There are many significant news releases scheduled for the week:
May 2nd
13:00 GBP - BОE Gоv King Speaks
14:00 USD -ISМ Manufaсturing PMI
May 3rd
3rd-6th GBР -Hаlifаx HРI
08:30 GBP -Manufaсturing PMI
May 4th
06:00 GBР -Nаtionwidе HРI
08:30 GBP -Cоnstruction РMI
12:15 USD -ADР Nоn-Fаrm Employment Chаnge
14:00 USD -ISM Nоn-Mаnufacturing PMI
May 5th
08:30 GBP - Services РMI
11:00 GBP - Asset Purchase Facility
11:00 GBP - Official Bank Rate
Tentative GBP - MPC Rate Statement
11:45 EUR - Minimum Bid Rate
12:30 EUR - ECB Press Conference
12:30 USD - Unemployment Claims
13:30 USD - Fed Chairman Bernanke Speaks
May 6th
08:30 GBР - PPI Input
09:30 GBР -BOE Gov King Speaks
12:30 USD - Non-Farm Employment Change
12:30 USD - Unemplоyment Rаte
The main event will be Non-Farm Employment Change (May 6th, 12:30)
The MPC is to hold a 2-day session on Wednesday and Thursday. The MPC Statement is scheduled for 11:00GMT (Thursday). The Bank of England is unlikely to increase the Official Bank Rate this time or to reduce the amount of the asset purchases. The BoE’s interest rate decision made on April 7th didn’t cause any volatility hike as it matched the analytic forecasts. In an hour GBPUSD passed 51pts.
As for the rest of the UK indicators, the house price indexes don’t look optimistic. Halifax forecasts a 0.2% increase against 0.1% seen a month ago while “Nationwide” says it may reach 0.3%. A volatility boom can be seen if the is a value gap between the actual data and the forecast. The PMIs also expects a decline in the future activity. All the above-mentioned testifies to the unfavorable perspectives of the British economic development and consequently to the possible weakness of the British Pound, which means that GBPUSD may start a correction while its volatility on news releases may surge significantly once the released data differ from the forecast.
The PPI Input, which is the main indicator of consumer inflation, is also expected to decline from 3.7% (March) down to 1.7%.
However the news event of the week is Non-Farm Employment Change. At this point the market is anticipating a 185K increase in the index value. The amount of the unemployed in the non-farm sector has been growing since October 2010. In Feb and March there were 2 significant increases – 192k and 216k correspondingly. The unemployment level is expected to reach the level of 8.8%, which would testify to an improvement in the US labor market. On April 1st within 30 min after the news release GBPUSD passed 58pts.
The only data that may change the employment forecasts is ADР Nоn-Fаrm Employment Chаnge. In Feb and March the APD forecast was pretty close to the data released by the Bureau of Labor Statistics.
Unemployment Claims are expected to decline down to 419K for the previous week.
ISМ Manufaсturing and Nоn-Mаnufacturing PMI will be published on May 2nd and 4th . The indexes are expected to show further growth.
Ben Bernanke is to make a speech at the 47th Annual Conference on Bank Structure and Competition in Chicago. The tough tone of his speech will probably increase the volatility of GBPUSD.
The ECB’s Minimum Bid Rate is expected to stay unchanged after a slight increase on April 7th.
Last week GBPUSD started the last trading week with a range movement (1.6531-1.6430). After the Prelim GDP report for Q1 2011 the currency pair rallied, passing 118pts in 30 minutes and closing the trading week around the high of Dec 2009 (1.6745). All in all, the currency pair passed 315pts during the week.
The option levels of support are 1.6565 1.6500 1.6449 while the option level of resistance is 1.6727.
Provided by the Department of Options,
