Forex News Trading Strategy for the 1st – 5th of June
In terms of Forex news trading events we have a busy week to begin the month of August that includes a slew of PMI data, two central bank decisions, and the U.S. employment report.
On Monday we will see manufacturing pmi data from both the UK and the US. The UK print is expected to come in at 49.1, while the consensus for the US figure is 53.1. Expect more weight to be placed on the US outcome with the recent negative sentiment surrounding the USD after last week’s disappointing Q2 GDP result.
Tuesday we have the RBNZ inflation expectation for the quarter. The market is already expecting a rate cut from the RBNZ after the introduction of macro-prudential measures, and dovish tone in the recent intra-meeting economic assessment. Also on Tuesday is the RBA meeting where the market is expecting a 25 bps cut from the central bank. There are valid arguments for both a cut or a hold at this meeting, and we expect it to be a rather close call. The recent mixed inflation data, better than expected for the underlying reading, provides the RBA with an option to push back a rate cut to later this year. The RBA has shown reluctance to cut rates unless absolutely needed.
Later on Tuesday we will see the latest PCE data from the US. This is the Fed’s preferred measure of inflation and could potentially impact investor sentiment for the upcoming FOMC meetings.
Wednesday is the UK services pmi that is already expected to come in weak at 47.4. Also on Wednesday is the latest ADP report, which as of late, has been a fairly accurate indication of non-farm payrolls. Keep in mind this has not always been the case as the indicator has a somewhat checkered history. The ADP report will be followed by the ISM non-manufacturing pmi which has been signaling solid strength for the US economy all year. Crude oil inventories caps the session where another build in inventories would likely keep pressure on the oil market, and also the Canadian dollar.
Thursday is the much anticipated BOE meeting where the market is expecting a 25 bps cut from the central bank. We will also get the latest BOE inflation report, monetary policy summary, and hear from the BOE’s Governor Carney.
Friday starts off with the RBA Monetary Policy Statement, and ends with the latest US employment report. We will also see the Canadian labor market data as well. US non-farm payrolls got back on track in June after a very weak May. This report will be heavily watched considering the current USD sentiment after a less than consensus GDP print this past Friday.
Other Forex news trading events taking place this week can be found here: Forex Factory Calendar.