Weekly Game Plan - 1.5.2016

Themes for the week and potential opportunities

Japan is closed Tue-Wed-Thurs so watch the Jpy on Monday and Friday. NFP is the big focus at the end of the week, though average hourly earnings likely to be the main interest once again. Unless we get incredibly strong headline (> 250K), above trend earnings and high CPI readings, nothing can justify a June Hike and the USD won't get any mercy.

Chinese data was slightly worse than expected this weekend, although still in expansion territory. So that will have to be discounted as the week opens.

US: The week starts with ISM manuf. (Mon) expected 51.5 from 51.8. March construction data is also due. The trade deficit (Wed) is expected down to USD40.3bn from USD47.1bn and a 1.2% fall in Q1 non-farm productivity with a 4% rise in unit labour costs. ISM non-manuf is expected 55.5 from 54.5, and March factory orders are seen +0.6%. NFP (Fri) is the main event of the week and +210k is expected, with unemployment down to 4.9% from 5.0%. However, the main focus is likely to be on average hourly earnings expected +0.3% m/m. 

Fed speakers are back out in force this week so stay tuned.

AUD: RBA (Tue) is expected to keep rates at 2% while maintaining its modest easing bias. The Statement on Monetary Policy is due on Friday. AUD traders will also be looking out for official and Caixin manufacturing PMIs from China on Tuesday. The Federal Budget for fiscal 2016/17 will also be announced. Retail Sales and trade balance (Thur) also a focus. 

NZD: Unemployment data (Tue) will be the foal point along with the usual GDT  auction.

GBP: PMIs are the focus. Manufacturing on Tuesday, construction on Wednesday, services on Thursday with a general weakening expected. 

JPY: Monday and Friday are the only trading days for Jpy. Watch out for any MoF/BoJ intervention in low liquidity times. Also, on Friday watch out as the Nikkei catches up to other equity markets.

CAD: employment data is released alongside NFP, with a 5k fall expected to lift unemployment to 7.2% from 7.1%. March trade data is on Wednesday, building permits are on Thursday.We also have BoC speakers:  Poloz on Tuesday, Schembri on Friday.

Going into the week, I continue to favour short AudJpy & Usd/Jpy, long EurAud and EurUsd.