Monday, December 2, 2013

A busy week for announcements | US, Euro zone and Aussie authorities the most influential players

This being the first week of the month, it gives rise to a series of potentially market moving announcements. Chief among these is expected to be the US Non-Farm Payrolls report on Friday, although the ADP payrolls report (Wednesday) will, perhaps, provide some indications as to what the official government statistics will hold.

This month, any effects of the US government shutdown as a result of the debt-ceiling and associated political problems will have been flushed from the figures. It is known that employment, or the lack of it, in the US is the strongest consideration when it comes to Federal Reserve decisions on the tapering of Quantitative Easing (QE) which is, itself, the main mover of US dollar rates against all currencies.

Other monetary authorities around the globe will be watching US employment statistics just as closely as the people to whom they would be expected to have the largest impact, our American friends.

On Thursday we will have the regular monthly ECB announcement and press conference. Last month Mario Draghi surprised everyone with a decision to reduce the benchmark interest rate by a quarter of one percent. Later, a seemingly unfounded rumour about the overnight interest rate also depressed the Euro. However, in each case it demonstrated its inherent resilience by bouncing back, to the extent that it is now significantly higher than it was after last month’s surprise reduction.

In Australia the Reserve Bank will make what it calls its “cash rate and RBA statement”. There are no expectations for a further cut in interest rates, although the authorities are on record as saying the relative strength of the Aussie dollar is a concern. 

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