14 Jan 2016
Key events ahead - Westpac
FXStreet (Guatemala) - Martina Song, analyst at Westpac Banking corporation explained the key events ahead.
Key Quotes:
"Australia’s Dec labour force survey will be released at 11:30am Syd/8:30am Sing/HK. The last two months saw employment surge – employment in Nov rose by 71.4k and Oct by 56.1k. The original Nov data suggests that the sample rotation may have played a role in boosting the result. Westpac’s forecast of -17k is in the middle of the range (-45k to +15k). Our forecast would take the annual rate of employment growth to 2.5%y/y; leading indicators suggest it is running at 2% while the ABS currently has it at 3%. While there was also a meaningful lift in participation from 65.0% in Oct to 65.3%, the Nov rate is around the average seen since Mar 2008. We expect a modest pullback to 65.2%. This would limit the rise in the unemployment rate to 5.9%.
The Bank of Korea is widely expected to keep rates at 1.5%. A small majority are forecasting Bank Indonesia to cut by 25bp to 7.25% while the remainder expect a steady hand.
The Bank of England’s policy decision will be released and we will also see the minutes. Bank Rate should remain at 0.5%. Domestic data has been mixed, though inflation has remained persistently low and external headwinds remain. The ECB’s account of the monetary policy meeting is also due. The December ECB easing underwhelmed market expectations making today's account more interesting."
Key Quotes:
"Australia’s Dec labour force survey will be released at 11:30am Syd/8:30am Sing/HK. The last two months saw employment surge – employment in Nov rose by 71.4k and Oct by 56.1k. The original Nov data suggests that the sample rotation may have played a role in boosting the result. Westpac’s forecast of -17k is in the middle of the range (-45k to +15k). Our forecast would take the annual rate of employment growth to 2.5%y/y; leading indicators suggest it is running at 2% while the ABS currently has it at 3%. While there was also a meaningful lift in participation from 65.0% in Oct to 65.3%, the Nov rate is around the average seen since Mar 2008. We expect a modest pullback to 65.2%. This would limit the rise in the unemployment rate to 5.9%.
The Bank of Korea is widely expected to keep rates at 1.5%. A small majority are forecasting Bank Indonesia to cut by 25bp to 7.25% while the remainder expect a steady hand.
The Bank of England’s policy decision will be released and we will also see the minutes. Bank Rate should remain at 0.5%. Domestic data has been mixed, though inflation has remained persistently low and external headwinds remain. The ECB’s account of the monetary policy meeting is also due. The December ECB easing underwhelmed market expectations making today's account more interesting."