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Forex Major Currencies Outlook (May 11 – May 15)

Consumption and inflation data from US, Q1 GDP from US and employment data from Australia will plunge global economies further down the black hole of bad data.


March factory orders came in at -10.3% m/m for the lowest reading since the series has been tracked (1957). The final durable goods reading came in at -14.7% m/m and those numbers combined will push down the second GDP reading. Some analysts see it plunging down to -8%. Trade balance came in at -$44.4bn vs -$44.2bn as expected. Exports were down -9.6% while imports were down -6.2%. Trade deficit with China narrowed to -$11.83bn vs -$16bn the previous month. ISM Non-manufacturing came in at 41.8. This is the lowest reading since Great Financial Crisis and with business activity, new orders and employment measures plunging it indicates the pain that will be felt in jobs market and in Q2 GDP. Initial jobless claims came in at 3169k putting the total number of claims in last two months north of 33.5 million while continuing claims climber to 22.65 million. 

NFP for April came in at -20.5 million vs -22 million as expected. Downward revisions were made to the previous month’s reading. The unemployment rate jumped to 14.7% with participation rate dropping down to 60.2%. U6 unemployment rate, measuring workers who are highly skilled but working in low paying or low skill jobs and part-time workers who would prefer to be full-time, rose to staggering 22.8%. The US Labour department stated that the unemployment rate would be 5% higher if that workers were classified correctly which would take the unemployment rate to almost 20%. Average hourly earnings came in at 4.7% m/m and 7.9% m/m beating the estimates due to the fact that low wage employees lost their jobs. The data is arrived at by simple division of total wages paid by the number of hours worked. US Treasury is planning to borrow almost $2 trillion in Q2. It has borrowed almost half of that in previous year. Fed futures contracts implied that from November of 2020 we may get negative interest rates. 

This week we will have inflation, consumption and industrial production data along with hugely growing jobless claims. 

Important news for USD: 


  • CPI


  • Initial Jobless Claims


  • Retail Sales
  • Industrial Production


Final manufacturing PMI came in at 33.4 little changed from the preliminary reading of 33.6. Small uptick was seen in German reading (34.5 vs 34.4 preliminary) while French reading stayed at 31.5 as preliminary reported. Final services came in at 12 with composite at 13.6, a bit better than preliminary but still horrendously low. Spanish composite came in single digits (9.2)! Retail sales in March came in at -11.2% m/m. Expectations are for April to show even bigger decline as the entire continent was under lockdown.

This week we will have industrial production data and second estimate of Q1 GDP.

Important news for EUR:


  • Industrial Production


  • GDP


Final services PMI came in at 13.4, a little improvement from 12.3 as preliminary reported but still abysmally low. It dragged composite up to 13.8. Still lowest readings on the record with activity, new work and employment all showing significant declines.

BOE has left the both the bank rate (0.10%) and asset purchase program (£645bn) unchanged. Seven Members of Policy Committee voted in favour of leaving the asset purchase program unchanged with two members voted for increase it for £100bn. BOE expects GDP to drop by -14% in H2 of 2020 before rebounding the following year. Governor Bailey stated that they still have ample monetary policy tools and that they will continue to come up with appropriate responses. Information about removing lockdown measures will be taken into account for June discussions and BOE may expend their QE programme at the June meeting.

This week we will have preliminary Q1 GDP reading, industrial and manufacturing production as well as trade balance data. We will also have continuation of post-Brexit negotiations starting on Monday.

Important news for GBP:


  • GDP
  • Manufacturing Production
  • Industrial Production
  • Construction Output
  • Trade Balance


RBA has left the cash rate unchanged at 0.25% as it is already at their lower effective bound. The rate will not be increased until goals in employment, the unemployment rate below 5%, and inflation, range between 2-3% for the core reading, are met. Given their previous track record and the severity of the global economic downturn the rate may stay at 0.25% for years. They have scaled back size and frequency of bonds purchases but will widen their criteria for bond purchases to include investment-grade non-bank paper. Their assessment is for GDP to drop -10% in the first half of 2020 and -6% for the entire year before bouncing back in 2021.

Retail sales in March came in at 8.5% m/m. The number was inflated due to stockpiling done before the outbreak. Overall Q1 retail sales rose only 0.7% q/q. Trade balance showed a surplus of AUD10.602bn, almost doubling the expectations and more than doubling previous month’s reading. Exports skyrocketed 15% m/m while imports dropped -4% m/m. This data will make Q1 GDP less negative.

Caixin services PMI came in at 44.4 while composite came in at 47.6. Both numbers are below 50 level for the third consecutive month. New export orders plunged deeper indicating a drop in global demand. Reduction in payrolls for the third straight month and a week start for Q2. Trade balance data for April showed a surplus of CNY318.15bn on the back of strong exports (8.2%) and plunging imports (-10.2%).

This week we will have employment data from Australia and inflation, consumption and industrial production data from China.

Important news for AUD:


  • CPI (China)


  • Employment Change
  • Unemployment Rate


  • Retail Sales (China)
  • Industrial Production (China)


Employment data for Q1 were encouraging with employment change coming in at 0.7% q/q vs 0.2% q/q as expected. Although the unemployment rate came in higher than previous month at 4.2% it was less than 4.4% as expected. Participation rate went up to 70.4%. Overall, the report shows that jobs market was going strong before the outbreak. GDT price index came in at -0.8% for a second consecutive drop.

This week we will have consumption data and RBNZ rate decision. No change is expected in the interest rate; the tone of the statement will be scrutinized for more information about direction of the monetary policy and a potential QE increase.

Important news for NZD:


  • Electronic Card Retail Sales


  • RBNZ Interest Rate Decision
  • RBNZ Monetary Policy Statement


Employment change for April came in at -1993.8k for the worst number ever although beating the more pessimistic estimates of -4000k. The unemployment rate shot to 13% while participation rate fell to 59.8% from 63.5% the previous month. Full-time employment fell -1472k while part-time employment fell -521k. Wages rose to 10.5% m/m due to the lay-offs of low paid workers.

Trade balance in March came in at -CAD1.4bn due to exports falling -4.7% while imports fell -3.5%. BOC governor Poloz’s term at the head of the central bank finishes at the end of the next month and Prime Minister Trudeau announced former deputy governor Tiff Mackem will be his successor.


Labour cash earnings in May came in at 0.1% y/y, a negligible improvement. Household spending dropped -6% y/y. No wages leads to no spending which leads to no inflation. Final services came in at 21.5 dragging composite down to 25.8. Both readings came weaker than the preliminary ones with new orders and output categories plunging down. This reading indicates GDP contraction of almost -12% annually. The only bright spot is that employment category showed resilience which can be supportive of quicker economic recovery. Prime Minister Abe extended state of emergency until May 31.


Sight deposits for the week ending May 1 came in at CHF663.8bn vs CHF650.7bn the previous week indicating that SNB is ramping up its activities in currency markets targeting Swissy’s strength. Inflation in April continued to drop with headline inflation coming in at -1.1% y/y and core inflation dropping -0.5% y/y. Deflationary conditions may spur SNB into action even before their scheduled meeting in June.

You can follow all economic events on the Economic Calendar page on our Website. MT4 server time is set to GMT+3 and if you need assistance converting MT4 server time to your local time you can use some of the online time converters such as WorldTimeBuddy.

Please note that this analysis should not be used as investing advice as it is only an overview of the economic events influencing the markets. Please remember that MT4.VAR. and MT4.ECN. accounts have Market Execution. Please note how Execution works during high impact news and other times of low liquidity.

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