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Based out of Auckland, New Zealand, we bring an institutional trading experience to the retail market.

*Please note; The author is working from UTC +13 when determining the timeline of data releases.

What to expect with Non-Farm Payrolls March announcement. 21 Feb – 26 Feb, 2022

Will the Non-Farm Payrolls (NFP) move the market this week? Or, has its importance been shifted to the side in the mind of investors and traders, especially as huge new global events draw the world's attention? Of course, I am speaking of the Russian invasion of Ukraine that began at the end of last week and has caused an extreme amount of volatility in the forex, commodity, and stock markets. With no diplomatic resolution in sight, the Russian/Ukrainian war is expected to continue to have an outsized impact on these markets.

Nevertheless, the US Federal Reserve will be watching the NFP figures with interest as they always do and folding the results into its justification to hike interest rates moving forward. As such, investors and traders should be keeping a cursory eye on the values, alongside developments in Ukraine. 

The Federal Reserve is almost guaranteed to hike interest rates in its March meeting, its first in the post-pandemic inflationary environment. What isn't guaranteed is how much the Fed will hike. On the table are 25 basis points and 50 basis points. The NFP may impact the Fed's choice between these two options.

Thursday, March 03:

ADP Employment Change FEB

Leading up to the big NFP data release, we will have the precursor ADP Employment Change report for February to digest.

Last month’s data surprised the market when it reported a cut of 300K jobs in the private sector (vs an expected gain of 200K jobs). This month’s report may rebound with an expected 350K jobs added to the private sector

Saturday, March 05:

Non-Farm Payrolls FEB

Contrary to the ADP Employment Change report, the NFP reported a gain of 470K jobs in January.

The NFP For February is expected to report a 450K job gain. Combining an extraordinary Non-Farm Payrolls beat with other data points regarding the US economy recently might be the impetus the Federal Reserve needs to consider a 50-basis point hike seriously. Alarmingly, US producer prices rose 1% over January, the largest rise over the past twelve months, and lifted US PPI to 9.7% YoY

After tanking many equities at the end of last week, the new coronavirus variant out of South Africa will likely be of primary interest to investors leading to the end of 2021. Nonetheless, the show must go on, and several vital data reports from the world’s major players are released this week.

*Please note; The author is working from UTC +13 when determining the timeline of data releases.

What Will Traders Be Watching This Week?

29 Nov – 04 Dec, 2021

Monday, November 29:

Quiet Monday.

Tuesday, November 30:

Freshly re-elected Federal Reserve Chair Jerome Powell is scheduled to speak (pre-recorded) on Tuesday morning. However, Powell won’t touch on US inflation, interest rates, and bond-buying issues. Investors might glean more critical information from the speeches of Fed representatives Richard Clarida (Vice-Chair), John Williams, and Michelle Bowman, who all speak Tuesday morning.

The Europeans Union’s Inflation Rate YoY for November is released Tuesday night. A rise from 4.1% the previous month to 4.5% is expected. Even so, It would be a shock for the European Central Bank to pull away from its ultra-accommodative stance in reaction.

Wednesday, December 01:

We are graced with another Fed Chair speech on Wednesday. This speech should be more closely watched than Tuesday’s.

Powell will testify before the US senate in a speech tilted Coronavirus and CARES Act. It will be interesting to see if Powell’s tone on the transitory nature of inflation has changed to match that of US Treasury Secretary Janet Yellen.

Thursday, December 02:

Closing the week will be employment data from the US. First up is the US ADP Employment Change for November. ADP employment is forecast to rise by more than 500K, marking a third straight month of such rises if actualised.

Friday, December 03:

Quiet Friday.

Saturday, December 04:

The November Unemployment Rate and Non-Farm Payroll (NFP) are released early Saturday morning. A value in the Mid-500K is expected for NFP, while Unemployment is expected to fall one percentage point to 4.5%.

With employment being a more significant factor for the Fed under Powell’s tenure than previous Chairs, a solid report should help strengthen investors current understanding of the Feds position and timeline on rate hikes and tapering.

NFP

The Nonfarm Payroll (aka, NFP report) is making a habit of missing its forecast by wide margins. September's NFP rolled on Friday, revealing that a meagre 194K jobs had been added to the US economy last month (TE, 2021). Perhaps the NFP report wouldn't have been as disappointing had forecasts not predicted September added 500K jobs for the month.

Job growth held to expectations within the leisure, hospitality, and retail sectors, adding a combined 130K jobs to the economy (TE, 2021). However, a steep decline in education and healthcare professionals across the US severely undermined NFP predictions, down by 161K and 18K, respectively (TE, 2021).
 

Why the NFP matters to the Federal Reserve

According to Federal Reserve Chair Jerome Powell, a "decent" September NFP would be needed for the Fed's planned bond-buying slowdown (tapering) to remain on track for November (Reuters, 2021). Without Powell's definition of "decent" or a stated value that meets that definition, the market might have to scramble to figure out what the September NFP will mean for the Fed's tapering roadmap.

As it stands, the DXY is struggling to maintain momentum above the 94.00 level. A reversal or delay in the Fed tapering may expose further weakness in the USD.

USD / NFP Video breakdown

 

After the NFP; Economic Calendar Concerning the USD

The markets will have a couple of days to decipher what the Fed might do in response to the lacklustre NFP. Helping the deciphering process will be the release of the FOMC minutes on Wednesday, followed by several speeches from Fed representatives. Perhaps the most important of these will be from Lael Brainard on Wednesday and John Williams on Friday.

Three additional economic reports will help determine the trajectory the USD takes this week.

On Wednesday, expect data concerning the rate of inflation in the US (YoY) (SEP). Inflation in the US is forecast to remain stable at 5.3% (TE, 2021).

Used vehicles, one of the main culprits for the high inflation in 2021, has begun to subside in price. Supply constraints across multiple industries may be picking up this slack and slowing the pace at which inflation drops.

Alternatively, supply constraints could pick up more than just the slack left by falling used vehicles, and with it, push inflation back in line or beyond the pandemic record of 5.4%.

NFP

San Francisco Federal Reserve President Mary Daly commented over the weekend pushing back against the idea that inflation is here to stay, throwing inflation's new instigator, 'supply constraints', under the bus. Daly noted, "We have these really anxious-to-get-out-there-and-spend consumers hitting the wall of supply constraints, and of course the prices are going to rise…But I don't see this as a long-term phenomenon." (Reuters, 2021).

On Friday, expect back-to-back reports. First, US Retail Sales MoM SEP is forecast to remain flat, followed quickly by the Michigan Consumer Sentiment OCT, which is expected to rise by one point or two from 72.8 in September (TE, 2021).

​#interestingfact: The S&P 500 has not had a 5%+ drawdown from a peak for the past ten months.

This timeframe equates to over 200 sessions. As this hot run continues, more and more analysts come out of the woodwork, predicting that it will shortly come to an end. Perhaps these analysts are correct, and the S&P 500 will hit a wall at 4,500, a value the index crossed for the first-time last Friday. Coincidently, it was also the time the S&P 500 hit its 8th 100-point day for 2021.

As it currently stands, the S&P 500 is at 4,528.79, up another 19 points on Monday trading.

Of course, this consistent rise of the SPX is out of the norm and, therefore, concerns investors. While we cannot control the unforeseeable, we can follow the market announcements coming out of the US (or other appropriate regions) that might keep us abreast of possible changes in market sentiment and direction.

Economic reports

It is an atypically quiet week on the US reports front. It is not until Wednesday that the big boy reports are released.

ADP Employment Change

united-states-adp-employment-change S&P 500

The precursor to the Non-farm Payroll, the ADP Employment Change report, is forecasting 500K jobs added to the US private sector economy in August. Bear in mind that this report's estimates were off by more than 70% (330K vs 695K expected) last month.

If the ADP Employment Change number comes in at 500K, it will signal a big turnaround for the private sector job placement, which has steadily declined since a record 882K jobs in May. This decline could be forgivable if the 20 million jobs lost in April 2020 had since been regained. However, as it stands, the US economy is still down a net 4 million jobs.

EURUSD NFP S&P 500

NFP creeps in on Friday

The consensus is that 750K jobs have been added to the US economy in August, more than 100K less than expected last month. But, as we all know, NFP beat the expectations of July by a significant number and injected a great deal of optimism in the USD (see EURUSD chart).

How did this big NFP beat translate on the S&P 500?

S&P 500 NFP

Click to enlarge

For the past four NFP job reports, we can observe a pattern.

When the NFP disappoints, the S&P 500 has a rough few days. This rough patch is clearly illustrated in May, where the NFP reported a paltry 266K jobs vs an expected 978K. What ensued on the following Monday was three days of selling, resulting in the S&P 500 falling from 4,233 to 4,058. The SPX didn't gain back those losses until the day before the next NFP was released.

When the NFP beats, the S&P 500 falls, but by far less than when it misses. This begs the question: What will it take for the S&P 500 to react positively? I think it is waiting for an NFP to report more than a million jobs, like last reported in August 2020 (July Job numbers). Otherwise, the Russel 2000 Index will be the biggest beneficiary of the positive, but not grand, NFP reports.

This week ahead: CPI, NFP & RBA Interest Rate Decision

As Europe enters into the late stages of their respective lockdowns, it looks like the Coronavirus story may be starting to reach its end. Worldwide cases have started to plateau, with only a couple of countries where the Coronavirus cases continue to rise. For example, the United States broke the grim record of 200,000 cases per day, and Brazil's cases continue to increase. This week ahead contains a plethora of data releases from various countries, so stay tuned.

Eyes on Governor Lowe of the RBA on the banks' Interest Rate decision this week ahead

Monday, 30th November – China Non-Manufacturing PMI

After essentially stamping out the virus, China continues to excel in its recovery. For the right part of 6 months, China's Coronavirus cases have stayed relatively flat, showing their strict Coronavirus strategy's effectiveness. While their politics has remained relatively tame, geopolitical pressures with other countries have started to simmer, most notably with Australia. China recently slapped Australia with a 200% tax on Australian wine as Australia ramps its probe on where the Coronavirus originated in China. This is on top of tariffs on beef, coal, barley, seafood, sugar, and timber. China's PMI's are expected to drop to 52.1 from 56.2 the month before.

Monday, 30th November – Germany CPI

Merkel's summary of Germany's near future portrays how the Coronavirus has played out in Germany in the past couple of weeks. She stated, "We're in for a tough winter, but it will come to an end.,.. My wish for us all is that we act responsibly and stand up for each other." Coronavirus cases in Germany, like many in countries in Europe, have skyrocketed. A premature de-restriction in lockdown measures, alongside summer travel, have pushed Coronavirus cases further higher. That said, analysts predict no change in CPI growth, with a predicted figure of -0.5%.

Monday 30th November, Tuesday 1st December and Thursday 3rd December - ECB Lagarde Speech, Europe CPI and Retail Sales

With the ECB offering over 1.8 Trillion euros of Stimulus alongside 0% interest rates to help support the European Union, the central bank is looking for additional ways to push the bloc out of the recession. The ECB President, Christine Lagarde, continues to stress that the bank's role is to ensure that "the financing conditions are stable, and are conducive to economic recovery is it comes." With two consecutive speeches, traders and investors should watch out for wild whipsaws in the Euro this week. Furthermore, the European Union is set to release the CPI figures this week, with analysts predict the CPI to fall at a slower rate at 0.2%, as suppose to 0.3% the month before

Tuesday 1st, Wednesday 2nd, and Friday 4th December – RBA Interest rate Decision, Governor Lowe Speech, and Retail Sales

The Reserve Bank of Australia has pumped over 100 Billion Australian Dollars into the Australian economy. So far, it seems like it's been working, signaled by dampened currency appreciation and lower bond yields. Analysts predict that the Australian dollar will outperform the New Zealand dollar, with Martin Whetton, head of fixed income and currency strategy, and Commonwealth Bank of Australia stating that "New Zealand exports are more exposed to the U.K., the eurozone and the U.S. than Australia,." With the recent success Australia has been having to the Coronavirus, alongside positive responses from the quantitative easing the RBA has been implementing, analysts predict the RBA will keep rates as is at 0.1%. Retail sales are also going to be released this week ahead.

Tuesday 1st, Wednesday 2nd, and Friday 4th December – U.S. ISMs, Fed Powell speak, and NFP

As the President's transition from Donald Trump to Joe Biden gets underway, this week ahead will be a busy week regarding the data coming out from the United States. With Coronavirus cases continuing to rise with no end in sight, analysts predict a drop in the U.S. ISMs from 59.3 to 57.5. NFP figures are also coming out this week ahead, with analysts predicting a decline from 638k last month to 520k this month. Furthermore, expect Chairman of the Fed, Jerome Powell, to reiterate his support for the United States economy.

A lot of data coming out this week. Stay safe, Trade safe.

Week ahead – United States Election!

With over 93 Million US Citizens voting early, surpassing two-thirds of all 2016 and consisting of 43% of registered voters, the United States election is finally two days away this week ahead. Many regard this as one of the most important Presidential Elections in history, possibly changing society's fabric in the United States for the foreseeable future.

Although the Presidential Election will probably get most of the attention, this week continues to be eventful with a lot of data being released. Here is your week ahead.

Dates are in NZDT.

FiveThirtyEight predicts in 20 out of 22 scenarios Biden will win the Presidency

Monday, 2nd November – US ISM Manufacturing

A key point in Trump's campaign in 2016 was his promise to bring jobs back to America. However, an amended NAFTA agreement, alongside many more amendments to foreign policy, has lost many manufacturing jobs. For example, over one in four Michigan manufacturing jobs have been lost since the NAFTA agreement amendment.

The Coronavirus has just brought more pain to the sector, with an estimated 381,000 manufacturing workers in Michigan, Ohio, Wisconsin and Pennsylvania were laid off or furloughed – with all, but one (Pennsylvania) states being in the midwestern part of the USA. These states were one of the key reasons why Donald Trump was elected in 2016.

As states slowly open up, the Coronavirus continues to run rampant, affecting workers employed in the manufacturing sector. Unlike the tech and finance sector, manufacturers can not work from home. With that said, the US's ISM is predicting to increase slightly from last month to 55.6 this week ahead, as suppose to 55.4 last month.

Tuesday, 3rd November and Wednesday, 4th November – RBA Interest Rate decision and Australian Retail Sales

Australia reached a positive milestone yesterday – zero community transmission. The country has a long road to recovery ahead of them, and the Reserve Bank of Australia acknowledges that. With dovish tones in the previous RBA minutes, analysts predict a 150 point basis cut, from 0.25% to 0.1% tomorrow. However, Insight Manager at Finder, Graham Cooke believes that further cuts will not make dramatic changes to the finances of ordinary Australians, stating that "a further 10-15 point basis cut us unlikely to have much of an impact on the economy –however, our experts seem to think that the RBA is in "every little bit helps" mode."

Furthermore, Retail Sales will also be released a day after the decision. Analysts predict a further 1.5% decline in Retail Sales as the Coronavirus continues to take a longer-term toll on employment.

Wednesday, 4th November – US Presidential Election.

The event everyone and I mean everyone, including your mother, will be watching.

There is nothing much to say about this other than to buckle in. Many polls state that Biden is likely to win. FiveThirtyEight predicts that in 20 out of 22 scenarios, Biden is stated to win. Other polls from firms such as RealClearPolitics see Biden leading over 9%.

Judging by the polls, the only way Trump can win is if he wins all of the swing states. The popular vote in NYC and California have Biden to win anyways, which means the popular vote will be absorbed within the Electoral college (tl:dr, the RealClearPolitics poll may be closer than is stated).

However, the polls showed Hillary winning in 2016. And we all know what happened then.

Friday, 5th November – Bank of England Interest Rate Decision

The UK struggling with lackluster leadership

The UK has finally imposed a stricter lockdown (however, not a full lockdown) on citizens for one month, with analysts predicting that the lockdown may be extended further to allow the UK to have their Christmas not under lockdown. The Bank of England is set to inject over 100 Million pounds buying back bonds to fight the second wave.

However, this may not be enough, with analysts at HSBC predicting that the BoE's bond-buying regimes are "running out of room," which may leave the central bank with no choice but to implement negative rates. Governor of the Bank of England, Andre Bailey, has not ruled negatives rates but has described evidence of their effectiveness as "pretty mixed" and that negative rates might be most effective when an economy is in a recovery phase for the economy to take full advantage of the negative rates. Analysts predict rates to stay at 0.1%.

Saturday, 5th November – US Non-Farm Payroll

A key indicator showing how well the US economy is recovering, Non-farm payrolls is predicted to print 700,000 new jobs, up from 661,000 the month before.

This week ahead is going to be a turbulent one. Strap yourself in, and brace for the ride.

Stay safe, Trade safe. Have a good week!

Week ahead - Trump, Uncertainty and Volatility

It is officially five weeks out until the United States Election. Expect an increase in volatility in the markets as we get closer to the official election dates. It is interesting to note that New Zealand's elections will be held two weeks after the US elections – throwing an extra spanner in the works. Here is your week ahead.

Trump and Biden are set to clash it out

Dates are in NZDT.

Wednesday, 30th September – First U.S Presidential Debate

Usually hosted in front of a crowd, the Coronavirus has put this tradition on top of its head like many other in-person events. There will only be one moderator, with Joe Biden and President Donald Trump going at it for one hour. A crowd? Possibly, Possibly not. If so, it would be strictly limited. The first moderator will be Chris Wallace, the anchor of "Fox News Sunday." It is predicted that the topics will revolve around the financial record for both Trump and Biden, the Supreme Court, the Pandemic, the economy, race and violence in cities, and the election's integrity. Both candidates will have 15 minutes to answer each question. Traders and Investors should be careful trading around this time, as markets are bound to shift either direction depending on the topic in question.

Wednesday, 30th September – China's Non-Manufacturing PMI

After flattening the curve, China has set an example of how a large population deals with the Coronavirus. (I'm assuming they're not lying about their results.) This has enabled the country of almost 1.4 Billion to start restarting their economy a lot earlier than their peers. For comparison, India continues to rack up daily Coronavirus cases with a population similar to China. They currently sit at around 6m Coronavirus cases, in contrast to China's stated 85k cases. China's Non-Manufacturing PMI is set to soften, from 55.2 last month to 52.1. Look for movements in the offshore USD-CNY pair in the week ahead.

Wednesday 30th September – UK's GDP Quarter over Quarter

UK's Coronavirus cases

If there is an example of a "second wave" of the Coronavirus, The United Kingdom exemplifies it. With Prime Minister Boris Johnson forcing drastic measures to stop the Coronavirus, including forcing pubs to close at 10 pm, urging workers to work from home, and many limits regarding groups. GDP is expected to drop -20.4%, similarly in the last quarter. Boris insists that there will not be a second lockdown.

Wednesday 30th September - Europe CPI

Europe has had a relatively valiant effort with regards to the Coronavirus. Although many countries have seen spikes in cases in the past couple of weeks, government and central bank stimulus have supported the European economy as much as possible. With fears of a strengthening in the Euro slowing the recovery, it is to be seen whether the ECB or Government will weaken the Euro. The CPI is set to rise this month from 0.4% last month, to 0.7% this month.

Wednesday, 30th September and Friday 2nd October – United States GDP Q2 and Non-farm payroll

US Coronavirus cases

We talked about the United Kingdom having a second wave – it seems like the United States hasn't even finished its first one. Cases continue to pile up, with total cases at 7.1 Million. Furthermore, it looks like the President has fully put the Coronavirus on the side as he focuses on the upcoming debates and elections. Furthermore, with his tax returns being released by the New York Times, more pressure is being placed on the President to answer – diverting even more of his attention away from the mounting deaths in the United States. GDP in the second quarter is set to contract 31.7%. Furthermore, even as citizens in the United States slowly go back to work, Non-farm payrolls are set to fall from last month, with a 1.371 Million Non-Farm Payroll's previous month to an estimated 875k this month.

Friday, 2nd October – Australian Dollar Retail Sales Month over Month

Australia, too, experienced a second wave just like the United Kingdom. However, Australia's second wave was larger than the first, as the State of Victoria saw a massive spike a couple of weeks ago. This forced the state to go into a second lockdown, which brought daily numbers down to more manageable levels. Their swift control of the second wave has the Trans Tasman bubble between it and New Zealand revived, with reports stating that it could be just weeks before Australians and New Zealanders can travel to either country. Total Coronavirus Cases in Australia is 27,040, with 872 deaths. With the Australian Government provided 80% wage subsidies, Retail Sales should not take a massive hit this week ahead as citizens continue to online shop. A surprise uptick in retail sales should see a spike in the Australian Dollar against the greenback.

An exciting week ahead. Stay Safe, Trade Safe.

Nonfarm Payroll, RBA Interest rates - Week ahead

Busy week ahead as September kicks in. As New Zealand and the United States elections slowly approach, the Coronavirus pandemic will most likely be the center focus for many parties and how they handle the post Coronavirus world. Here is your week ahead.

Nonfarm payroll this week ahead.

Tuesday, 1st September – Germany's Inflation and Unemployment rate

Like most of Europe, Germany is experiencing an uptick in cases as a reopening of Europe too early takes its toll. However, this has not stopped protesters storming the German Government building in Berlin alongside Germany's total cases ticked over 243,000. With prices of oil slowly increasing, analysts expect inflation to increase slightly by 0.1%. Furthermore, with Germany's unemployment benefit allowing unemployed citizens to claim up to 67% of their previous wage, analysts predict no change in the unemployment rate at 6.4% in the week ahead.

Tuesday, 1st September and Wednesday 2nd September – Reserve bank of Australia Interest Rate Decision and Australia's Year over Year GDP.

Australia continues to fight a hard battle with the Coronavirus, after their original strategy of having no lockdown has lead to massive spikes in Melbourne, Victoria. Australia recorded 123 new cases of the Coronavirus – all in the state of Victoria. Denita Wawn, Master Builders Australia's Chief Executive, stated that "Our industry is facing a blood bath… Private sector investment is evaporating, and the government must step in to save businesses and jobs," conveying how dire the situation is in Australia. However, the Reverse Bank of Australia is expected to hold interest rates at 0.25%. Any deviation from this consensus is most likely to move the Australian dollar significantly. Furthermore, Melbourne's sustained lockdown has seen forecasts of GDP growth to drop to -5.3%, down 6.7% GDP growth of 1.4% in the previous quarter.

Tuesday 1st September – Italy's Markit PMI.

One of the country's worst-hit with the Coronavirus, Italy, has recorded over 268,000 cases with cases continue to spike, with newly registered cases yesterday just over 1,200. Italy is predicted to be one of the first to get a grant from the Bloc's 750 Billion Euro grant as it suffers from worsening GDP growth pre-Coronavirus. Italy is set to release Manufacturing PMI's to 52, slightly higher from 51.9 last month.

Tuesday 1st September – Euro core inflation rate Year over Year

Europe is currently experiencing a resurgence in Coronavirus cases as an early lifting of lockdowns just before Summer has forced a spike across Europe. However, many countries are against a second lockdown due to the Economic calamity it will bring. Analysts predict a drop in the inflation growth rate to 0.9%, down from 1.2% in July.

Non-farm payroll – Friday, 4th September

The United States continues to post daily double-digit Coronavirus cases as their total case count tops 6 Million. As elections approach in just over a month, President Donald Trump continues to let the economy open to win over voters. Non-farm payrolls are predicted to be just over 1.4 million, down from a previous 1.73 million print.

As usual, we have many critical economic events that traders need to watch out for to avoid being whipsawed by the market in the week ahead.

Trade Cautiously.

Interest rates, Non-farm payroll - Week ahead

Coronavirus cases have passed 18 million across the globe, with deaths predicted to surpass 700k by the end of this week ahead. Markets are slowly pricing in how the Coronavirus is affecting countries' respective markets. The US Dollar is down 10% from its March highs, and the ASX is slowly edging down, booking losses three weeks in a row. This is your week ahead.

U.S Dollar Index

Tuesday, 4th August – Australian Retail Sales MoM and RBA Interest Rate Decision

The overarching story with regards to the Australian economy is the current situation in Victoria. They have seen triple-digit gains in Coronavirus cases, with cases jumping to 671 new infections today from 397 just a day before. The Premiere for the state of Victoria, Daniel Andrews, declared a state of disaster as they officially admit that they have lost full control over the virus. However, Daniel has not pushed for total lockdown yet, continuing with strict curfews and restrictions on how far and how many individuals can leave the house. This double-digit jump in infected cases comes when the states' largest city, Melbourne, has been in a stay at home order for the past three weeks. This puts immense pressure on the Premiere to impose mandatory lockdown, like what took place in New Zealand. Education Minister Dan Tehan stated that the federal government would "absolutely" support Victoria in ramping up its measures. The events occurring in Victoria may sway the Reserve Bank of Australia to cut rates even lower this week ahead. The rate currently sits at 0.25%, after a steep cut of 50 basis points from 0.75% at the peak of the Pandemic.

With retail sales jumping for the month of June by 2.4%, it is still seen whether Australia Citizens have been purchasing fewer goods as the Coronavirus ramps up. However, analysts predict a similar growth of 2.4% for the month of July.

Tuesday 4th August – New Zealand Employment / Unemployment Figures

With New Zealand returning to a relatively normal, the effects of the lockdown slowly emerge, especially on the labor market. The unemployment rate was 4.2% in the first quarter. However, many analysts believe that this number was propped up because the government heavily subsidized wages and introduced substantial assistance. Bank of New Zealand Analysts predicts a jump in the unemployment rate this week ahead to 5.9%, with ANZ economists forecasting 5.7%. However, ANZ states that these figures may understate the real weakness in the labor market, saying that "looking ahead, official data will, unfortunately, give a poor steer on the true state of the labor market for a while, due to volatility and temporary policy supports that are delaying job losses."

Wednesday, 5th August – Euro Retail Sales YoY

With the European Union passing a 750 Billion Euro fund to boost their economy, traders and investors are looking out for the continents' retail sales number to identify whether citizens are spending. Analysts at ING predict "a sharp rise.. to be expected before things start to level off." Retail sales are an excellent bearing as to how fast the economy is recovering. However, analysts predict a sharp drop by 5.1% in retail sales Year over Year, with last year's results being a drop in 0.2%.

Thursday, 6th August – Bank of England Policy report, Monetary policy summary, Interest rate Decision, BoE Governor Bailey speech

With Prime Minister Boris Johnson delaying the nationwide lockdown's de-escalation for two weeks due to Coronavirus continuing to ravage the country, he has finally hinted that de-escalation may come in the following weeks. Currently, the United Kingdom has had over 305k confirmed Coronavirus cases, with 46,200 Coronavirus deaths. There is a chance that the Bank of England brings rates below zero; however, they have been reluctant in the past due to concerns over bank profits. Chief economist at Investec, Philip Shaw, stated that interest rate markets were pricing in a 60% chance of a 25 basis point cut to -.15% by June next year. This is an event that will induce volatility within the major GBP pairs, so traders should be aware of the timing of their trades this week ahead if they wish to trade the pound.

Friday, 7th August – Non-Farm Payrolls

Deborah Brix, the physician overseeing the White House Coronavirus response, told CNN that the United States had entered a "new phase" of the Coronavirus pandemic as outbreaks start to increase in rural and urban areas. She states the Pandemic has become "Extraordinarily Widespread." This conveys that the USA is not close to steering clear of the damages the Coronavirus face. Analysts predict a net increase in jobs of 4.8 million for the month of June.

Many important events this week ahead – traders should look out for volatility in the major pairs in the market.

Trade safe!

Anish Lal, an analyst here at Blackbull Markets have some excellent pointers on the GBP/USD pair for the week ahead. You can watch it here.

US Non-Farm Payroll posts 4.8 Million Jobs in June.

United States Non-Farm Payroll posts 4.8 Million jobs in June, beating analysts' expectations of a 3 million gain. The unemployment rate also fell to 11.1% in June, forecasted at 12.5%.

Non-Farm Payroll

However, permanent job losses spike

2.1 million of the 4.8 million new jobs were created in the leisure and hospitality sector. However, permanent job losses jumped to 588,000 to 2.8 Million permanent job losses. This is the second-worst month in 20 years for permanent job losses, losing to January 2009 during the Global Financial Crisis.

This is on the back of the United States, topping 2.74 million total Coronavirus cases. Daily new cases increased to 52,600 from 47,000 yesterday. However, President Donald Trump stated that the employment numbers prove that the economy is "roaring back." Donald Trump predicts a resurgence before the November election, with no reference to the state of the Coronavirus in the United States.

The NASDAQ reached a record high, ending at 10,367, a 0.54% gain for the day. Other major indices edge higher, with the SP500 and the Dow Jones posting 0.12% and 0.41% gains, respectively. Interestingly to note, Gold also ended higher with futures ending at $1,788. This may be attributable to investors and traders understanding that the Coronavirus risks, especially in the United States, are still a big threat to the recovery of the economy. This is alongside major fiscal and monetary policies that have helped provide liquidity and elevating equity prices.

NASDAQ in Blue, SPX in Orange, Dow Jones in Teal

Equity markets post record highs and macro-environment tenses

Equity markets, specifically in the United States, have been resilient during an extreme macro environment. Inequality protests dividing the nation, political tensions rising domestically and internationally with the election approaching amongst China's power grab all amidst a pandemic which caused the greatest jobs lost in United States history. With non-farm payroll posting better than expected results over the past two months, a sense of progression in the road of recovery may cloud investors and trader's judgment. Furthermore, with the FED providing virtually unlimited support, it would be reasonable to assume that participation in this market would be met with accommodative conditions.

However, the Coronavirus is still preventing many states from opening. New York is still now allowing in-person dining –from a state that has flattened the Coronavirus curve through the relatively strict lock down. Texas just imposed a mandatory face mask requirement. Florida records its highest death rate. Permanent jobs lost in the United States are still increasing. Investors and traders need to tread carefully before investing their hard-earned dollars into these propped-up markets.

Trade safe.