Forex News Trading Strategy for the 31st – 4th of November
We have a busy week ahead with four central bank rate decisions on tap. The Reserve Bank of Australia, Bank of Japan, U.S. Federal Reserve, and Bank of England are all expected to keep policy unchanged. However, you can expect volatility as market participants look to the accompanying statements for forward guidance. The week will end with the U.S. employment report, which will likely impact expectations for the Fed’s December meeting.
Monday starts with first estimate CPI and growth data from the Eurozone. Later in the session we will see the latest PCE data, this is the Fed’s preferred measure of underlying inflation where unexpected changes could lead to volatility, as well as altered expectations for the December Fed meeting. Currently the market is pricing in about a 65% – 70% chance of a Fed rate hike at the December 14thmeeting.
Tuesday begins with manufacturing data from China; which can impact the Australian dollar, as well as the overall risk tone for the session. The Chinese data will be followed closely by policy statements from both the Reserve Bank of Australia, and the Bank of Japan. During New York, the October ISM manufacturing PMI for the U.S. is expected to post a second straight plus 50 reading. This session will also be the start of an important data stretch for the New Zealand dollar, with the latest GDT price index. Later, just ahead of the Asian session we will get New Zealand employment report for the third quarter.
Wednesday begins where Tuesday ended, with a focus on the New Zealand economy. And the Reserve Bank of New Zealand’s survey of inflation expectations report. During New York the latest ADP employment change will give us an early look at employment growth ahead of the official U.S. labor report on Friday. To close out the mid-week session, we will get the latest decision and statement from the FOMC. While there is no policy change to expect during this meeting, traders will be looking very closely for any clues in the statement for what to expect in December.
Thursday is a big day for the British pound, and it begins with the Services PMI during the London session. The services sector is by far the largest part of the UK economy, and elicits the strongest reaction from traders. This report will be followed a few hours later by the latest BoE rate decision, official bank rate votes, monetary policy summary, and BoE inflation report. We expect a very volatile day for the pound.
We finish the week with the U.S. employment report on Friday; which is likely to impact current expectation for the upcoming December Fed meeting. The current expectation is for 175,000 jobs addition in October, with wage growth of 0.3%.
You can find other Forex news trading events taking place this week here: Forex Factory Calendar.
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