Economic data and non-economic events ensure we have another colourful week for traders.

The situation in North Korea escalated once again over the weekend, when it was reported that rogue state conducted another nuclear test, evidenced by earth tremors around the Korean peninsula. North Korea seems to be pushing the boundaries and testing the patience of other world leaders as they try to assert their military power. US President Donald Trump has used strong language previously when it comes to North Korea, which has some worried that he is ready to go war. On the other hand, some people take comfort in his strongly worded speeches as they see a President who is not backing down and will not be walked over. It’s definitely a delicate balancing act when it comes to potential armed conflict. This situation is likely to bring some volatility to those who trade safe-haven assets such as gold.

The whole North Korean situation has overshadowed the Non-Farm Payrolls data that was released last Friday night. Less jobs were created than forecast (156k vs 180k expected), while the Average Hourly Earnings (wage inflation) figure also disappointed (0.1% growth vs 0.2% expected). The Unemployment Rate also ticked up to 4.4%, higher than the unchanged forecast of 4.3%. These figures have thrown doubt over the Fed Reserve’s possible interest rate increases this year. They were expected to lift rates one more time this year, but if these disappointing figures continue, the central bank may have to hold off any monetary policy tightening over the short term. These results seem to have buoyed markets, with the US indexes finishing slightly up at the end of the trading session. This could be because markets see less chance of an interest rate hike, therefore the cost of borrowing remains cheap.

Looking to the most significant data releases for the week ahead:

Monday – UK Construction PMI, US bank holiday today

Tuesday – RBA (Reserve Bank of Australia) Cash Rate and Rate Statement, UK Services PMI

Wednesday – Australian GDP, US Fed Reserve Members, Neel Kashkari & Robert Kaplan, speak

Thursday – ECB Minimum Bid Rate, US ISM Non-Manufacturing PMI, Australian Retail Sales & Trade Balance

Friday – UK Manufacturing Production, China Trade Balance, US Crude Oil Inventories, RBA Gov Philip Lowe is due to speak