Last week, the greenback struggled to continue its rally because of weak inflation data. The FOMC meeting minutes and dovish comments from some of the Fed officials put pressure on the dollar. In the wake of weak inflation data, will the Fed refrain from hiking the interest rates in December this year? This is the question that will keep troubling the market players from now on. Though the Fed has said it will hike the interest rates one more time this year, the chances seem to be grim.
Meanwhile, the British pound suffered a setback, following talks about a deadlock with respect to Brexit progress. However, the currency saw some upside on the expectation that the existing arrangements would continue for some more time. In Catalonia, the President refrained from making any outright declaration as regards the region’s independence. This helped the EUR amid continued speculation as regards the QE tapering.
Having said this, here is an outlook on the economic news and data releases scheduled for the upcoming week:
#1: Bank of Japan Governor Kuroda Speaks (10/15/2017 Sunday 13:00 GMT)
Haruhiko Kuroda, Governor of the Bank of Japan, is scheduled to participate in a panel discussion in Washington DC and speak as part of the Group of 30 International Banking Seminar. The topic of discussion is “The Global Economy: Prospects for Broad-Based Growth”. As the audience is expected to ask questions, markets are likely to remain volatile during his speech.
#2: Fed Chair Janet Yellen Speaks (10/15/2017 Sunday 13:00 GMT)
Janet Yellen, Fed Chair, is scheduled to participate in a panel discussion in Washington DC and speak as part of the Group of 30 International Banking Seminar. The topic of discussion is “The Global Economy: Prospects for Broad-Based Growth”. As the audience is expected to ask questions, markets are likely to remain volatile during her speech
#3: New Zealand CPI (10/16/2017 Monday 21:45 GMT)
In New Zealand, consumer prices remained flat on a quarter-on-quarter basis in the second quarter of this year. Food prices increased by 0.7 percent because of higher vegetable prices and housing and utility prices rose by 0.8 percent due to an increase in new housing purchases. However, transport prices fell by 1.3 percent because of cheaper domestic airfares.
Consumer prices rose by 1.7 percent on a year-on-year basis in the second quarter, following an increase of 2.2 percent (the highest increase in five years) in the previous quarter. The reading for the quarter also came in below analysts’ expectation for a 1.9 percent increase. The easing of the inflation rate for the first time in as many as six quarters driven by a softer increase in housing, utilities and transport prices and a larger decrease in the cost of communication.
Forecast for the third quarter: 0.4 percent increase on quarter-on-quarter basis
#4: Reserve Bank of Australia Monetary Policy Meeting Minutes (10/17/2017 Tuesday 00:30 GMT)
The Reserve Bank of Australia releases the minutes of the monetary policy meeting 11 times in a year. The document is published two weeks after the announcement of the Cash Rate. On Tuesday, the Australian Central Bank will release the minutes of monetary policy committee meeting held on the third day of this month. It will provide a detailed account of the economic conditions that led to the decision. In the meeting held on October 3, the central bank decided to leave the interest rate unchanged at 1.50 percent.
#5: U.K. CPI (10/17/2017 Tuesday 8:30 GMT)
Though the Bank of England will most likely hike the interest rate in November, it remains to be seen whether it will be a “one-off” hike or the start of the tightening cycle. It all depends on how the inflation shapes up.
In August, the consumer prices in the U.K. increased by 2.9 percent on a year-on-year basis, beating analysts’ expectation of a 2.8 percent increase. Consumer prices had increased by 2.6 percent in the prior month. The CPI was driven higher by increases in the motor fuels and clothing prices. Core inflation rate, which excludes energy, food, tobacco, and alcohol prices, rose by 2.7 percent and came in above analysts’ expectation of 2.5 percent. Consumer prices are expected to increase by 3.0 percent for the next reporting period.
#6: Bank of England Governor Mark Carney Speaks (10/17/2017 Tuesday 10:15 GMT)
Mark Carney, Governor of the Bank of England, is scheduled to testify before the Treasury Select Committee in London. Markets often remain volatile during his speeches. This is because the traders look for clues on the direction of interest rates in the future.
#7: European Central Bank President Mario Draghi Speaks (10/18/2017 Wednesday 8:10 GMT)
Mario Draghi, President of the European Central Bank, is scheduled to deliver the opening remarks in Frankfurt at the central bank’s conference. Markets often remain volatile during his speeches. This is because traders look for clues on the direction of interest rates.
#8: U.K. Average Earnings Index (10/18/2017 Wednesday 8:30 GMT)
In the U.K., the average weekly earnings, which include bonuses, rose by 2.1 percent on a year-on-year basis to GBP 505 per week during the three months to July. The increase was the same as in the prior period. However, the figure came in below analysts’ expectation of 2.3 percent increase. Excluding bonuses, the average earnings increased 2.1 percent to GBP 474 per week but missed analysts’ expectation of 2.2 percent. When adjusted for price inflation, the average weekly earnings declined 0.4 percent, both including and excluding bonuses. Average weekly earnings including bonuses are expected to increase by the same 2.1 percent in the next period as well.
#9: U.S. Building Permits (10/18/2017 Wednesday 12:30 GMT)
In the U.S., the number of building permits issued rose by 3.4 percent on a month-on-month basis to a seasonally adjusted figure of 1,272,000 in August. This was below the preliminary estimate of 1,300,000 numbers. The number of permits issued for multi-family units jumped by 12.9 percent to 472,000. Meanwhile, the permits issued for single-family units dropped by 1.5 percent to 800,000. Forecast for September: 1,250,000
#10: U.S. Crude Oil Stocks Change (10/18/2017 Wednesday 14:30 GMT)
In the U.S., crude oil stocks declined by 2.747 million barrels during the week that ended on October 6 after stocks fell by 6.023 million barrels in the prior period. Analysts had expected crude oil stocks to decline by 1.991 million barrels. Meanwhile, gasoline stocks unexpectedly rose by 2.490 million barrels to record the biggest increase since August first week.
#11: Australia Employment Change/Unemployment Rate (10/19/2017 Thursday 00:30 GMT)
In Australia, employment increased by 54,200 in the month of August of 2017. Meanwhile, the reduction in the number of unemployed people in the country was 1,100. On a seasonally adjusted basis, the unemployment rate came in at the same level of 5.6 percent recorded for the previous month. Forecast for September: addition of 15,200 jobs and 5.6 percent unemployment rate
#12: China GDP (10/19/2017 Thursday 2:00 GMT)
China’s GDP grew at the rate of 6.9 percent on a year-on-year basis in the second quarter of this year, which was the same in the prior quarter. The market had expected China to report 6.8 percent growth during the period. Growth has remained at the strongest level ever since the third quarter of 2015. This could be attributed to the growth in industrial output and increase in retail sales. Investment in fixed assets has also remained strong. Forecast for third quarter: 6.8 percent expansion
#13: China Industrial Production (10/19/2017 Thursday 2:00 GMT)
In China, industrial production increased by 6.0 percent on a year-on-year basis in August after recording a growth of 6.4 percent in the previous month. However, industrial production missed analysts’ expectations of 6.6 percent growth. This was the weakest data since December last year. Output increased less for gas, electricity and water production and declined further for mining. In the meantime, manufacturing output increased further. Forecast for September: 6.4 percent
#14: U.K. Retail Sales (10/19/2017 Thursday 8:30 GMT)
In the U.K., retail sales jumped by 1.0 percent on a month-over-month basis in August after the figure for the previous month were revised upward to an increase of 0.6 percent. The reading for the month came in well above analysts’ expectation of 0.2 percent growth. This is the largest rise in retail sales in as many as four months and was driven by an increase in sales at non-food stores, other stores, and non-store retailing. On a year-on-year basis, retail sales increased by 2.4 percent. Forecast for September: 0.1 percent decline
#15: U.S. Unemployment Claims (10/19/2017 Thursday 12:30 GMT)
The number of people filing for jobless benefits in the U.S. declined by 15,000 to 243,000 during the week that ended October 7 and returned to the levels observed prior to hurricanes Harvey and Irma. Analysts had expected the number of people filing for unemployment benefits to come down to 251,000. Forecast for the next period: 245,000
#16: Canada CPI (10/20/2017 Friday 12:30 GMT)
On a seasonally adjusted month-on-month basis, Canada’s CPI increased 0.2 percent in August, the same rate as in July. While five major components recorded increases, three decreased. Consumer prices increased 1.4 percent on a year-on-year basis in the month after recording a gain of 1.2 percent in July. However, it came in below analysts’ expectation of 1.5 percent gain. The highest inflation rate recorded in four months was driven by gasoline price increase and higher homeowners’ replacement costs.
#17: Canada Core Retail Sales (10/20/2017 Friday 12:30 GMT)
In Canada, retail sales increased by 0.4 percent on a month-over-month basis in August after the reading for the previous month were revised to represent flat growth. The retail sales figure for the month came in better than analysts’ expectation of 0.1 percent improvement. On a year-on-year basis, retail sales jumped 7.8 percent, recording the strongest increase since January 2016.
Core retail sales, which exclude automobiles, increased by 0.2 percent, following a gain of 0.4 percent in the prior month (the figure was revised downward from the initially reported 0.7 percent increase). Analysts had expected that core retail sales would increase by 0.4 percent in August.
#18: Fed Chair Janet Yellen Speaks (10/20/2017 Friday 23:30 GMT)
Janet Yellen, Fed Chair, is scheduled to speak on the subject “Monetary Policy Since the Financial Crisis” at the Herbert Stein Memorial Lecture in Washington DC. The audience is expected to ask questions. Markets often remain volatile during her speeches.