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November 29, 2021

The Week Ahead: NFP, GDP & FOMC

Bart Kurek

Let's look at the news event's we've got lining up this week...

(USD) FOMC Member Speeches

Many Fed policymakers are scheduled to give testimonies throughout the week to hint at any possible upcoming monetary policy changes which could move the USD around. The Fed Chair Powell is set to speak in webinars in front of the Senate Banking Committee and the House Financial Services Committee. Other important members to look out for is Fed's Williams, Bowman and Clarida.

(CAD) GDP

A Gross Domestic Product (GDP) report is a measure of the size and health of a country's economy over a period of time. The figure sums up the country's performance in terms of trade, consumer activity, government spending and investment during a particular period.

Analysts are expecting to see no change in growth following last months 0.4% expansion. Weaker job growth and rising price levels likely kept consumer spending in check, even as businesses slowly resume normal operations.

(AUD) GDP

Australia is scheduled to print its Q3 GDP report midweek and analysts are expecting to see a softer pace of growth compared to the earlier 0.7% expansion. Australia did go into lockdown amongst its major cities in the past quarter, likely limiting business and consumer activity once again. A weaker than expected reading will likely mean more downside for the AUD while a stronger reading could encourage tightening expectations and boost the currency.

OPEC-JMMC Meeting

Every month, the Organisation of Petroleum Exporting Countries (OPEC) and the Joint Ministerial Monitoring Committee (JMMC) have a meeting to discuss the outlook of Oil and its performance. OPEC aims to control the price of oil by adjusting supply volumes. If its members want to increase the price of oil, they can revise their production quotas downwards to limit supply.

The cartel is under pressure to increase its production targets, given how major economies like the US and China are taking it upon themselves to release crude oil reserves into the global market. The OPEC is worried that this might spur a global glut, so they may refrain from boosting supply for now. However, since they did miss their output goal earlier, this could mean they may be inclined to make up for it.

(USD) NFP

The Non-Farm Payroll (NFP) or also known as Non-Farm Employment Change data, released by the Bureau of Labor Statistics, is a key economic indicator for the US economy which represents the number of jobs added to US citizens, excluding farm, government, private household and non-profit organisation employees.

NFP data always causes a commotion in FX as it is an important indicator for the Federal Reserve Bank. When unemployment is high, policymakers tend to have an expansionary (stimulatory, with low-interest rates) monetary policy with the goal to increase economic output and increase employment.

Following October's report of an increase of 531k, analysts are expecting to see another similar November report with an increase of 528k jobs. This is expected to bring the unemployment rate down from 4.6% to 4.5%.

A stronger than expected report will boost the USD currency however, a weaker than expected result could slash hopes of a Fed interest rate hike sometime in the middle of 2022. Leading indicators like the ADP Non-Farm Employment Change and the ISM Manufacturing PMI will likely also bring in extra volatility.

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