The US dollar and the Japanese yen gained some ground in a week which saw weaker than expected data from most regions. As a new month enters, we have key events: the highly anticipated rate decision in the euro-zone, the Fed decision and Non-Farm Payrolls. All these and more are on our weekly outlook. Here are the major market movers awaiting us this week.


Last week US GDP disappointed with a rise of only 2.5% while analysts expected an annual growth of 3.1%. The GDP rise in the first quarter was enabled by a strong rebound in consumer spending. However, in the UK, growth exceeded expectations and allowed sterling to shine. After announcing a QE blitz, the BOJ didn’t provide news, and USD/JPY retreated from 100, and not for the first time. Speculation about a rate cut dominated the euro’s trading. We will get the answers this week. Let’s Start


  1. US Pending Home Sales: Monday, 15:00. The number of contracts to buy previously owned homes fell by 0.4% in February, indicating a slowdown in the strong housing sector. The reading was worse than the 0.3% decline predicted and followed a 3.8% rise in the previous month. Tighter mortgage lending criteria was the main cause for this decline. A rise of 1.2% is expected this time.

  2. Canadian GDP: Tuesday, 13:30. Canada’s economy expanded by 0.2% in January, rebounding from a decline of the same amount in December. The main rises occurred in manufacturing, mining and the oil and gas industry. The reading was higher than the 0.1% increase anticipated by analysts. The recent rise suggests Canada’s economy could be expanding at roughly a 1.5% in the first quarter. The same rise of 0.2% is expected now.

  3. US CB Consumer Confidence: Tuesday, 15:00.  Consumer confidence plunged in March to 59.7 from a downwardly revised 68 in February amid bleaker short term economic outlook. Pessimism was also apparent in the labor outlook, due to missed employment data creating uncertainty regarding the economic outlook. An improvement to 60.3 is forecasted.

  4. US ADP Non-Farm Employment Change: Wednesday, 13:15. Private sector employment in the US increased by 158,000 jobs in March from the 237,000 addition registered in February, much lower than 203,000 expected by economists. The majority of the new jobs were created by service providers. The first quarter of 2013, the ADP National Employment Report has reported an average gain of 191,000 new private sector jobs per month. A smaller gain of 155,000 is expected now.

  5.  US ISM Manufacturing PMI: Wednesday, 15:00 The U.S. manufacturing sector slowed more than expected in March, down to 51.3 from 54.2 in February, still indicating expansion. According to previous ISM reports, the U.S. factory sector was sluggish in the second half of 2012. However manufacturing has shown signs of recovery in 2013, helped by a pickup in demand, including from foreign customers. A further decline to 51.1 is anticipated now.

  6. US FOMC Statement: Wednesday, 19:00. After a period of excellent US figures, recent data badly disappointed. On this background, the Fed is likely to make no changes to policy and hardly any changes in the wording regarding the economy. In addition, the lack of a press conference accompanying this FOMC meeting also implies that the Fed will not rock the boat. A change in policy can be expected only in the second half of the year, if and only if, the recovery genuinely accelerates from the current frustrating speed. The Fed is expected to keep the current policy of bond buys worth $85 billion unchanged and re-iterate the qualitative guidelines for raising the interest rate.

  7. Eurozone: Rate decision: Thursday, 11:45,  press conference at 12:30. Weak German growth, another record in Spanish unemployment and inflation below target all support easier monetary policy. However, a rate cut will not really decrease borrowing costs, which are already very low. The biggest motivation for cutting the rates would be lowering the value of the euro, thus joining the currency wars in which the ECB has lost so far. A lower value for the single currency would certainly help. At the moment, it seems that there is low chance of a rate cut. No cut would strengthen the euro, while a cut would weaken it. If the ECB wants to get serious with weakening the currency, the ultimate weapon is to cut the deposit rate below the current 0%. A negative rate would send the euro free-falling. 

  8. US Trade Balance: Thursday, 13:30. The U.S. trade gap between imports and exports narrowed unexpectedly in February to $43.0 billion, from an unrevised $44.5 billion in January, amid a sharp drop in crude oil imports and a modest increase in exports. The lower-than-expected deficit could raise estimates of first-quarter U.S. economic growth. Another improvement to  $42.1 billion is expected this time.

  9. US Unemployment Claims: Thursday, 13:30. Jobless claims decreased sharply last week, surprising analysts with a 339,000 claims, down 16,000 from the preceding week. The reading suggests less firing due to increase demand and an ongoing recovery in the US economy. A rise of 345,000 is predicted this time.

  10. US Non-Farm Employment Change: Friday, 13:30. NFP disappointed with a 9 month low of 88,000 job addition in March compared to revised reading of 268,000 registered in February. Washington’s austerity measures had a negative impact on the US job market. Jobless rate ticked a tenth of a point lower to 7.6% due to a worrisome decline in the labor participation rate. An addition of 146,000 jobs is forecast now.

  11. US Unemployment Rate: Friday, 13:30. Unemployment rate dropped a tenth of a point lower to 7.6%, seemingly a good thing. However the decline occurred for the wrong reasons since half a million people were excluded from the labor force and an additional 290,000 fewer people were counted as unemployed because they were not actively looking for work. Thus, participation rate declined to the lowest rate since 1979. No change is expected.

  12. US ISM Non-Manufacturing PMI: Friday, 15:00. The US services sector stood on 54.4 in March, 1.6% lower than February reading and below market forecasts. The New Orders Index declined by 3.6% points to 54.6 %, and the Employment Index dropped 3.9% points to 53.3%, indicating expansion in employment for the eighth consecutive month. The majority of respondents’ comments continue to be positive about business conditions; however, there was a growing concern regarding the uncertainty of the future economy.  A decline to 54.1 is expected.

*All times are GMT.