By Admiral Markets: US ISM Services PMI, FOMC Minutes, Mexico Inflation Rate, and Canada Jobs Report

OVERVIEW OF THE FX WEEK:

• The first week of April has a relatively light economic calendar, but numerous “high”-rated news from throughout the globe may fuel volatility.

• In addition to lectures by numerous Federal Reserve members, the March US ISM Services PMI and the March FOMC meeting minutes will be issued.

• The release of Canadian job statistics at the end of the week should highlight the necessity for the Bank of Canada to keep raising interest rates.

AUD RBA INTEREST RATE DECISION 04/05 TUESDAY| 04:30 GMT

The Reserve Bank of Australia is in a holding pattern as it awaits the outcome of the federal elections in May. Following that, with the Australian unemployment rate at 4.2 percent already on pace with the RBA's year-end prediction for 2022, the RBA is positioned to hike rates swiftly. Rising commodity prices will exacerbate inflationary pressures between now and June, necessitating swift action once political hurdles are overcome. The Australian Dollar could benefit from the RBA's hawkish tone.

TUESDAY, 04/05 | 14:00 GMT | USD ISM SERVICES (NON-MANUFACTURING) PMI

Because services account for about 80% of the US economy, the US ISM services PMI is being closely monitored as a barometer for US growth. The non-manufacturing index of activity is predicted to accelerate in March, with the headline figure expected to rise to 58.4 from 56.5 in February. This would be good news for US GDP forecasts for 1Q'22, which are presently hanging around +1.5 percent annualized. If the data meets forecasts, it will assist maintain Fed rate increase prospects on the rise, which has been supportive of a stronger US Dollar.

WEDNESDAY, 04/06 | 18:00 GMT | FOMC MINUTES FOR MARCH IN USD

The March FOMC meeting resulted in a new Summary of Economic Projections (SEP), and the debate around those estimates is anticipated to elicit the most attention from market players when the minutes are published on Wednesday. However, apart from the reason for revising projections, the FOMC minutes are unlikely to have a significant market influence. Fed officials have delivered scores of speeches since the March Fed meeting, and more will be delivered this week. As a result, the March FOMC minutes are slightly out of date and may not impact the trajectory of Fed rate rise probability in May.

MXN INFLATION RATE | 04/07 THURSDAY | 11:00 GMT (MAR)

Banxico is in the middle of a rate rise cycle and will very certainly continue to raise rates, even if Mexican President Andres Manuel Lopez Obrador has played spoiler by pre-announcement of the most recent rate decision. According to a Bloomberg News poll, the March Mexican inflation rate (CPI) is predicted to rise to +7.36 percent from +7.28 percent (year on year). With commodity prices rising, Mexican inflation figures may be biased upward for the foreseeable future, supporting the Mexican Peso's improved terms of trade.

CAD EMPLOYMENT CHANGE & UNEMPLOYMENT RATE 04/08 FRIDAY | 12:30 GMT

The Canadian economy has picked up pace in recent months, due in part to the Russo-Ukrainian conflict: market players are seeking alternatives to Russia's commodities, and Canada may help fill the hole. With lockdowns removed and oil prices rising, the Canadian economy is likely to have seen robust employment growth last month and will continue to do so shortly. According to a Bloomberg News poll, the Canadian economy gained +80K jobs in March after adding +336.6K jobs in February, lowering the unemployment rate from 5.5 percent to 5.3 percent. As has been the case over the previous month, the Canadian Dollar should continue strong.