(30th October - 03rd November 2023) Weekly News Update by LQDFX

Daniel LQDFX

Trader
Jul 21, 2023
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Week of 30th October - 03rd November 2023


30 October 2023​

Monday​

On Monday, October 30, 2023, watch out for two important economic events: the release of Germany's Preliminary Consumer Price Index (CPI) month-on-month (m/m) data and Spain's Flash Consumer Price Index year-on-year (y/y) report. These reports will provide valuable information about inflation trends in these significant European economies.​


EUR - German Prelim CPI m/m​

Consumer prices play a crucial role in overall inflation, and currency valuation is affected by inflation because central banks often increase interest rates to fulfill their mandate of containing inflation when prices rise.

According to preliminary data for September 2023, German consumer prices increased by 0.3% compared to the previous month, matching the rate observed in August and aligning with market forecasts.

The next German Preliminary CPI m/m is set to be released on Monday, October 30, 2023, and the announcement will span the entire day.

The forecast for Germany's Preliminary Consumer Price Index m/m suggests a slight decrease, moving from 0.3% to 0.2%.

Last time, the German Prelim CPI m/m was announced on the 28th of September, 2023. You may find the market reaction graph (EURGBP M1) below:

1- EURGBP GERMAN PRELIM CPI mm EUR.jpg

EUR - Spanish Flash CPI y/y​

Consumer prices hold a significant share in total inflation, and currency valuation is closely linked to inflation. When prices rise, central banks tend to raise interest rates in line with their mandate to control inflation.

In September 2023, the Consumer Price Index (CPI) was estimated to have an annual inflation rate of 3.5%, according to a preliminary report by the NSI. This represented a significant increase of 0.9% compared to August, which had a 2.6% inflation rate. The rise was mainly attributed to higher electricity prices, which had fallen in September 2022. Additionally, there was a moderate increase in fuel prices, in contrast to a decrease in the same period the previous year. Excluding non-processed food and energy products, the estimated annual variation rate of underlying inflation decreased slightly by three-tenths to 5.8%.

TL;DR

Post Table 1.png

The upcoming release of the Spanish Flash CPI y/y is scheduled for Monday, October 30, 2023, at 08:00 AM GMT+1.

The forecast for the Spanish Flash CPI y/y stands at 3.5%, aligning with the previous projection.

Last time, the Spanish Flash CPI y/y was announced on the 28th of September, 2023. You may find the market reaction graph (EURJPY M1) below:


2- EURJPY Spanish Flash CPI yy EUR.jpg
 

Daniel LQDFX

Trader
Jul 21, 2023
86
0
12
42

31 October 2023​

Tuesday​

On Tuesday, October 31, 2023, a series of important financial announcements are scheduled that could have a substantial impact on the markets. These include China's Manufacturing Purchasing Managers' Index (PMI), Canada's Gross Domestic Product month-on-month (GDP m/m) data, the Bank of Japan's Interest Rate Decision, the US Employment Cost Index quarter-on-quarter (q/q), and Consumer Confidence figures, along with New Zealand's releases of Employment Change quarter-on-quarter (q/q) and the Unemployment Rate. These reports are expected to significantly influence market dynamics.​


CNY - Manufacturing PMI​

This data is crucial as it serves as a leading indicator of economic health. Companies react swiftly to market conditions, and their purchasing managers hold the most current and relevant insights into the firm's economic outlook.

In September, China's manufacturing sector experienced a notable development, marking its first expansion in six months, as revealed by an official survey published on Saturday. This positive trend was in line with a series of indicators that indicated the world's second-largest economy was showing signs of stabilization. The Purchasing Managers' Index (PMI), which assessed leading manufacturers, climbed from 49.7 to 50.2 in September, as reported by the National Bureau of Statistics. This shift propelled the index just above the critical 50-point threshold, distinguishing an expansion in activity from a contraction. The reading surpassed expectations, exceeding the forecasted 50.0 figure.

The upcoming Manufacturing PMI is set to be released on October 31, 2023, at 01:30 AM GMT+1.

The forecast for Chinese Manufacturing PMI suggests a marginal rise, shifting from 50.2 to 50.5.

Last time, the Manufacturing PMI was announced on the 2nd of October, 2023. You may find the market reaction graph (USDCNH M1) below:

3- USDCNH Manufacturing PMI CNY.jpg

JPY - BoJ Interest Rate Decision​

Interest rate changes by major central banks can significantly affect the foreign exchange market, often responding to monthly economic indicators. These changes can swiftly and strongly move the market, particularly surprise rate adjustments, making it crucial to predict and respond effectively for profit.

In its September meeting, the Bank of Japan (BoJ) unanimously maintained a -0.1% short-term interest rate and kept the 10-year bond yield target at around 0%. They had also retained the allowance band of 50 basis points on either side of the yield target and a 1.0% cap. The BoJ stated its commitment to patient monetary easing and responsiveness to economic developments, price dynamics, and financial conditions amidst high uncertainties. Their goal remained achieving a sustainable 2% price stability target with wage increases. The committee had also indicated readiness to take further easing actions if necessary, with Governor Kazuo Ueda suggesting a possible end to negative interest rates sooner, supported by wage data.

TL;DR

Post Table 2.png

The upcoming Bank of Japan interest rate decision is scheduled for Tuesday, October 31, 2023, at 03:30 AM GMT+1.

The forecast for the Bank of Japan (BoJ) Interest Rate Decision suggests a -0.1% value, in line with the previous announcement.


CAD - GDP m/m​

This is a significant metric as it functions as the most comprehensive measure of economic activity and serves as the primary indicator of the overall health of the economy.

In August 2023, Canada's economy experienced modest growth of 0.1%, driven by gains in the wholesale trade and finance and insurance sectors, although these were partially offset by declines in the retail trade and oil and gas extraction sectors. Meanwhile, July's GDP remained stagnant, following a 0.2% decline in June. Services-producing industries saw a 0.1% uptick, notably in mining & quarrying (except oil and gas) and accommodation and food services, while goods-producing industries contracted by 0.3%, primarily due to a manufacturing decline linked to a port strike in British Columbia, particularly affecting the chemical manufacturing subsector.

TL;DR

Post Table 3.png

The upcoming release of the GDP m/m data is scheduled for Tuesday, October 31, 2023, at 12:30 PM GMT+1.

The forecast for Canada's GDP m/m indicates a 0.1% change.

Last time, the GDP m/m was announced on the 29th of September, 2023. You may find the market reaction graph (CADJPY M1) below:

4- CADJPY GDP mm CAD.jpg

USD - Employment Cost Index q/q​

This indicator serves as an early signal of consumer inflation since when businesses incur higher labor costs, they often pass these increased expenses on to consumers.

During the second quarter of 2023, compensation costs for civilian workers in the United States increased by 1.0%, showing a slight easing from the 1.2% rise in the previous three-month period. This figure slightly missed market expectations of a 1.1% increase. Wages and salaries saw a 1.0% increase (compared to 1.2% in Q1), while benefit costs rose by 0.9% (compared to 1.2% in Q1). Compensation costs for both private industry workers and state and local government workers also saw a 1.0% increase. On a year-on-year basis, compensation costs had risen by 4.5% in the April to June period, down from a 4.8% increase in the first quarter.

TL;DR

Post Table 4.png

The release of the Employment Cost Index q/q is scheduled for Tuesday, October 31, 2023, at 12:30 PM GMT+1.

The forecast for the Employment Cost Index q/q is signaling a 1% figure.


USD - CB Consumer Confidence​

Financial confidence, with a substantial impact on consumer spending, which is the primary driver of overall economic activity, is closely watched as a leading indicator.

In September, the Conference Board Consumer Confidence Index declined to 103.0, down from an upwardly revised 108.7 in August. Despite a slight increase in the Present Situation Index to 147.1 from 146.7, the Expectations Index, which evaluates the short-term outlook on income, business, and labor market conditions, fell to 73.7 in September. This drop below the critical threshold of 80 has historically indicated the potential for a recession within the next year. It reflects mounting consumer concerns regarding an imminent recession, aligning with expectations of a brief economic contraction in the first half of 2024.

TL;DR

Post Table 5.png

The upcoming release of the CB Consumer Confidence is set for Tuesday, October 31, 2023, at 2:00 PM GMT+1.

The CB Consumer Confidence currently stands at 100, marking a decrease from the previous announcement, where it was at 103.

Last time, the CB Consumer Confidence was announced on the 26th of September, 2023. You may find the market reaction graph (GBPUSD M1) below:

5- GBPUSD CB CONSUMER CONFIDENCE USD.jpg

NZD - Employment Change q/q​

The creation of jobs serves as a crucial leading indicator for consumer spending, which constitutes a significant portion of overall economic activity.

New Zealand's job market exhibited resilience and growth, with a 1% increase in employment during the first quarter of 2023, building on the positive momentum of the preceding period, which saw a 0.8% rise. This steady upward trend in employment reflects the country's ability to adapt to changing economic conditions and seize emerging opportunities, contributing to economic stability and prospects for continued growth.

The upcoming release of the Employment Change q/q data is scheduled for Tuesday, October 31, 2023, at 9:45 PM GMT+1.

The employment change quarter q/q is currently forecasted at 0.7%.

Last time, the Employment Change q/q was announced on the 2nd of August, 2023. You may find the market reaction graph (NZDUSD M1) below:

6- NZDUSD EMPLOYMENT CHANGE UNEMPLOYMENT RATE.jpg

NZD - Unemployment Rate​

The quantity of individuals without employment carries significance as an indicator of the broader economic well-being. This is due to its close correlation with consumer spending and the conditions within the labor market, even though it is typically categorized as a lagging indicator.

New Zealand's unemployment rate climbed to 3.6% in the second quarter of 2023, marking its highest point since the June quarter of 2021. This figure exceeded both the previous quarter's 3.4% and market expectations set at 3.5%. Simultaneously, the underutilization rate, a more comprehensive measure of unused labor capacity, increased to 9.3% from the first quarter's 9%. On another note, the labor force participation rate reached 72.4%, the highest level recorded since 1986, following the March quarter's 72%. Additionally, the employment rate stood at 69.8%, showing an increase from the upwardly revised 69.6% reported in the previous quarter.

TL;DR

Post Table 6.png

The forthcoming publication of the Unemployment Rate is scheduled for Tuesday, October 31, 2023, at 9:45 PM GMT+1.

The forecast for New Zealand's unemployment rate currently stands at 3.8%, reflecting a minor uptick.

Last time, the Unemployment Rate was announced on the 2nd of August, 2023. You may find the market reaction graph (NZDUSD M1) below:

6- NZDUSD EMPLOYMENT CHANGE UNEMPLOYMENT RATE.jpg
 

Daniel LQDFX

Trader
Jul 21, 2023
86
0
12
42

01 November 2023​

Wednesday​

On Wednesday, November 1st, 2023, a series of significant high-impact news announcements is scheduled in the United States. These include the release of ADP Non-Farm Employment Change, ISM Manufacturing PMI, JOLTS Job Openings, JOLTS Job Openings, Federal Funds Rate, FOMC Statement, and FOMC Press Conference.​


USD – ADP Non-Farm Employment Change​

The generation of employment serves as a vital leading indicator for consumer spending, playing a pivotal role in driving overall economic activity.

In September, the ADP National Employment Report revealed that the private sector in the United States had added 89,000 jobs, while annual pay had witnessed a substantial year-over-year increase of 5.9%. This comprehensive report, developed in collaboration with the Stanford Digital Economy Lab by the ADP Research Institute, provided a deep dive into the state of the private-sector labor market. Drawing from anonymized payroll data from over 25 million American employees, it offered an up-to-date, high-frequency perspective on employment trends in the U.S. This report included data on total private employment changes for the current month and weekly job data from the prior month, making it a valuable resource for analyzing labor market dynamics. Unique to ADP, its pay measure offered insights into the earnings of nearly 10 million employees over a 12-month period, providing an in-depth view of compensation trends.

TL;DR

Post Table 7.png

The upcoming ADP Non-Farm Employment Change report is scheduled for release on Wednesday, November 1, 2023, at 12:15 PM GMT+1.

The forecast for ADP Non-Farm Employment Change suggests a decline from 89,000 to 65,000.

Last time, the ADP Non-Farm Employment Change was announced on the 4th of October, 2023. You may find the market reaction graph (GBPUSD M1) below:


7- GBPUSD ADP NF Employment Change.jpg
USD – ISM Manufacturing PMI​

The ISM Manufacturing PMI is a crucial economic indicator as it reflects how businesses respond rapidly to market conditions, offering valuable insights from the perspective of purchasing managers. Their assessments provide up-to-the-minute and pertinent information about a company’s outlook on the economy, making this announcement a vital gauge of economic health.

In September 2023, the ISM Manufacturing PMI in the United States increased to 49 from the previous month's 47.6, surpassing market expectations of 47.8. This improvement marked the slowest contraction in the US manufacturing sector in ten months. Despite the ongoing slowdown, the data indicated nearly a year of consecutive monthly contractions in US factory activity, mainly influenced by the Federal Reserve's higher borrowing costs. New orders, while declining for the 13th consecutive month, did so at a notably slower rate due to changing supply chain dynamics, prompting customers to initiate more projects. As a result, production saw a significant rebound from August's stagnation, reaching its highest point since July 2022, aided by the rapid reduction of backlogs. Employment also displayed strength, bouncing back after three periods of contraction. Furthermore, the decline in prices persisted for the fifth consecutive month, raising optimism about improved profit margins for manufacturers.

TL;DR

Post Table 8.png

The upcoming ISM Manufacturing PMI report is scheduled for release on Wednesday, November 1st, 2023, at 2:00 PM GMT+1.

The forecast for the ISM Manufacturing PMI suggests a slight uptick, moving from 49.0 to 49.5.

Last time, the ISM Manufacturing PMI was announced on the 2nd of October, 2023. You may find the market reaction graph (EURUSD M1) below:

8- EURUSD ISM MANUFACTURING USD.jpg

USD – JOLTS Job Openings​

Traders pay close attention to this data despite its delayed release because it can significantly influence the market. Job openings serve as a leading indicator of the overall employment landscape, highlighting the importance of this information for traders.

In August 2023, the number of job openings surged by 690,000 compared to the previous month, reaching 9.61 million. This figure significantly exceeded market expectations of 8.8 million and indicated a robust labor market, despite the Federal Reserve’s unprecedented monetary policy tightening measures. Job openings saw notable increases in professional and business services (+509,000), finance and insurance (+96,000), state and local government education (+76,000), nondurable goods manufacturing (+59,000), and federal government (+31,000). Moreover, job openings increased across all regions, including the Northeast (+51,000), the South (+278,000), the Midwest (+238,000), and the West (+124,000).

TL;DR

Post Table 9.png

The upcoming JOLTS Job Openings report is scheduled for release on Wednesday, November 1, 2023, at 2:00 PM GMT+1. This data release is closely monitored by analysts and traders for its insights into the state of the labor market, making it a significant event on the economic calendar.

The forecast for JOLTS job openings indicates a decline from 9.61 million to 9.2 million.

Last time, the JOLTS Job Openings was announced on the 3rd of October, 2023. You may find the market reaction graph (GBPUSD M1) below:

9- GBPUSD JOLTS USD.jpg

USD - Federal Funds Rate​

Short-term interest rates are the primary driver of currency valuation, with most other indicators serving as predictors of future rate changes for traders.

At the Economic Club of New York, Fed Chair Powell discussed the Fed's cautious approach, stating that policymakers had determined the extent of additional policy tightening and the duration of policy restrictions based on incoming data, evolving outlook, and risk assessment. Powell noted that the tight policy had a dampening effect on economic activity and inflation. While further evidence of sustained above-trend growth or labor market tightness no longer easing could jeopardize progress on inflation, potentially requiring additional tightening of monetary policy. Powell also acknowledged that inflation remained elevated, and achieving the 2% inflation goal might entail a period of below-trend growth and some labor market softening. In the September 2023 meeting, the Fed had maintained the federal funds rate target range at a 22-year high of 5.25%-5.5%

TL;DR

Post Table 10.png

The upcoming Federal Funds Rate decision is scheduled for Wednesday, November 1, 2023, at 6:00 PM GMT+1.

The forecast for the Federal Funds Rate remains unchanged at 5.5%, consistent with the previous figure.

Last time, the Federal Funds Rate was announced on the 21st of September, 2023. You may find the market reaction graph (EURUSD M1) below:

10- EURUSD FED Funds rate USD.jpg

FOMC - Statement​

This is the key instrument through which the FOMC communicates with investors regarding monetary policy. It encompasses the results of their interest rate and policy measure votes, providing insights into the economic factors that shaped their decisions. Crucially, it delves into the economic forecast and provides indications about future policy decisions.

The FOMC meeting is scheduled for Wednesday, November 1, 2023, at 6:00 PM GMT+1.


USD - FOMC Press Conference​

This represents one of the key avenues employed by the Fed to convey monetary policy information to investors. It offers comprehensive insights into the determinants behind recent interest rate and policy choices, accompanied by analysis of economic conditions, including future growth prospects and inflation. Notably, it offers valuable hints about the trajectory of future monetary policy decisions.

The upcoming FOMC Press Conference is scheduled for Wednesday, November 1, 2023, at 6:30 PM GMT+1.
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02 November 2023​

Thursday​

On Thursday, November 2, 2023, the market anticipates significant high-impact announcements. Switzerland will release its Consumer Price Index month-on-month (CPI m/m), the UK is scheduled to make an announcement regarding its Official Bank Rate, and the US will unveil its unemployment claims data. These events are likely to have a notable impact on market dynamics.​


CHF - CPI m/m​

Consumer prices play a significant role in the overall inflation, and inflation holds a crucial position in currency valuation as escalating prices prompt the central bank to increase interest rates in line with their mandate to control inflation.

On October 3, 2023, the Federal Statistical Office (FSO) reported that the consumer price index (CPI) experienced a 0.1% decrease in September 2023 compared to the preceding month, resulting in a reading of 106.3 points (December 2020 = 100). Inflation for the same month, when compared to the previous year, stood at +1.7%. This decline in CPI can be attributed to various factors, including reduced prices in the hotel and supplementary accommodation sectors, as well as decreases in airfare and prices for both domestic and international package holidays. On the other hand, prices for leisure-time courses, fuels, heating oil, clothing, and footwear saw increases during this period.

TL;DR

View attachment 25807

The upcoming CPI m/m is set for publication on Thursday, November 2, 2023, at 07:30 AM GMT+1.

The forecast for the CPI m/m suggests a rise from -0.1% to 0.2%.

Last time, the CPI m/m was announced on the 3rd of October, 2023. You may find the market reaction graph (USDCHF M1) below:

11- USDCHF CPI mm CHF.jpg

GBP - BOE Monetary Policy Report​

This information offers valuable insight into the bank's perspective on economic conditions and inflation, which are pivotal factors influencing future monetary policy decisions and interest rate determinations.


GBP - MPC Official Bank Rate Votes​

The minutes of the BOE's Monetary Policy Committee (MPC) meetings include the individual interest rate votes of each MPC member from the latest meeting. This voting breakdown offers valuable insights into any shifts in members' positions regarding interest rates and provides an indication of how close the committee is to considering a rate change in the future.


GBP - Official Bank Rate​

Short-term interest rates are the primary determinant of currency valuation, with traders predominantly using other indicators to forecast future rate movements.

On September 21st, the Bank of England decided to maintain its policy interest rate at 5.25%, marking its highest level since 2008. This choice marked a departure from the bank's series of 515 basis points (bps) rate hikes over the past two years, reflecting a cautious approach influenced by recent data on inflation and the labor market. The Monetary Policy Committee voted 5-4 in favor of keeping rates unchanged, with four members advocating for a 0.25% increase. Despite ongoing pressure from rising oil prices, the central bank anticipates a decline in Consumer Price Index (CPI) inflation in the near term, attributed to lower energy costs and ongoing decreases in food and core goods prices. Policymakers also reiterated their readiness to implement further tightening measures if deemed necessary.

TL;DR

Post Table 12.png

The upcoming Official Bank Rate announcement is scheduled for Thursday, November 2, 2023, at 12:00 PM GMT+1.

The forecast for the UK Official Bank Rate anticipates that the rate will remain unchanged at its previous level of 5.25%.

Last time, the Official Bank Rate was announced on the 21st of September, 2023. You may find the market reaction graph (GBPUSD M1) below:

12- GBPUSD Official Bank Rate, Unemployment Claims USA.jpg

USD - Unemployment Claims​

Although often seen as a lagging indicator, the number of unemployed individuals carries substantial significance as it reflects the overall economic health. This is due to the strong correlation between labor market conditions and consumer spending. Additionally, unemployment plays a crucial role in the decisions made by those responsible for shaping the country's monetary policy.

In the week ending October 21, the seasonally adjusted initial jobless claims increased by 10,000 to 210,000, with the previous week's figure revised upward by 2,000. The 4-week moving average rose to 207,500, an increase of 1,250, and the previous week's average was revised upward by 500. The insured unemployment rate remained unchanged at 1.2%, with 1,790,000 people receiving insured unemployment benefits, an increase of 63,000 from the previous week's revised level, which was adjusted downward by 7,000. The 4-week moving average for insured unemployment increased by 31,250, with the previous week's average revised downward by 1,750.

TL;DR

Post Table 13.png

The upcoming Unemployment Claims announcement is scheduled for Thursday, November 2, 2023, at 1:00 PM GMT+1.

The forecast for Unemployment Claims indicates a rise from 210,000 to 217,000.

Last time, the Unemployment Claims was announced on the 26th of October, 2023. You may find the market reaction graph (USDJPY M1) below:

16- USDJPY Advance GDP, Unemployment Claims USD.jpg
 

Daniel LQDFX

Trader
Jul 21, 2023
86
0
12
42

03 November 2023​

Friday​

Keep an eye on your calendars for Friday, November 3, 2023, as it's slated to bring a series of high-impact announcements from both Canada and the United States. Canada will reveal its crucial Employment Change data along with the Unemployment Rate, shedding light on the labor market's health. Meanwhile, south of the border, the US is set to disclose significant economic indicators, including Average Hourly Earnings m/m, Non-Farm Employment Change, the Unemployment Rate, and the ISM Services Purchasing Managers' Index (PMI). These releases are poised to draw attention from markets and analysts, potentially influencing investment decisions and market trends. Stay tuned for the latest updates and analysis on these pivotal announcements.​


CAD - Employment Change​

The creation of jobs serves as a vital leading indicator for consumer spending, which constitutes a significant portion of the overall economic activity.

In September 2023, Canada's job market saw a substantial increase of 63.8K jobs, the highest surge in eight months and surpassing expectations of a 20K rise. Job gains were particularly notable in educational services (+66,000) and transportation & warehousing (+19,000). However, certain sectors such as finance, insurance, real estate, rental & leasing (-20,000), construction (-18,000), and information, culture & recreation (-12,000) experienced decreases in employment. Both part-time (+48,000) and full-time (+15,800) positions saw growth. Job expansion extended across six provinces, with Quebec (+39,000) and British Columbia (+26,000) leading the way, while Alberta (-38,000) and New Brunswick (-2,700) witnessed declines. The unemployment rate remained steady at 5.5%, unchanged for the third consecutive month, marking the highest level since January 2022.

TL;DR

Post Table 16.png

The upcoming Employment Change data is scheduled for release on Friday, November 3, 2023, at 12:30 PM GMT+1.

The forecast for Canadian Employment Change is reading a decreased 14,000 thousand.

Last time, the Employment Change was announced on the 6th of October, 2023. You may find the market reaction graph (GBPCAD M1) below:


13- GBPCAD Employment change Unemployment Rate CAD.jpg
CAD - Unemployment Rate​

While typically considered a lagging indicator, the unemployment rate remains a crucial signal of overall economic well-being due to its strong correlation with consumer spending and labor-market conditions.

In August 2023, Canada's unemployment rate remained stable at 5.5%, slightly below the estimated 5.6%. Although there was a slight increase in joblessness, it stayed lower than pre-pandemic levels. The economy added 63.8K jobs, significantly surpassing the expected 20K. Unemployment increased for core-aged men, while it remained stable for core-aged women. Youth unemployment has shown little change since May.

The forthcoming Unemployment Rate data is set for release on Friday, November 3, 2023, at 12:30 PM GMT+1.

The forecast for the Canadian Unemployment Rate is reading an unchanged 5.5%.

Last time, the Unemployment Change was announced on the 6th of October, 2023. You may find the market reaction graph (GBPCAD M1) below:

13- GBPCAD Employment change Unemployment Rate CAD.jpg

USD - Average Hourly Earnings m/m​

This metric holds the distinction of being a precursor to consumer inflation. The pattern becomes evident as businesses increase labor expenses, with the resultant higher costs typically being transferred to consumers.

In September 2023, average hourly earnings for all employees in the US private nonfarm payrolls increased by 7 cents, equivalent to a 0.2% rise, matching the previous month's pace and slightly below market expectations of a 0.3% increase. During the same period, average hourly earnings for private-sector production and nonsupervisory employees saw a 6-cent, or 0.2%, increase, reaching $29.06. Over the past year, average hourly earnings have grown by 4.2%, marking the slowest growth rate since June 2021 and falling below market projections of a 4.3% increase.

TL;DR

Post Table 17.png

The upcoming Average Hourly Earnings m/m data is scheduled for release on Friday, November 3, 2023, at 12:30 PM GMT+1.

The forecast for Average Hourly Earnings m/m suggests a marginal uptick from 0.2% to 0.3%.





USD - Non-Farm Employment Change​

Traders closely monitor Average Hourly Earnings month-on-month (m/m) as it serves as a key indicator of consumer inflation. When businesses raise labor costs, these additional expenses are frequently passed on to consumers, influencing overall inflation.

In September 2023, US nonfarm payrolls surged by 336K, surpassing market expectations of 170K and marking the strongest job gain in eight months. This robust performance, well above the 70K-100K needed for population growth, indicates a resilient labor market despite the Federal Reserve's tightening measures. Job gains were notable in leisure and hospitality, government, health care, professional services, and social assistance sectors. Other major industries saw little change in employment levels.

TL;DR

Post Table 18.png

The forthcoming Non-Farm Employment Change data is scheduled for release on Friday, November 3, 2023, at 12:30 PM GMT+1.

The forecast for Non-Farm Payrolls suggests a decrease from 336,000 to 172,000.

Last time, the Non-Farm Employment Change was announced on the 6th of October, 2023. You may find the market reaction graph (AUDUSD M1) below:

14- AUDUSD Average Hourly Earnings mm, Non-Farm Employment Change & Unemployment Rate US.jpg

USD - Unemployment Rate​

Although it is frequently viewed as a lagging indicator, the unemployment rate retains its significance as a crucial measure of economic well-being. This is primarily due to its strong connection with consumer spending and its impact on decisions regarding monetary policy.

In September 2023, the US unemployment rate remained unchanged at 3.8%, slightly exceeding expectations of 3.7%. Nonetheless, it indicated a historically tight labor market. This stability provides the Federal Reserve with flexibility to sustain higher borrowing costs for an extended duration. Furthermore, the U-6 unemployment rate, encompassing discouraged workers and part-timers, decreased to 7%, while the labor force participation rate held steady at 62.8%, marking the highest level since February 2020.

TL;DR

Post Table 19.png

The Unemployment Rate is scheduled for release on Friday, November 3, 2023, at 12:30 PM GMT+1.

The forecast for the unemployment rate remains consistent at 3.8%, in line with the previous figure.

Last time, the Unemployment Rate was announced on the 6th of October, 2023. You may find the market reaction graph (AUDUSD M1) below:

14- AUDUSD Average Hourly Earnings mm, Non-Farm Employment Change & Unemployment Rate US.jpg

USD - ISM Services PMI​

ISM Services PMI serves as a leading gauge of economic well-being as businesses respond swiftly to market conditions. Purchasing managers, with their up-to-the-minute insights, offer one of the most relevant perspectives on a company's economic outlook

In September, the U.S. services sector maintained its expansion for the ninth consecutive month, registering a Services PMI reading of 53.6%, albeit slightly lower than August's 54.5%. Over the past 40 months, this sector has witnessed growth in 39 of them, with only a single contraction recorded in December 2022. Notable highlights include a rise in the Business Activity Index to 58.8% and the Supplier Deliveries Index entering expansion territory at 50.4%. The Prices Index held steady at 58.9%, and the Inventory Sentiment Index expanded for the fifth consecutive month. Thirteen industries reported growth, with Real Estate, Rental & Leasing leading the pack. Despite a slight moderation in the growth rate, the services sector maintains a positive outlook, albeit with some concerns regarding potential challenges on the horizon.

TL;DR

Post Table 20.png

The upcoming ISM Services PMI is scheduled for release on Friday, November 3, 2023, at 2:00 PM GMT+1.

The forecast for the ISM Services PMI suggests a minor uptick from 53.6 to 53.7.

Last time, the ISM Services PMI was announced on the 4th of October, 2023. You may find the market reaction graph (EURUSD M1) below:



15- EURUSD ISM Services USD.jpg




Disclaimer: The market news provided herein is for informational purposes only and should not be considered as trading advice.
 

Daniel LQDFX

Trader
Jul 21, 2023
86
0
12
42
***Corrections***

01 November 2023​

Wednesday​

USD – JOLTS Job Openings​

Traders pay close attention to this data despite its delayed release because it can significantly influence the market. Job openings serve as a leading indicator of the overall employment landscape, highlighting the importance of this information for traders.

In August 2023, the number of job openings surged by 690,000 compared to the previous month, reaching 9.61 million. This figure significantly exceeded market expectations of 8.8 million and indicated a robust labor market, despite the Federal Reserve’s unprecedented monetary policy tightening measures. Job openings saw notable increases in professional and business services (+509,000), finance and insurance (+96,000), state and local government education (+76,000), nondurable goods manufacturing (+59,000), and federal government (+31,000). Moreover, job openings increased across all regions, including the Northeast (+51,000), the South (+278,000), the Midwest (+238,000), and the West (+124,000).

TL;DR

Post Table 9.png

The upcoming JOLTS Job Openings report is scheduled for release on Wednesday, November 1, 2023, at 2:00 PM GMT+1. This data release is closely monitored by analysts and traders for its insights into the state of the labor market, making it a significant event on the economic calendar.

The forecast for JOLTS job openings indicates a decline from 9.61 million to 9.2 million.

Last time, the JOLTS Job Openings was announced on the 3rd of October, 2023. You may find the market reaction graph (GBPUSD M1) below:

9- GBPUSD JOLTS USD.jpg

USD - Federal Funds Rate​

Short-term interest rates are the primary driver of currency valuation, with most other indicators serving as predictors of future rate changes for traders.

At the Economic Club of New York, Fed Chair Powell discussed the Fed's cautious approach, stating that policymakers had determined the extent of additional policy tightening and the duration of policy restrictions based on incoming data, evolving outlook, and risk assessment. Powell noted that the tight policy had a dampening effect on economic activity and inflation. While further evidence of sustained above-trend growth or labor market tightness no longer easing could jeopardize progress on inflation, potentially requiring additional tightening of monetary policy. Powell also acknowledged that inflation remained elevated, and achieving the 2% inflation goal might entail a period of below-trend growth and some labor market softening. In the September 2023 meeting, the Fed had maintained the federal funds rate target range at a 22-year high of 5.25%-5.5%

TL;DR

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The upcoming Federal Funds Rate decision is scheduled for Wednesday, November 1, 2023, at 6:00 PM GMT+1.

The forecast for the Federal Funds Rate remains unchanged at 5.5%, consistent with the previous figure.

Last time, the Federal Funds Rate was announced on the 21st of September, 2023. You may find the market reaction graph (EURUSD M1) below:

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02 November 2023​

Thursday​

On Thursday, November 2, 2023, the market anticipates significant high-impact announcements. Switzerland will release its Consumer Price Index month-on-month (CPI m/m), the UK is scheduled to make an announcement regarding its Official Bank Rate, and the US will unveil its unemployment claims data. These events are likely to have a notable impact on market dynamics.​


CHF - CPI m/m​

Consumer prices play a significant role in the overall inflation, and inflation holds a crucial position in currency valuation as escalating prices prompt the central bank to increase interest rates in line with their mandate to control inflation.

On October 3, 2023, the Federal Statistical Office (FSO) reported that the consumer price index (CPI) experienced a 0.1% decrease in September 2023 compared to the preceding month, resulting in a reading of 106.3 points (December 2020 = 100). Inflation for the same month, when compared to the previous year, stood at +1.7%. This decline in CPI can be attributed to various factors, including reduced prices in the hotel and supplementary accommodation sectors, as well as decreases in airfare and prices for both domestic and international package holidays. On the other hand, prices for leisure-time courses, fuels, heating oil, clothing, and footwear saw increases during this period.

TL;DR

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The upcoming CPI m/m is set for publication on Thursday, November 2, 2023, at 07:30 AM GMT+1.

The forecast for the CPI m/m suggests a rise from -0.1% to 0.2%.

Last time, the CPI m/m was announced on the 3rd of October, 2023. You may find the market reaction graph (USDCHF M1) below:

11- USDCHF CPI mm CHF.jpg

GBP - Official Bank Rate​

Short-term interest rates are the primary determinant of currency valuation, with traders predominantly using other indicators to forecast future rate movements.

On September 21st, the Bank of England decided to maintain its policy interest rate at 5.25%, marking its highest level since 2008. This choice marked a departure from the bank's series of 515 basis points (bps) rate hikes over the past two years, reflecting a cautious approach influenced by recent data on inflation and the labor market. The Monetary Policy Committee voted 5-4 in favor of keeping rates unchanged, with four members advocating for a 0.25% increase. Despite ongoing pressure from rising oil prices, the central bank anticipates a decline in Consumer Price Index (CPI) inflation in the near term, attributed to lower energy costs and ongoing decreases in food and core goods prices. Policymakers also reiterated their readiness to implement further tightening measures if deemed necessary.

TL;DR

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The upcoming Official Bank Rate announcement is scheduled for Thursday, November 2, 2023, at 12:00 PM GMT+1.

The forecast for the UK Official Bank Rate anticipates that the rate will remain unchanged at its previous level of 5.25%.

Last time, the Official Bank Rate was announced on the 21st of September, 2023. You may find the market reaction graph (GBPUSD M1) below:

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USD - Unemployment Claims​

Although often seen as a lagging indicator, the number of unemployed individuals carries substantial significance as it reflects the overall economic health. This is due to the strong correlation between labor market conditions and consumer spending. Additionally, unemployment plays a crucial role in the decisions made by those responsible for shaping the country's monetary policy.

In the week ending October 21, the seasonally adjusted initial jobless claims increased by 10,000 to 210,000, with the previous week's figure revised upward by 2,000. The 4-week moving average rose to 207,500, an increase of 1,250, and the previous week's average was revised upward by 500. The insured unemployment rate remained unchanged at 1.2%, with 1,790,000 people receiving insured unemployment benefits, an increase of 63,000 from the previous week's revised level, which was adjusted downward by 7,000. The 4-week moving average for insured unemployment increased by 31,250, with the previous week's average revised downward by 1,750.

TL;DR

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The upcoming Unemployment Claims announcement is scheduled for Thursday, November 2, 2023, at 1:00 PM GMT+1.

The forecast for Unemployment Claims indicates a rise from 210,000 to 217,000.

Last time, the Unemployment Claims was announced on the 26th of October, 2023. You may find the market reaction graph (USDJPY M1) below:

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