Weekly trading forecast April 8 - 12

US Non-Farm Payrolls report started a series of volatile trading session last Friday. Financial markets are getting close to the decisive phase before the summer vacation season, and this upcoming week will be crucial for major assets. Cyclical economic reports enter the final stage before several major Central Banks’ meetings and rate decisions. Global investors will have a close look at many macroeconomic events, trying to predict monetary policy in several regions across the globe. Gross Domestic Product data will be published to draw a resulting line of economic growth in the first quarter. Regulators will also monitor inflation and unemployment figures to adjust the supportive measures. The European Central Bank opens the series of meetings this Wednesday, while ECB President Draghi’s press conference will be widely awaited to clarify many uncertainties related to the central bank’s actions. The Federal Open Market Committee will publish recent meeting minutes on the same day, therefore, higher volatility is expected not only for EUR/USD but also for other major currency pairs. Chinese data will have a traditional impact on the emerging high-yield market and export-oriented commodity currencies. Crude oil speculators will keep an eye on US inventories report to assess the demand in the world’s leading economy. Precious metals traders and fixed-income investors will keep watching the situation with US 10-year Treasury yields.

Monday, April 8.

The trading week will kick off with data from China. The second world’s largest economy will publish lates FX reserves, which are expected to grow by 5 billion USD in March. The overall figure is seen at the level of $3.095 trillion, and any shift might affect the USD/CNY (offshore Chinese Yuan exchange rate, traded in Hong Kong). Japan will support its neighbour with an active trading session as Adjusted Current Account will be released in Tokyo, influencing the financial sector. Japanese Economy Watchers index and Household Spending would not have a massive impact on USD/JPY, however, more considerable volatility might take place, especially in the light of Friday’s US NFP report. The UK economists will watch inflation expectations update, while the EU calendar is empty. Therefore, both Euro and Pound rates will be affected by Brexit talks and weekend’s headlines. Canadian Housing Starts and Building permits are due to release at 12:15 PM GMT, and the Bank of Canada will keep a close eye on that report as the housing sector is traditionally recognised for the regulator’s monetary policy decisions. The US economy will publish Factory Orders and CB employment trends, which should drive the equities market in some sectors. However, the US dollar might stay in a tight range versus its major peers on Monday.

Tuesday, April 9.

Tuesday will continue the busy trading week with Australian Home Loans and Swiss Unemployment data. The European economic calendar will begin with Italian Retail Sales and ECB Bank Lending survey. The single European currency might be vulnerable to further weakening as those reports will be the last ones before the ECB meeting and rate decision. US Jolt Jobs openings will be the only significant event on the other side of the Atlantic. Traders will try to update conclusions made after Friday’s NFP report for the labour market prospects. FOMC Member Clarida will host a press conference in regards to the monetary policy and economic growth.

Wednesday, April 10.

South Korean unemployment rate will affect the price action for the USD/KRW currency pair early Wednesday. Japan will release a whole pack of data later. Bank Lending, Core Machinery orders, Producers Price Index and Machine Tool orders - those events will drive USD/JPY, while AUD/JPY might have an extremely volatile trading session as Australian Westpac Consumer Confidence survey will be published at the same time. Another interesting fact is that both central banks officials will speak on Wednesday - the Bank of Japan’s Governor Kuroda and the Reserve Bank of Australia Assistant Governor Debelle. Those press conferences might force currency speculators to trade more actively as the monetary policy prospects will be discussed. Sterling traders will focus on the British GDP report later on Wednesday. A preliminary reading of 0.2% month-over-month is forecasted by analysts, while the recent data showed that the British economy might surprise investors with a faster growth pace. In addition, UK Construction Output, Index of Services, Industrial and Manufacturing Production and Trade Balance will be published. GBP/USD should have a wild price action during those events due to their importance for the Bank of England’s decision later in April. OPEC monthly report should affect WTI and Brent Crude Oil prices as the supply volume will be updated for the first quarter of 2019. If leading oil producers were able to cut the oil output and production significantly, then the black gold would continue the uptrend. Otherwise, we might see a deep technical retracement. Another side of the coin will be shown by the US crude oil inventories report later in the American trading session. The demand and consumption also matter for oil speculators so that an opposite wave might be charted on Wednesday.

Source: vestikavkaza.ru

Despite the importance of all reports and updates mentioned above, the headline event is the ECB meeting, interest rates decision, economic statement and press conference. So far, economists and analysts predict the regulator to continue the dovish line, increase the volume of additional liquidity injected into the financial system, provide EU exporters with deeper supportive measures and leave the monetary policy extremely soft. The main reason is that the EU economy slipped into a technical recession with the slowest growth pace since 2016. Global investors will listen to ECB President Mario Draghi very carefully during his press conference as the future of regulator’s steps is still unclear. If he was able to convince traders that things aren’t as bad as most of the bears would have thought, then EUR/USD might try to recover some of its recent losses. However, that kind of scenario is doubtful as Draghi would keep the ultra-dovish rhetoric, most likely. As a result of an extremely volatile session, we might see EUR/USD rewriting historical lows and acceleration the downtrend. FOMC meeting minutes could have the same effect as the US dollar is vulnerable to the Fed’s monetary policy as well.

Thursday. April 11.

Chinese Inflation figures will be crucial for emerging markets, German, French and EU CPI will affect the euro exchange rate (with chances to accelerate the selling pressure if the data was in the red), Australian and New Zealand inflation updates will weigh on commodity currencies. The US data will be in the market’s focus on Thursday as the Producer Price Index will be released (+0.3% month-over-month predicted).

Friday, April 12.

The same tendency would be noticed during Asian and European trading sessions as per Thursday. China will update Trade Balance, Imports and Exports figures; Eurozone will release inflation data and Industrial Production. One of the emerging markets, India, will show the latest results of the economic growth with a pack of reports such as CPI, FX Reserves and Industrial Production. US Export and Import Price Indexes, as well as Michigan Consumer Sentiment, Current Conditions and Inflation expectations, will show where the leading world’s economy is headed.
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