Economic calendar: Central banks, oil and labour data

Summary:
- ADP report to provide a hint ahead of NFP
- Bank of Canada may address latest streak of weak data today
- API signalled huge build in oil inventories, will DOE report confirm?

While in Wednesday’s calendar one will not find any major market moving events, the ones scheduled definitely have a scope to trigger short-term price swings. Bank of Canada and the Central Bank of the Republic of Turkey will announce interest rate decisions today. ADP employment report will provide a nice hint ahead of the official labour market report scheduled for Friday. Last but not least, oil may become more volatile in the afternoon in case DOE report shows similarly extreme reading to as API yesterday.

11:00 am GMT - CBRT interest rate decision. Turmoil on the Turkish lira market is long over and we have not seen any bigger price swings since. However, nothing can be taken for grant given character of the President Erdogan. Just recently there was a threat of renewing US-Turkey tensions, this time over Syria. Meanwhile, euro and the US dollar are trading around 3% and 4.5% higher against the Turkish lira year-to-date. When it comes to today’s decision no change is expected but any remarks on currency’s strength may trigger a price move.

1:15 pm GMT - US, ADP employment report for February. The US official labour market report for February will be released this Friday and as usual investors will be served ADP report earlier. ADP report contains far less data than the one released by the Department of Labour and  market reaction is usually more muted. Nevertheless, this reading may be used as a hint ahead of Friday’s release. Market consensus expects 190k increase in employment.

1:30 pm GMT - US and Canada, Trade data for December. The US trade data gained importance amid trade conflict with China. However, investors will be served one of the delayed reports today and there may be no significant price reaction to this outdated print. Releases of the Canadian trade balance data were also delayed due to the US shutdown as Canadian statisticians did not have full data. Trade deficit of the United States for December 2018 is expected at $57.3 billion (previously $49.3 billion) while Canadian one at C$2.4 billion (previousły C$2.06 billion).

3:00 pm GMT - Bank of Canada interest rate decision. The Canadian dollar took a hit last week on the back of lacklustre GDP report for the final quarter of the previous year. In turn, USDCAD is trading near two-month high. A streak of somewhat disappointing data from the Canadian economy may cause BoC members to consider more dovish message. However, the main interest rate is expected to remain unchanged at 1.75% and money market is not expecting any rate hikes or cuts this year..

3:30 pm GMT - DOE report on oil inventories. The rally on the oil market faded and crude began to trade sideways. The latest Trump tweet on oil pushed commodity prices lower and another hit may be looming just around the corner. The American Petroleum Institute estimates released yesterday suggested that oil inventories may have increase as much as 7.3 million barrels. In case this is confirmed by the official report today price may find itself under significant downward pressure. Market consensus, however, expects just a 0.4 million build.

Central bank speakers scheduled for today:
- 12:15 pm GMT - BoE’s Cunliffe
- 4:00 pm GMT - SARB Governor Kganyago
- 5:00 pm GMT - Fed’s Williams
- 5:00 pm GMT - Fed’s Mester
- 5:30 pm GMT - BoE’s Saunders

After steep declines at the very beginning of 2019, USDCAD began to trade within a range marked by the upward sloping trendline and the resistance zone 1.3330-1.3355. Abrupt rally triggered by weak Canadian GDP reading pushed the pair above the aforementioned resistance zone and the pair may be set to move even higher in case BoC delivers a dovish message today. Source: xStation5

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