policy of the Central Bank, the OPEC meeting and NFP to pack FX Agenda
the weekend of Memorial Day US will shorten the trading week and compress the labor press in a week which is already filled with major events. The Organization of Petroleum Exporting Countries (OPEC) will meet in Vienna on Thursday and that day the European Central Bank (ECB) will publish its rate statement and forecasts. The US will release its employment indicators, as well as the manufacturing and non-manufacturing PMIs in a week that could make or break the possibility of 1 June Federal Open Market Committee (FOMC) increase in interest rates the meeting.
The European Central Bank (ECB) should not change monetary policy when it releases its statement Thursday, June 2 at 7:45 EDT. The market will follow speeches by President Mario Draghi ECB for details on the implementation of the corporate bond purchases starting in June, but the only surprise on the agenda could be forecasts of the ECB. Forecasts of March were put together using data horrible start of the year, which has improved and before the quantitative easing announced additional stimulus at the same time, the forecasts were published. The inflation forecast could reach 1.6 percent next year, putting less pressure on the ECB to ease monetary policy
The economic calendar USD Kick-off Tuesday, May 31 with the publication of consumer confidence data at 10 .: 0:00 EDT. ISM manufacturing PMI will be released Wednesday, June 1, at 10:00 am EDT. ADP private payrolls will be released Thursday, June 2 at 08:15 EDT to kick employment data a day later than usual because of the American holiday Monday. US unemployment claims will be released the same day at 08:30 am EDT. The biggest forex indicator, the US Non-Farm employment (NFP) will be released Friday, June 3 at 8:30 am and followed by the ISM Non-Manufacturing PMI at 10:00 AM EDT. Last June NFP before gaining further importance after the April FOMC minutes suggested that the Fed could raise rates if the US economy showed signs of a rebound after a weak first quarter.
ECB to keep rates unchanged give more details on the bond purchases
the European Central Bank (ECB) is highly expected to keep the rate unchanged at 0 interest and the deposit rate to -0.40 percent. The central bank delivered two massive QE announcements to a market that mostly moved against them or the ECB as delivered to expectations, or in the case of Mars during delivery but was Draghi comment on the limits of what the central bank was ready to do. The announcements in March purchases of corporate bonds as part of the increase to 80 billion in QE is still to be defined. Forecasts are suspected to be improved in all areas as economic conditions are better than in January on which current forecasts were based. A positive week for the dollar with strong economic indicators would reduce the pressure on the ECB to further relax to bring EUR down to stimulate growth. Rising interest rates the Fed in June went from a long shot to a likely scenario in the last month.
The EUR / USD depreciated 0.91 percent in the last week. The pair is trading near 1.1117 weekly hollow. The high of the week came on Monday at 1.1243 before a combination of comments from Fed members and little data, but mostly positive was published. Next week will be a striking contrast with wall to wall events involving the foreign exchange market.
OPEC Rifts and New Vienna expected Leadership
The price of oil is sitting near an 8-month high after crude oil supply disruptions given the extra push above the price level of $ 50. Canadian forest fires, sabotage in Nigeria and a strike of French oil sector reduced the amount of excess supply. However, these disturbances are temporary and producers continue pumping at record levels. The Organization of Petroleum Exporting Countries (OPEC) meets in Vienna at a time when the very existence of the group is strongly questioned and some of his biggest critics are the members themselves.
2016 began with the rapid depreciation of energy prices after investor anxiety was triggered by events in the Chinese stock market. As prices have stabilized there was a growing rumor that played in the financial press Saudi Arabia and Russia in the agreement negotiations to freeze production. Both parties submitted statements to feel the other side, but these informal conversations lead to a meeting in Doha to sign the agreement to freeze the production of oil. In attendance were members of OPEC and Russia, Mexico and five other non-OPEC countries. The talks failed to achieve the desired result. The main obstacle was the insistence of Saudi Arabia that Iran is part of the agreement. Iran's oil sector just had a western embargo lifted and is eager to return to the levels of pre-embargo production and publicly has always maintained that it would not be part of any production freeze. The failure of the oil of the Doha agreement did not have a massive impact on the market because that same weekend a major supply disruption caused by a strike by energy workers in Kuwait created the 'upward momentum for crude.
The gap between Saudi Arabia and Iran, the biggest OPEC producers, the market has to wonder why the organization exists in the first place and when they meet in Vienna June 2 as it is expected that current replacement Secretary General Abdalla Salem el-Badri will be announced. This will be the first general meeting of OPEC that the successor to longtime minister of oil Ali al-Naimi was replaced by Deputy Crown Prince Mohammed Bin Salman Al-Falih with Khalid, the former head of Saudi Aramco.
Clearly OPEC is Saudi Arabia, but the nation of the Middle East seems to wonder aloud if Saudi Arabia needs to OPEC. Members like Venezuela are a perfect example of the ups and downs of the price of oil dependence the nation has been forced to ration electricity and imposed a shorter workweek that cost reduction measures that revenue State shrinks with lower crude prices.
Saudi Arabia favors a war of market share driven by the price of low oil prices, which in turn hurt other members, but as long as the Saudi reserves and low-cost production can keep above water while other producers pass under it will be considered a victory. So far the strategy has paid off, early shale state in North America, but the cost could be the end of OPEC. The last time the organization cut oil production in 08 was that the financial crisis reduced demand for crude. OPEC will start its meeting Thursday, June 2 04:00 AM EDT
FX Market events to watch this week :.
Monday, May 30
9:30 p.m. AUD Building Approvals m / m
Tuesday, May 31
8:30 CAD GDP m / m
CB consumer confidence USD 10:00 am
CNY manufacturing PMI 9:00 p.m.
9:30 p.m. AUD GDP q / q
9:45 p.m. CNY manufacturing PMI Caixin
Wednesday, June 1
4:30 am GBP manufacturing PMI
10: 00 USD ISM manufacturing PMI
9:30 p.m. AUD Retail Sales m / m
9:30 p.m. AUD trade balance
Thursday, June 2
4: 30 GBP Construction PMI
All meetings ALL day OPEC
7:45 EUR Minimum Bid rate
8:15 USD ADP non-farm employment Change
EUR 9:30 pm press conference of the ECB
9:30 p.m. USD unemployment claims
Stocks 11:00 USD crude oil
Friday, June 3
4:30 GBP PMI services
8:30 CAD trade balance
8:30 USD Average hourly earnings m / m
USD 8:30 nonfarm employment change
8:30 USD unemployment
10:00 USD ISM non-manufacturing PMI
* All times EDT
for a full list of events planned in the foreign exchange market, visit the economic calendar MarketPulse
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