Last week GBPUSD rallied 215 points, thus breaking above a strong option barrier at 1.5721. The rally stopped around 1.5731. The US Dollar weakened against most majors after Bernanke’s speech, implying the Fed Reserve’s intention to initiate another round of QE and to keep the interest rates low until late 2014. Even positive economic stats were of no help.
While the US economy has accelerated its pace of growth, it is still not enough to make the Fed Reserve stop the quantitative easing program. In the meantime, the UK rate of unemployment is still high. It hinders the economic recovery. The Bank of England is expected to expand the QE program (bond purchases) during February’s meeting. The current rate of unemployment and the recent GDP report support the idea.
This week’s major news release is Non-Farm Payrolls.
Jan 31st (GMT):
15:00 USD CB Consumer Confidence
Feb 1st (GMT):
09:30 GBP Manufacturing PMI
13:15 USD ADP Non-Farm Employment Change
15:00 USD ISM Manufacturing PMI
Feb 2nd (GMT):
09:30 GBP Construction PMI
13:30 USD Unemployment Claims
15:00 USD Fed Chairman Bernanke Testifies
Feb 3rd (GMT):
3rd-8th GBP Halifax HPI m/m
09:30 GBP Services PMI
13:30 USD Non-Farm Employment Change
13:30 USD Unemployment Rate
15:00 USD ISM Non-Manufacturing PMI
The UK news block:
The PMI index is the only but rather important indicator released by the UK this week. It helps investors to anticipate the near-term prospects of the country’s economy. A value below 50 indicates a decline, thus affecting the GBP exchange rate
Manufacturing PMI. The index has been growing slowly since Oct 2011, even though it is still below the critical level of 50 points. This month it is expected to increase a little up to 50.3. The forecast is unlikely to come true. N this case the markets will grow volatile.
Construction PMI. It was slightly above 50 throughout 2011, thus suggesting steady growth in the UK construction sector.This time it is expected to hit 53.0.
Halifax HPI m/m. The housing market inflation indicator has been declining over the last 2 months. The forecast for January is +0.1%.
Services PMI. The previous value is 54.0. The index is expected to drop to 53.6 in January.
The US news block:
CB Consumer Confidence. In December the index came out better than expected after increasing from 55.2 up to 64.5. Experts anticipate an increase up to 68.2.
ADP Non-Farm Employment Change. In Dec 2011 there was an increase from 204K up to 325K. This reading was much higher than the one expected by analysts (176K), thus indicating positive changes in the US labor market. January’s forecast is 193K.
ISM Manufacturing PMI. In December it increased up to 53.9. An increase up to 54.6 is expected in January.
Unemployment Claims. Last week it increased form 356k up to 377K. January’s forecast suggests a decline down to 371K.
Fed Chairman Bernanke Testifies. The event is always attended by high volatility.
Non-Farm Employment Change. In Dec 2011 the indicator surprised everyone with a significant increase from 100K up to 200K of new jobs. This reassured investors. This indicator usually generates the highest market volatility. January’s forecast is 156K.
Unemployment Rate. After the 200K job increase, the US rate of unemployment declined down to 8.5%. No changes are expected this week.
ISM Non-Manufacturing PMI. December’s value is 52.6. This time it is expected to grow up to 53.2.
GBPUSD started last week from 1.5540 and created a local low at 1.5517, Then it rallied up to 1.5740, the current local high. The week closed around 1.5731. The next levels of resistance are 1.5824 and 1.5911.
подготовлено факультетом Опционов Академии МФ
