. Caixin Manufacturing PMI in China is going to show how far the recent slowdown might go in the nearest future. There are two central banks officials to speak on Monday: Kuroda from BoJ and Mersch from ECB. Italian, French, German and EU Manufacturing PMI reports will answer the question regarding the EUR/USD weakness. Sterling bulls will watch British Manufacturing PMI report scheduled for release at 09:30 AM GMT in order to get some fresh support for the pound. OPEC meeting starts on Monday in the U.S. and oil traders will watch closely the reaction of oil exporters for the worldwide demand change.

Labour Day celebration
Source: www.history.com

Tuesday, September 4.

Reserve Bank of Austalia kicks off the series of rate decision meetings on Tuesday. The RBA Rate Statement is going to be published at 05:30 AM GMT together with the decision which is widely expected to leave the interest rates unchanged. Although AUD/USD traders will be reading every single word in the statement trying to catch the regulator’s sentiment for the upcoming months. We do not expect significant changes in the central bank dovish rhetoric due to several pessimistic economical reports published in August, so the Aussie might keep falling, most probably. RBA Governor Lowe’s speech is scheduled for 10:30 AM GMT. British Construction PMI will be important for sterling recovery, while European reports include Spanish Unemployment change and EU PPI, the impact of which is seen to be limited though. South Africa will report annualized second-quarter GDP. The recent downgrade revision lowers the chances for Rand recovery and we might see further bullish spike of USD/ZAR. The ISM Manufacturing PMI starts the busy week in the U.S. after the long weekend. The market consensus is 57.6 for the headline reading while some of the components are seen mixed. Any shift to positive or negative territory might have an influence on the greenback demand on Tuesday.

Wednesday, September 5.

Aussie will continue being in the market’s focus on Wednesday with the GDP report due to release at 02:30 AM GMT. Services PMI reports will be published for several countries across the European Union, while British Services PMI is going to identify further trend for EUR/GBP and other sterling cross-rates. European Retail Sales and ECB Praet speech will be the last events for the European session. The U.S. import and export numbers will be in focus for the American trading session, but the main event is going to happen in Canada which will report Labour Productivity and Trade balance in July. Those will be the last economic reports before the BoC meeting and rate decision, which is scheduled for 03:00 PM GMT. Although the market consensus is ‘unchanged’ for the interest rates at 1.50% level, we might expect a surprisingly hawkish move from the regulator with 25 basis points hike. This would drop USD/CAD prices below 1.2850 in a blink of an eye. Anyway, the volatility is going to be huge for the pair and BoC Statement will play a big role in it because investors will try to find the mid-term perspective for the Loonie. Three Federal Reserve officials are going to speak on Wednesday: Williams, Bostic and Kashkari. The U.S. Crude Oil Inventories report is not to be missed for the commodity traders.

Thursday, September 6.

Australian Trade balance is almost the only one report for the whole Asian trading session on Thursday. But traders will keep listening to the central banks' officials, and Bank of Japan Board Member Kataoka will hold the press conference right after the release of Japanese Foreign investments in stocks and bonds. The GDP report is due to release from Switzerland and it is going to be the last one before the Swiss Central Banks meets for the rate decision later in September. There are lots of doubts among the market players that Swiss Bank is going to step off the recent negative interest rates policy, especially in the current financial conditions worldwide. Swiss Franc remains one of the safe-haven currency despite the volume of its trading has been lowered somewhat compared to pre-crisis levels before 2008. German Factory orders and Spanish bonds auctions - these events will determine the European trading session. The economic calendar in the United States is comparatively free of major risk events. ADP Employment change and Labour productivity will influence traders’ sentiment before the main event of the week - Non-Farm Payrolls which will be published next day.

Friday, September 7.

Friday will be the biggest trading day for the greenback not only for the upcoming week but, possibly, even for the whole month. Traditionally, traders expect the Non-Farm Payrolls release and there is no huge volatility before the New York opening. So, German Unemployment Rate and industrial production together with French Trade Balance and EU GDP might have a limited impact for EUR/USD momentum. The only exception could become the Halifax House Price Index which is scheduled for 09:30 AM GMT. Sterling bulls are looking for any optimistic data from the British economy and even a slight positive chan
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