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The ECB Interest Rate Announcement and US Non-Farm Employment Change look set to dominate this week's economic calendar with much volatility expected.

Last week we saw Dollar negative sentiment drag the greenback lower against the majors. This was after the FOMC seemed to distance itself from the need for an urgent rate hike. It seems that the negative pressure on the economy outweighs the need for commodity inflation controlling rate increases. Interest rate futures reacted accordingly with only a 25% chance of a rate hike in August (down from 40%).

Therefore, it stands to reason that this weeks NFP report will be very closely watched. We have been seeing US labor conditions deteriorate recently with a contraction in payrolls, a steadily rising trend in the number of Initial Jobless Claims and a rapid increase to 5.5% Unemployment Rate.  If the US labor market fails to show signs of improvement this week, and few economists are expecting that it will, then further US Dollar weakness is likely. The Non-Farm Employment Change, Unemployment Rate and Average Hourly Earnings data releases have all been moved to Thursday July 3rd because of the US Independence Day holiday on Friday July 4th.

Also due on Thursday is the ECB Interest Rate Announcement. Rates are expected to increase from 4.00% to 4.25% as the ECB looks to counteract increasing inflation. With the CPI Flash Estimate expected to increase to 3.9% YoY (release on Monday June 30th at 11:00 CET) the hike is almost a done deal. As usual traders will be watching the ECB commentary at the press conference held later in the day. It is due to take place at the same time as the US labor releases so extreme volatility is expected.

Elsewhere we have a busy week in store for the CAD, NZD, GBP and AUD.

Trading in the Canadian Dollar will be influenced by oil prices and also Gross Domestic Product (GDP) and the Ivey PMI. The latter may see slightly less volatility than normal as it falls on the US holiday. The week will be cut slightly short in Canada too because of the Canada Day holiday on Tuesday July 1st.

High volatility will be seen in the New Zealand Dollar at the beginning of the week with Building Consents and Business Confidence both due to hit the wire. Trading in the NZDUSD is likely to be dominated by US data arriving later in the week however.

The GBP benefited last week from BOE comments about inflation. This week we will see Nationwide House Prices, Manufacturing PMI, the Halifax House Price Index and Services PMI from the UK. Each of these releases is expected to create high market volatility.

Volatility in the Australian Dollar will benefit this week from the releases of the RBA Interest Rate Statement (expected to remain on hold at 7.25%), Building Approvals, Retail Sales and Trade Balance data.

This week's high volatility events are as follows (all events are London time, UK DST, GMT+1):

Sunday: New Zealand Building Consents (23:45)
Monday: New Zealand Business Confidence (04:00)
Canadian GDP (13:30)
Tuesday: Japanese Tankan Large Manufacturers Index (00:50)
RBA Interest Rate Statement (05:30)
Nationwide House Price Index (07:00)
UK Manufacturing PMI (09:30)
US ISM Manufacturing Prices (15:00)
Wednesday: Australian Building Approvals (02:30)
Australian Retail Sales (02:30)
US ADP Non-Farm Employment Change (13:15)
Thursday: Australian Trade Balance (02:30)
Swiss CPI (06:45)
Halifax House Price Index (NTS)
UK Services PMI (09:30)
ECB Interest Rate Announcement (12:45)
ECB Press Conference (13:30)
US Non-Farm Employment Change (13:30)
US Unemployment Rate (13:30)
US ISM Non-Manufacturing Composite (15:00)
Friday: Ivey PMI (15:00)

The US Dollar ended last week broadly lower against the majors on worse than expected economic data and reduced speculation of a Fed Interest rate hike. In fact the greenback traded lower against the Japanese Yen, Swiss Franc, Euro, GB Pound, Canadian Dollar and the Australian Dollar, as it was unable to hold on to all of the prior week’s strength.

On the data front the USD was not helped by Housing Starts falling to a 17 year low or the fact that the Empire State Business Conditions Index, Building Permits, Philly Fed Index, Industrial Production, Capacity Utilization, Current Account and Initial Jobless Claims all pointed towards economic slowdown.

Interest rate futures are now showing just an 8% chance that the FOMC will increase rates this month. As you would expect the FOMC Interest Rate Statement on Wednesday is the major focus for the week. Particular attention will be paid to the Fed’s views on inflation risk and economic slowdown. Remember that the Fed’s traditional tool for dealing with inflation is a rate hike. However, increased interest rates may put too much pressure on an already weakening economy.

The Federal Reserve Open Market Committee is expected to leave the Federal Funds Rate unchanged at 2.00% this week.

Aside from the interest rate announcement we have high volatility housing data from the US this week. On Wednesday, New Home Sales are expected to contract once more to 515K. This will be followed by Existing Home Sales data on Thursday that is expected to post an increase to 4.96M annualized.

The coming week promises to be fairly quiet from an economic news standpoint with the following high volatility events scheduled:

Monday June 23^rd - German Ifo Business Climate Index
Wednesday June 25^th - ECB President Trichet Speaks, US Core Durable Goods Orders, New Zealand Current Account
Thursday June 26^th - BOE MPC Treasury Committee Hearings, New Zealand GDP & Trade Balance

Visual Analysis & Historical Data

Once again our VA tool will be available for following major news releases. The US housing duo of New Home Sales and Existing Home Sales will both be featured.

The main topic of conversation this week will be if the USD can maintain its recent firm stance against the EUR, CAD, CHF and JPY amongst others.

The main contributing factor to the Dollar’s strength was increased speculation that the Fed will raise interest rates at the August FOMC Meeting. According to interest rate futures there is now a 60% chance of at least a 0.25% hike.

The Dollar closed higher on the week against the world’s majors in the face of better than expected retail sales and consumer inflation numbers. However, the data continues to be mixed with Initial Jobless Claims and the University of Michigan Consumer Sentiment both coming in worse than expected.

The US economic schedule for the coming week is a busy one. We begin on Monday with three high volatility events: Empire State Business Conditions Index, TIC Net Long-Term Transactions and Fed Chairman Bernanke’s speech at the Senate Finance Committee Health Reform Summit.

On Tuesday we will see the release of Housing Starts and the Producer Price Index. Both of these events promise to come with a high level of interest attached to them. At the same time we will also see the slightly less important Core PPI, Building Permits and US Current Account data.

Wednesday and Friday promise to be slightly quieter from the point of view of US economic releases. However, high volatility is likely when Fed Governor Kohn testifies before the Senate Subcommittee on Securities, Insurance and Investment. As usual we will also see Initial Jobless Claims. Traders will be keenly watching this data after last week’s 384K, with figures expected to fall slightly to 375K this week.

It is not just the US economic calendar that can set the tone for the trading week. We are due several high volatility events from other sources too.

On Monday we will see the highly anticipated release of the Eurozone Core CPI YoY. This is the benchmark figure that the ECB uses to set interest rates. There is speculation that the ECB will raise rates in the near future in the face of higher inflation. Core CPI is expected to climb to 1.8% and any surprises to the downside could open the door for further EUR shorting.

Further high volatility events this week are as follows:

Tuesday:
RBA Meeting Minutes - 02:30
UK CPI YoY - 09:30
German ZEW Economic Sentiment - 10:00

Wednesday:
BOE MPC Meeting Minutes - 09:30
BOE Governor King Speaks - 19:30

Thursday:
SNB Libor Interest Rate Announcement - 08:30
SNB Monetary Policy Assessment - 09:00
UK Retail Sales - 09:30
Canadian Core CPI - 12:00

Friday:
Canadian Core Retail Sales - 13:30

Visual Analysis

This week the visual analysis tool will be in use for the US PPI, BOE Meeting Minutes and the Canadian Core CPI.

Check out the full economic calendar and economic speeches.

Although this week will be slightly quieter than last, RBA, BOE and FOMC Meeting Minutes promise to take the economic centre stage.

The RBA Meeting Minutes will be the first high volatility event of the week, 02:30 BST on Tuesday 20^th. Australian Interest Rates currently stand at 7.25% with no speculation of any immanent cuts.

Both the BOE Monetary Policy Committee and the Federal Open Market Committee Meeting Minutes will be released this Wednesday, May 21^st. The BOE will come first, at 09:30 London time with the Fed following at 19:00 BST. As you might expect, these events will draw heavy interest from traders and economists with high market volatility expected. The markets are firmly focused on whether either central bank sees the need for further near term interest rate cuts.

Specifically, traders will watch the MPC Member vote split from the last meeting. The decision was taken to keep the rate on hold at 5.00% and the weight of the majority decision will be watched very closely for clues to the pace and direction of future rate moves.

While the FOMC does not reveal any vote casting it does publish a detailed summary of the interest rate meeting. Traders will closely scrutinize this commentary for clues to future rate moves. At present the popular market opinion is that the US will leave rates on hold in the near term.

Prior to the data landing on Wednesday we will see US PPI and Core PPI. They will hit the wire on Tuesday at 13:30 London time, 08:30 EST. The raw Producer Price Index carries more weight than the Core release. Economists are expecting 0.4% MoM for the PPI and 0.2% for the Core reading.

Later in the week we will see more high-volatility events from the US and UK. On Friday we will see the UK GDP Second Estimate which is expected to come in unchanged at 0.4%. This will be followed at 15:00 BST by US Existing Home Sales. Following a modest but unexpected increase to 5.03 million units in the March announcement, economists are expecting a second straight monthly decline to 4.86 million.

Further high volatility events this week are as follows:

BOJ Press Conference following the BOJ Interest Announcement - Tuesday am
Swiss PPI MoM - Tuesday 08:15
German ZEW Economic Sentimant - Tuesday 10:00
German Ifo Business Climate Index - Wednesday 09:00
Canadian Core CPI - Wednesday 12:00
UK Retail Sales - Thursday 09:30
Canadian Core Retail Sales - Thursday 13:30

The trading week is slightly shorter than normal in Canada (Victoria Day, Monday 19^th) and Germany (Corpus Christi, Thursday 22^nd) with lighter volume and volatility expected during these trading sessions. For more info please see our 2008 market holiday calendar.

The Passion-Trading visual analysis and historical data tool will support the following releases this week:

US PPI MoM
BOE MPC Meeting Minutes
Canadian Core CPI MoM
US Existing Home Sales

For details on the scheduled economic speeches you can check out this week’s economic comment calendar.

The GBPUSD currency pair promises to be in focus this week as the UK and US both have busy economic release schedules

On Monday we will see PPI Input and Trade Balance data from the UK at 09:30. Both of these releases are regarded with maximum importance. Economists are expecting PPI Input to come in at 1.8% MoM. The index is important because it assumes that the manufacturing sector will look to pass on increasing costs to the consumer. Elevated Producer Inflation has been caused by an increase in fuel and commodity prices and the impact of a softening Pound. PPI Output is also set to be released at the same time although this is slightly less important to the market.

The UK Trade Balance, released by The Office for National Statistics, is expected to narrow slightly to -7.5 billion pounds from an expected revision of -£7.6 bln in February.

This Tuesday (13^th) will be equally as busy. Just after midnight UK time, the RICS House Price Balance will be released. Economists are expecting 80% of mortgage surveyors polled to report house prices falling in their area from the 78.5% last month.

At 09:30 the highly anticipated UK Consumer Price Index will be released. Traders will be most interested in the CPI YoY because it is the benchmark reading that the BOE uses in its monetary policy considerations. The CPI is expected to increase to 2.6% from a previous reading of 2.5%. Core CPI is also expected to increase from 1.2% to 1.3%

After a quiet Monday, the first high volatility news from the US will be released on Tuesday. The action starts at 13:20 with Fed Chairman Bernanke’s speech at the Atlanta Fed’s Financial Markets Conference. Then, at 13:30 (08:30 EDT) Retail Sales and Core Retail Sales are due. Retail sales are expected to decrease MoM by -0.2%, however the core number is set to rise by 0.2%.

Later in the week we will see the further action from the UK and US with BOE Quarterly Inflation Report (Wednesday @10:30), US Core CPI MoM (Wednesday @ 13:30), Empire State Business (Manufacturing) Conditions Index (Thursday, 13:30), TIC Net Long-Term Transactions (Thursday, 14:00), Fed Chairman Bernanke speaking at the Chicago Fed’s annual convention (Thursday, 14:30), Philadelphia Fed’s Manufacturing Index (Thursday, 15:00) and finally Michigan Consumer Sentiment at 14:55 on Friday.

Outside of the US and UK this week the following high volatility events are scheduled:

NZD – Retail Sales MoM, Wednesday @ 23:45
NZD – PPI Input MoM, Thursday @ 23:45
JPY – Preliminary GDP QoQ, Friday @ 00:50

Economic Speeches and Comments

As usual there are a number of key comment and events to be aware of, especially from the US. The Atlanta Fed’s Financial Markets Conference dominates the first part of the week with no less than 3 Federal Reserve officials speaking on Tuesday. The market will focus on Bernanke’s comments at 13:20 with Warsh and Plosser participating in discussions later in the day.

Bernanke is also due to speak at the Chicago Fed’s Annual Conference on Bank Structure and Competition on Thursday, 14:30. This is also a high profile event as Bernanke’s comments focus on “Risk Management at Banking Organizations”.

Full details can be found at this week’s speech and comment calendar.

Also this week, the visual analysis and historical data tool is available for Core US CPI.

The following new terms have been added to the financial terms dictionary:

Challenger Job Cuts Report

BOE Financial Stability Report

GDP Advance

GDP Advance Price Index

CPI Flash Estimate

Market Looks Forward to Advance GDP and Non-Farm Payrolls Report

This week’s economic calendar promises to be jam-packed with a wealth of information from the US and Japan.

Both the Fed and the BOJ will be releasing their latest Interest Rate changes on Thursday April 30th. First up is the BOJ Interest Rate Announcement with the BOJ expected to keep rates on hold once again at 0.50%. This is in spite of the encouraging Consumer Inflation data released last week which showed that Core CPI YoY grew in line with expectations to 1.2% from the previous reading of 1.0%.

The FOMC, on the other hand, is expected to continue its run of recent rate cuts by reducing the Fed Funds Rate to 2.00%. This represents a cut of 0.25%, less aggressive than in recent months. Some economists are expecting rates to stabilise at this level for at least the near-term.

As you would expect the US Labor Market will be closely scrutinized this week with both ADP Non-Farm Employment Change and Non-Farm Payrolls scheduled for release. Early indications are for another month of job cuts, -60K expected from the ADP report.

This week we will also see the following high volatility economic events from the US: Advance GDP QoQ (13:30, Weds Apr 30^th), Personal Spending (13:30, Thurs May 01), ISM Manufacturing Index (15:00, Thurs May 01), Unemployment Rate (13:30, Fri 02 May).

High profile events from the rest of the world (times BST):
New Zealand Trade Balance - Mon Apr 28 @ 23:45
UK Nationwide House Prices - Tues Apr 29 NTS
New Zealand Building Consents - Tues Apr 29 @ 23:45
Swiss Leading Index - Weds Apr 30 @ 10:30
Canadian GDP - Weds Apr 30 @ 13:30
Australian Building Approvals - Thur May 01 @ 02:30
UK Manufacturing PMI - Thur May 01 @ 09:30
Australian Retail Sales - Fri May 02 @ 02:30

The highlight of this week’s economic speeches calendar will undoubtedly be BOJ Governor Shirakawa’s press conference following the BOJ Interest Rate Announcement. Traders will be keen to see how the new governor sees the Japanese economy in light of recent increased consumer inflation. Furthermore BOC Governor Carney and Deputy Governor Jenkins testimony in front of the Standing Senate Committee on Banking, Trade and Commerce will draw heavy interest.

Consumer Price Inflation In Focus

With no fewer than 7 Consumer Price Index releases, consumer inflation readings are definitely in focus this week. We will see CPI data from New Zealand (Monday), France & the UK (Tuesday), Germany, the Eurozone and the US (Wednesday) and Canada on Friday.

The raw number from New Zealand and the UK are both expected to draw heavy market interest and volatility while the same can be expected for US and Canadian Core CPI figures.

It is not just Consumer Price Inflation drawing all of the interest with Producer Price Inflation (PPI) from the UK (Monday) and the US (Tuesday) also hitting the wire. Both of these data releases are expected to generate high market volatility, especially in the GBPUSD currency pair.

Other key economic events for this week include:

New Zealand Retail Sales MoM – Sunday April 13 at 23:45

US Core Retail Sales MoM – Monday April 14 at 13:30

Canadian Business Outlook Survey – Monday April 14 at 15:30

UK RICS House Price Balance – Tuesday April 15 at 00:01

The Reserve Bank of Australia Interest Rate Meeting Minutes – Tuesday April 15 at 02:30

US Empire State Manufacturing Index – Tuesday April 15 at 13:30

Treasury International Capital Net Long-Term Transactions – Tuesday April 15 at 14:00

UK Average Earnings Index + Bonus – Wednesday April 16 at 09:30

(all times are UK summer time GMT +1)

This week our visual analysis and historical data tools will be covering the US PPI MoM (Tuesday), the US Core CPI MoM (Wednesday) and the Canadian Core CPI MoM on Thursday. High market volatility is expected for all three of these events as our Visual Analysis tool enters its third month of service.

Our Economic Calendar has been updated for the upcoming working week. It is important to mention that our default time setting has changed to GMT+1 to reflect UK DST (daylight saving time)/ British summer time. If you would like to know how this relates to your domestic time you can use the Qlock World Time Clock.

This weeks’ main focus will undoubtedly be on employment data from the US. ADP Non-Farm Employment Change (Wednesday), Initial Jobless Claims (Thursday), Non-Farm Payrolls and Unemployment Rate (Friday) will all be closely watched. The fear is that the US economy is slipping into recession and the employment market is one of the most important driving factors of the economy.

Before the headline Payrolls figure hits the wire on Friday there will be considerable interest paid to US Manufacturing Data. The Institute of Supply Management is due to release its Manufacturing Index on Tuesday and the newer Non-Manufacturing Composite on Thursday. Traders’ focus will remain on weather either of these two indicators can pull their head above the 50 mark. A reading above 50 signifies expansion, while a reading sub 50 indicates industry contraction.

Elsewhere, New Zealand Building Consents (Sunday), Canadian GDP (Monday), Japanese Tankan Large Manufacturers’ Index, RBA Interest Rate Statement, UK Manufacturing PMI (Tuesday) and UK Services PMI (Thursday) round off a busy week all-round.

The Economic Speeches Calendar is equally as busy for the coming week. The focus will fall on Fed Chairman Bernanke’s Testimony to the Joint Economic Committee in Washington DC. It is expected that Bernanke will field some difficult question from the Committee on US Economic Outlook.

Traders will also keep a keen eye on RBA Governor Stevens’ Testimony to the House of Representatives Senate Standing Committee on Economics in Sydney.

If you wish to view this weeks' data at a later date you can visit its archive page.

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