Week ahead: NFP, RBA, BoE, Fedspeak - Nomura

FXStreet (Bali) - David Fritz, Global FX Strategist at Nomura, walks us through this week's key events, including Friday's NFP (13:30GMT), Central Bank meetings - BoE (Thursday 12:00GMT); RBA (Tuesday 3:30GMT); Norges Bank (Thursday 9:00GMT), and Fedspeak, with Yellen (Wednesday 15:00GMT) and Fischer (Thursday 0:30GMT) the most relevant.

Key Quotes

"This week, there will be a lot of follow through from this past week’s FOMC meeting. The FOMC statement was considered more hawkish than expected and market pricing of a hike in December rose significantly. Our US economists similarly shifted their expectations higher for a December hike, but maintain that a March liftoff is more likely since the data is unlikely to warrant an earlier December hike."

"The upcoming data and Fedspeak will therefore be very significant. The minutes released on 18 November will be very important, and Chair Yellen’s 2 December speech will be the final definitive word on the matter. But even before then we have speeches and data that could also shift probabilities. Next week specifically, Chair Yellen and Vice Chair Fischer’s speeches are likely to be the key speeches to watch, although there will be a host of other speeches as well."

"This week’s NFP should provide an indication of the health of the US economy in October, and will set the tone of the data going forward (for latest payroll tracker see October Private Payrolls Tracking, 29 October 2015). On balance, we forecast that private payrolls added a net new 140k workers, with a 15k increase in government workers, implying that total nonfarm payrolls will gain 155k jobs in October."

"At the tail end of the week, we expect China to release data on foreign exchange reserves, which we expect to drop by a little over $51bn. This comes on news that China has been intervening in currency markets in an attempt to get its currency included in the SDR basket with the IMF."

"The Norges Bank announces its rate decision on Thursday, and we expect it to remain on hold, given there has been limited new information since the last meeting, the recent budget was more expansionary than expected, oil prices have been in line with
expectations, and limited contagion risk from EM countries. This would likely push NOK higher against EUR and SEK after their respective central banks acted dovishly at their most recent meetings."

"The RBA announces its cash rate target on Tuesday, and we expect it to remain on hold. While we do expect a rate cut from the RBA, we do not currently expect it until February. Changes to fiscal policy seem to be far off on the horizon, and as such the less effectual monetary policy will have to continue to loosen going forward to stimulate the economy."

"The BoE is widely expected to remain on hold on next week’s Super Thursday. However, given the advanced cyclical stage of the economy and the approaching rates liftoff in the US, the BoE should be adjusting and guiding markets to expect earlier rate hikes. As per usual, the inflation report and minutes of the monthly meeting will be released alongside the rates decision."
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