Strategy Reports

September 13
The week begins with a look at New Zealand retail sales and the UK’s consumer confidence.
NZD - 22:45 GMT: New Zealand July Retail Sales (M/M) (Exp: +0.0% Prior: +0.9%)
New Zealand July Retail Sales Ex-Autos (M/M) (Exp: +0.1% Prior: +1.5%)As with most economic data, better than expected results should give a lift to the local currency, and this month’s report is no exception.

GBP – 23:01 GMT: UK August Nationwide Consumer Confidence Index (Exp: 60 Prior: 56)
Another textbook economic indicator, a better than expected result should strengthen sterling, while a weaker number will hurt it.
 
September 14

Tuesday’s highlights include the UK’s CPI report, followed by the German ZEW survey, U.S> retail sales, Canadian labour productivity and a speech from Bank of Canada Governor mark Carney.
GBP - 8:30 GMT: UK August CPI (M/M) (Exp: 0.3% Prior: -0.2%)
UK August CPI (Y/Y) (Exp: +3.0% Prior: +3.1%)
Inflation is the core mandate for the central bank, and the central bank has expressed some concerns about it running rampant down the road if left unchecked. Consequently, higher than expected readings could cause the pound sterling to take back some of its recent losses, while a weaker number raises the chance for the central bank to remain on hold for a longer period of time.

EUR - 9:00 GMT: German September ZEW Economic Sentiment (Exp: +10 Prior: +14.0)
German September ZEW Current Situation (Exp: +50 Prior: +44.3)
Although volatile and somewhat unpredictable, the ZEW survey correlates relatively well with the German Ifo index and is consequently a fair measure of growth for Germany. On the other hand, the ZEW surveys market participants only, so the index fails to take into account the health of the broader economy. Market reaction is usually short term, unless other economic data support its findings.

USD - 12:30 GMT: U.S. August Advance Retail Sales (Exp: +0.3% Prior: +0.4%)
U.S. August Retail Sales Less Autos (Exp: +0.3% Prior: +0.2%)
U.S. August Retail Sales Ex Auto & Gas (Exp: +0.4% Prior: -0.1%)
The U.S. consumer will be critical to the global economic recovery and until he/she starts spending again, true optimism cannot return to the markets. An upbeat reading will should spark a U.S. dollar rally against the yen, while a poor number will likely cause a sell off. Retail sales have the potential to set the tone for the day.

CAD – 12:30 GMT: Canadian Q2 Labour Productivity (Exp: -0.5% Prior: +0.8%)
Canadian Q2 Capacity Utilization (Exp: 75.5% Prior: 74.2%)
Some improvements in labour productivity and capacity utilization are good for the economy, and consequently the Canadian dollar, while declines should weaken the currency.

CAD – 10:45 GMT: BOC Governor Carney Speaks in Berlin
After the central bank hiked rates to 1.00% last week, market participants will be interested in knowing whether or not the BOC is disposed to continue raising rates. Last week’s accompanying statement left the door open to more rate hikes, but the markets aren’t totally convinced, having priced in a only a 30% chance of another hike in October. Remember, higher rates mean a stronger currency.
 
September 15

The actions heats up on Wednesday with traders watching the Australian consumer confidence report, followed by UK jobless claims, the euro zone CPI report, the Empire Fed’s manufacturing index, Canadian manufacturing sales, U.S. august industrial production, the Reserve Bank of New Zealand’s interest rate decision, and the Japanese tertiary index.
 
AUD - 0:30 GMT: Westpac September Consumer Confidence (M/M) (Prior: +5.4%)
Consumer confidence in Australia has been progressing steadily over the last several months and there is no reason to expect otherwise, with the economy recovering.

GBP - 8:30 GMT: UK August Claimant Count Rate (Exp: 4.5% Prior: 4.5%)
UK August Jobless Claims Change (Exp: -3.0K Prior: -3.8K)
The pound sterling has been ravaged by poor economic fundamentals in the UK and a poor employment report will add to the country’s woes. On the other hand, with so much sterling being sold in recent months an upbeat report might present a good buying opportunity.

EUR –9:00 GMT: Euro Zone August CPI (M/M) (Exp: 0.2% Prior: -0.3%)
Euro Zone August CPI (Y/Y) (Exp: +1.6% Prior: +1.6%)
As a second look at the euro zone CPI, this report could be overlooked unless it comes in stronger than the preliminary estimate. That being said, rising CPI is a positive for the currency.

USD - 12:30 GMT: U.S. September Empire Manufacturing (Exp: +8.0 Prior: +7.1)
Although volatile and unpredictable, the Empire Fed manufacturing index is the first piece of manufacturing data we get for the U.S every month, and an upbeat number is usually greeted with optimism. If the recent risk aversion holds in the markets, the USD could strengthen on a weak number..

CAD – 12:30 GMT: Canadian July Manufacturing Sales (M/M) (Exp: +0.2% Prior: +0.1%)
Canadian manufacturing sales correlate with GDP, so a better than expected number should improve prospects on growth and consequently the Canadian dollar.

USD - 13:15 GMT: U.S. August Industrial Production (Exp: +0.2% Prior: +1.0%)
U.S. August Capacity Utilization (Exp: 75.0% Prior: 74.8%)
Another textbook example, any upside surprise here is likely to be good for the U.S. dollar against the yen, but perhaps bad against other currencies as the risk trade continues. As a top tier report, the moves could be longer lasting.

NZD – 21:00 GMT: RBNZ Official Cash Rate (Exp: 3.00% Prior: 3.00%)
The RBNZ has been hiking rates at recent meetings, and expectations are divided ahead of this decision. A hike is bullish for the NZD while no change would hurt the currency.

JPY - 23:50 GMT: Japanese July Tertiary Industry Index (M/M) (Exp: +0.7% Prior: -0.1%)
Alongside the GDP report, this indicator will likely be ignored by the markets.
 
September 16

Thursday’s highlights index the Australian consumer inflation expectations report, followed by a speech from Bank of Japan Governor Masaaki Shirakawa, UK retail sales, the European trade balance, the Swiss National Bank’s interest rate decision, U.S. weekly jobless claims, PPI, TIC flows, current account, and the Philadelphia Fed’s manufacturing report.
 
AUD - 1:00 GMT: Australian September Consumer Inflation Expectation (Prior: +2.8%)
Inflation is a big part of the Reserve Bank of Australia’s mandate, so an increase in inflation expectations could boost the aussie dollar.

JPY – 6:00 GMT: BOJ Governor Shirakawa Speaks at Brokerages’ Meeting
The Bank of Japan is under extra scrutiny these days to see whether or not the central bank will intervene to weaken the yen. Every time Shirakawa fails to do so strengthens the currency further.

GBP – 8:30 GMT: UK August Retail Sales (Y/Y) (Exp: +1.9% Prior: +1.3%)
UK August Retail Sales Ex Auto Fuel (Y/Y) (Exp: +2.8% Prior: +2.4%)
One of the more important economic data points out of the UK, stronger retail sales should be reason to take off some short positions on the pound sterling. On the other hand, a weaker number could be devastating.

EUR - 9:00 GMT: Euro Zone July Trade Balance SA (Exp: -€0.5B Prior: -€1.6B)
After the German trade balance released last week, this data point is not likely have any lasting impact on the euro.

CHF – 12:00 GMT: Swiss National Bank Rate Decision (Exp: 0.25% Prior: 0.25%)
With economists and market participants looking for no change to interest rates, focus will once again be on whether or not the Swiss national Bank plans to resume its FX interventions to weaken the franc and consequently prevent deflation. If the SNB continues to maintain that there would be deflation risks from allowing the currency to appreciate too much, the franc could sell off quite a bit.

USD - 12:30 GMT: W/E September 11 U.S. Initial Jobless Claims (Exp: +458K Prior: +451K)
U.S. jobless claims are rising, and this is supporting the USD as the risk trade continues to hold. That being said, this is the so called “survey week” during which the Bureau of Labor Statistics gathers the data for nonfarm payrolls so this week’s data could garner more attention from the markets.

USD – 12:30 GMT: U.S. August Producer Price Index (M/M) (Exp: +0.3% Prior: +0.2%)
U.S. August PPI Ex Food & Energy (M/M) (Exp: +0.1% Prior: +0.3%)
U.S. August Producer Price Index (Y/Y) (Exp: +3.0% Prior: +4.2%)
U.S. August PPI Ex Food & Energy (Y/Y) (Exp: +1.3% Prior: +1.5%)
The producer price index is used to predict the consumer price index in the United States, so the greenback could rally if PPI inflation comes in stronger than expected.

USD – 12:30 GMT: U.S. Q2 Current Account (Exp: -$125.0B Prior: -$109.0B)
The U.S. current account is one of those reports which are more likely to be impacted by FX than the reverse, but then again, the data helps confirm traders’ positions.

USD - 13:00 GMT: U.S. July Long-term TIC Flows (Exp: $42.0B Prior: +$44.4B)
U.S. July Total Net TIC Flows (Prior: -$6.7B)
TIC flows are usually affected more by exchange rates than the contrary, but unexpected surprises can cause traders to adjust their positions. Large capital outflows from the U.S. are consistent with selling of the greenback.

USD – 14:00 GMT: U.S. September Philadelphia Fed. (Exp: +0.0 Prior: -7.7)
More reliable than the Empire Fed index, the Philly Fed manufacturing report is likely to send the greenback lower against the yen if weaker than expected, particularly if the Empire Fed index supports its findings. On the other hand, a poor number could cause traders to remove some of their USD-long positions.
 
September 17

The week concludes on the euro zone current account, followed by U.S. CPI and the first look at the Reuters / University of Michigan’s consumer sentiment index.
EUR - 8:00 GMT: Euro Zone July Current Account SA (Prior: -€4.6B)
Euro Zone July Current Account NSA (Prior: +€1.0B)
The euro zone current account is one of those reports which are more likely to be impacted by FX than the reverse, but then again, the data helps confirm traders’ positions.

USD - 13:30 GMT: U.S. August Consumer Price Index (M/M) (Exp: +0.3% Prior: +0.3%)
U.S. August CPI Ex Food & Energy (M/M) (Exp: +0.1% Prior: +0.1%)
U.S. August Consumer Price Index (Y/Y) (Exp: +1.1% Prior: +1.2%)
U.S. August CPI Ex Food & Energy (Y/Y) (Exp: +1.0% Prior: +0.9%)
Inflation is not really on anyone’s radar for now so CPI is not moving the markets as much as usual. Nevertheless a quicker return to inflation will draw fire for the Federal Reserve. Any large upside surprises has the potential to send the greenback higher.

USD - 15:00 GMT: U.S. Preliminary September U. of Michigan November Consumer Sentiment (Exp: +70.0 Prior: +68.9)
As one of the earliest and more reliable readings on the state of the U.S. consumer, the preliminary Michigan report is likely to set the tone on consumption for the month. A bad reading will send the greenback lower against the yen, while a weaker score will spark a selloff in the currency.