Posted: 30 May 2010 06:10 PM PDT

The week begins with several important events, despite a holiday in the US and Britain. Canada’s GDP and a speech from Trichet are the highlights of the day.

Japan’s Prelim Industrial Production rose by 1.3%, half of early expectations that stood on 2.6%. This weakens the yen – USD/JPY is making an upwards move. There’s more in Japan:

Average Cash Earnings are predicted to rise by 0.9%, similar to last month. Also Japan’s governor of the central bank, Masaaki Shirakawa, is expected to speak during the day.

In Australia, the MI Inflation Gauge rose by 0.5%, higher than last month. HIA New Home Sales continue the flow of Australian releases. They are followed by the Private Sector Credit, an important figure which is expected to rise by 0.5%, exactly like last month.

For more on the Aussie, read the AUD/USD Forecast.

In Australia’s neighbor, New Zealand, the NBNZ Business Confidence will rock the markets.

Moving to Europe, Jean-Claude Trichet will provide a strong start for the Euro as he speaks before a grand audience in an event by the Korean central bank.

The economic data will begin flowing afterwards: European M3 Money Supply is expected to drop by 0.2%, double last month’s drop, weighing on the currency. Private Loans are expected to drop as well.

The more important European event is the CPI Flash Estimate, which is predicted to show a year-over-year of 1.6% in prices, higher than last month, but still not really inflationary.

For more on the Euro, read the EUR/USD forecast and Casey Stubbs' latest analysis.

In Canada, the busy week starts tomorrow with the release of the monthly GDP – Canada’s economy is expected to show a growth rate of 0.5%, higher than last month’s 0.3%. Note that this is the report for March – concluding the first quarter of 2010.

Also in Canada, the RMPI (Raw Materials Price Index), is expected to rise by 1.3%, higher than the 0.8% rise last month. As commodity prices calmed down in May, a change will probably be seen in next month’s report.

For more on USD/CAD, read the Canadian dollar forecast.

After the Americans and the British return from their holidays, the calendar will become busier. Stay tuned!
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Best Non-Farm Payrolls in 13 Years?

Posted: 30 May 2010 09:20 AM PDT

The upcoming Non-Farm Payrolls release on June 4th holds high expectations – a job gain of 500K jobs, the best since 1997, but this includes special government hiring. Here are the things to watch for in this release, and the expected impact on currencies.

It’s important to stress that the Non-Farm Payrolls release is the most volatile event in forex trading, and causes very high volatility. I suggest you read my 5 notes for Non-Farm Payrolls trading. The comment regarding the risk factor is very important these days. OK, let’s see what’s special this time:

The decennial government census already had an impact on previous Non-Farm Payrolls releases. The impact will come to a climax in June 4th’s report. Previous months were dedicated for preparations, and this reported month, May, is when the census was held.

So, a big bulk of the gain in jobs comes from the government. Private sector hiring is only a small part of this month’s report, but it’s of high importance, as it serves as the core value, only slightly affected by the census, and supplying a long-term value.

The markets will pay less importance to the headline number, but rather focus on hiring in the private sector, which is expected to reach 180,000.

Contradicting rise in the unemployment rate

Last month saw a huge leap of 290K jobs, far better than expected. The figure for the previous month was also revised to the upside. But the unemployment rate jumped from 9.7% to 9.9%, very close to the scary 10% figure.

Despite the huge gain expected in jobs in the public sector, and the neat gain in jobs in the private sector, the unemployment rate is expected to drop by only 0.1% to 9.8%. The best explanation for last month’s rise and this month’s expected small dip is that the deep crisis sent many people off charts. As they stopped being part of the workforce, they didn’t contribute to the unemployment rate.

Now that they’re starting to get back, they enlarge the total workforce in a similar scale to the gain in jobs, thus leaving the unemployment rate almost unchanged.

Impact on forex trading

Yet again, this seems to be another win-win situation for the dollar, especially in the Euro/Dollar and the Pound/Dollar. If the results come as expected, it will be another sign of the American economy’s strength. This strength stands out against the great European weakness and against the Pound that follows it.

On the other hand, the Canadian and Australian economies are also doing quite well, and could still rise after this result. AUD/USD has lots of room to rise after the recent falls, driven mostly by risk aversive action. A good NFP will trigger risk appetite behavior and send the Aussie up.

Canada expects a busy week, with a possible rate hike, GDP numbers and employment figures just 90 minutes before the NFP. If Canadian numbers are OK, USD/CAD could fall.

Scenarios for surprises – dollar strength expected.

A disappointing outcome of the Non-Farm Payrolls or a rise of the unemployment rate above 10% could trigger risk aversive trading across the board, hurting also stronger currencies. We’ve seen the dollar rise after weak GDP and weak jobless claims last week. In these chaotic days, bad news, even if they come from the US, trigger dollar buying.

The opposite scenario, of a big drop in the unemployment rate and an even-higher gain in jobs, the dollar will stand out against all the currencies, and will fully justify its safe haven status.

We have lots of other major events before Friday’s NFP. How do you see the Non-Farm Payrolls unfold for forex trading?

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Open Stats

Posted: 30 May 2010 07:00 AM PDT

Forex Crunch stats are now visible to the public via Double Click AdPlanner. In an industry that is still growing up and is still full with secrets, this is my small contribution to enhanced transparency.

There are lots of web comparison tools out there that measure traffic on the web. Alexa and Compete are the most popular ones, but they’re far from accurate. They can give a general idea of trends, but no substantial data.

The most accurate data is held by the site owners. Google Analytics is a free, popular and rather accurate tool for measuring statistics. I also use it here on Forex Crunch. Google Analytics can be connected with Double Click AdPlanner, also a Google product, that enables advertisers to check up data on potential publishers’ sites.

The data that appears for most sites is based on estimations, but after I’ve opted in to connect both tools, everyone can see my internal statistical data. This will help advertisers in seeing the potential, and sends a message of transparency to readers as well.

I’m not the first forex site to do this. There are a few more forex sites that share their data. I hope others will follow.

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