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The last trading session of the first week in 2018 has a very rich economic calendar with major economic events which have the potential to move the forex market and present trading opportunities. There will be released economic data related to the economies of Germany, Eurozone, Australia, Canada and the US with the first release of non-farm payrolls for 2018. The main economic event for the day is most probably the US non-farm payrolls report, which can set a new trend for the US Dollar in this first trading month of the New Year 2018. There is also the inflation rate for the Eurozone, so the EUR/USD currency pair is expected to present increased price action and volatility for today. The same applies for the USD/CAD pair with the simultaneous release of economic data for the economy of Canada and the US.

These are the main economic events to focus on today in the forex market:

European Session

  1. Germany Retail Sales and Construction PMI, France Consumer Confidence and Inflation Rate

Time: 07:00 GMT, 07:45 GMT, 08:30 GMT

High or rising retail sales figures are positive for the German economy and the Euro, signaling strong consumer spending, and future higher economic growth. Also a higher than expected reading for the construction sector PMI will indicate increased economic activity, another positive fundamental factor supporting the Euro. Same applies for higher figures of consumer confidence and the inflation rate for the French economy. The forecasts are for an increase in the German retail sales both on a monthly and yearly basis and an increase for consumer confidence in France, while the inflation rate for France is expected to remain unchanged to the level of 1.2%.

  1. Eurozone Core Inflation Rate, Inflation Rate, Italy Inflation Rate

Time: 10:00 GMT

A higher than expected or rising inflation rate figure will put some pressure to the European Central Bank to raise interest rates, but with a consumer price inflation in the 0 to 2 percent range for the ECB and the forecast of a decline for the inflation rate, the Euro may not appreciate against other currencies, and may witness selling pressure instead. The expectation is for an inflation rate of 1.4% for the Eurozone, on a yearly basis, lower than the previous figure of 1.5%.

American Session

  1. Canada Employment Change, Participation Rate, Unemployment Rate, Balance of Trade, Ivey PMI

Time: 13:30 GMT, 15:00 GMT

Lower unemployment rates are positive for the economy, reflecting a higher labor force being more active, with increased consumer spending and higher economic growth, which are all positive for the Canadian Dollar. A rising balance of trade surplus is also positive for the Canadian Dollar, reflecting currency inflows, higher number of exports versus imports, which may lead to a natural appreciation of a the Canadian dollar.

However the forecasts are for a marginal increase of the unemployment rate to 6.0%, higher than the previous reading of 5.9%, and a narrower balance of trade deficit, while the employment change is expected to increase, but at a much lower growth compared to the previous reading. The Ivey Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in Canada. A reading above 50 indicates expansion, and is positive for the economy, and the forecast is for a figure of 62.2, lower than the previous reading of 63.0, indicating expansion but at a lower growth rate. These figures are considered negative for the Canadian Dollar.

  1. US Average Hourly Earnings, Balance of Trade, ISM Non-Manufacturing Employment and PMI, Nonfarm Payrolls, Factory Orders, Fed Harker Speech, Fed Mester Speech

Time: 13:30 GMT, 15:00 GMT, 15:15 GMT, 17:30 GMT

Non-Manufacturing PMI is a Purchasing Managers’ Index for non-manufacturing sectors of the American economy. When the index is rising, the economy in general and the stock market in particular are on the rise. A set of other important fundamental news such as the unemployment rate, the labor market jobs growth rate, and the factory orders all have the potential to influence the US Dollar. Higher than expected readings for the jobs growth, the factory orders and the non-manufacturing PMI will be positive for the US Dollar. Also a narrower than expected trade of balance deficit will be positive as well, reflecting increased capital inflows.

Pacific Session

  1. Australia Balance of Trade

Time: 00:30 GMT

Higher than expected figures for the balance of trade surplus will be supportive and positive for the Australian Dollar, signaling capital inflows and increased demand for the local currency, being a result of higher number or exports compared to imports. The forecast is for an increase of the balance of trade surplus with a figure of 0.55 Billion Australian Dollars, higher than the previous reading of 0.105 Billion Australian Dollars, which should be supportive for the Australian Dollar.

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