Last week, the greenback registered some gains against the major currencies around the world. Stock markets experienced a set back once again last week and this provided a lot of support for both the dollar and the yen. Economic data released over the trading were mixed. The headline durable goods orders beat analysts’ estimates but the core durable goods orders missed expectations. The ECB decided to leave the interest rates unchanged and Draghi’s comments did not create any excitement either.
The discussions related to Brexit did not progress much and the discord among British policymakers weighed down the pound. Meanwhile, the Bank of Canada raised the interest rates and made some optimistic remarks. This boosted the Canadian dollar.
In the U.S., the mid-term elections are scheduled for November 6 and the polls indicate that the Democrats might win the House and Republicans might retain the Senate. The bombs that were sent to former Presidents Obama and Clinton, CNN, George Soros, and other critics of Trump made headlines last week. Its impact on the upcoming elections is unclear. However, the poll results are likely to have some impact on the markets as the voting draws closer.
The upcoming week sees a buildup to the Nonfarm Payroll and included the Bank of England’s interest rate decision, among other events. Here is an outlook on the key releases for next week:
#1: U.S. CB Consumer Confidence (10/30/2018 Tuesday 14:00 GMT)
The Consumer Board’s Consumer Confidence Survey provides an indication of the prevailing business conditions and what developments can be expected in the coming months. The Conference Board’s Consumer Confidence Index rose again in September after registering a substantial improvement in August. Currently, the index stands at 138.4, up from August’s 134.7 level. While the Present Situation Index increased marginally to 173.1 from 172.8, the Expectations Index jumped to 115.3 from 109.3 last month. Consumer Confidence Index forecast for October 2018: 136.3
#2: Canada BoC Governor Stephen Poloz Speaks (10/30/2018 Tuesday 19:30 GMT)
Stephen Poloz, Governor of the Bank of Canada, and Carolyn Wilkins, Senior Deputy Governor, are scheduled to testify before the Standing Committee on Finance in the House of Commons in Ottawa. Markets often turn volatile during his speeches. This is because the traders make an attempt to understand the direction of interest rates in the future.
#3: Australia CPI (10/31/2018 Wednesday 00:30 GMT)
In Australia, consumer prices rose by 0.4 percent in the June quarter, the same rate as in the prior period. However, the reading for the quarter came in slightly below analysts’ expectations for an increase of 0.5 percent. Prices of automotive fuel, hospital and medical services, and tobacco registered significant increases. However, the prices of accommodation and domestic holiday travel, motor vehicles, and vegetables declined. Forecast for third quarter 2018: an increase of 0.5 percent is on the cards
#4: Australia Trimmed Mean CPI (10/31/2018 Wednesday 00:30 GMT)
The Trimmed Mean inflation rate (known elsewhere as core inflation rate) increased by 0.5 percent in the second quarter of this year. In the third quarter, the Trimmed Mean inflation rate is expected to rise by 0.4 percent on a quarter-on-quarter basis.
#5: Japan BoJ Monetary Policy Statement (10/31/2018 Wednesday 03:00 GMT)
The Bank of Japan uses the Monetary Policy Statement as a tool for communicating with investors as regards the monetary policy. It provides the outcome of the policymakers’ decision related to asset purchases and gives a commentary on the economic conditions that impacted their decision. More importantly, it provides an economic outlook, offering clues on future decisions.
#6: Japan BoJ Outlook Report (10/31/2018 Wednesday 05:00 GMT)
The Bank of Japan’s Quarterly Outlook Report provides a good insight into the central bank’s view as regards inflation and economic conditions. These are the key factors that impact future decisions.
#7: Japan BoJ Press Conference (10/31/2018 Wednesday 04:00 GMT)
The Bank of Japan uses the press conference as a tool to communicate with traders as regards the monetary policy. It provides information about the factors that impacted the most recent decision on the interest rate. It also provides the country’s overall inflation and economic outlook and offers clues on future decisions.
#8: Canada GDP (10/31/2018 Wednesday 12:30 GMT)
Canada’s GDP expanded 0.2 percent on a month-over-month basis in July after registering zero growth in the previous month. Analysts had expected the GDP to grow by 0.1 percent. The goods-producing sector registered a growth of 0.3 percent after remaining mostly unchanged in June. The goods-producing sector was boosted by the manufacturing and utility sectors. Meanwhile, the service-producing sectors rose 0.2 percent, following on the 0.1 percent gain registered in June.
#9: Switzerland SNB Chairman Jordan Speaks (10/31/2018 Wednesday 17:15 GMT)
Thomas Jordan, Governing Board Chairman of the Swiss National Bank, is scheduled to deliver a talk on the subject “Protectionism makes monetary policy difficult” at the Bern Economic Society. Markets often remain volatile during his speeches because traders make an attempt to understand the direction of interest rates.
#10: Canada BoC Governor Stephen Poloz Speaks (10/31/2018 Wednesday 20:15 GMT)
Stephen Poloz, Governor of the Bank of Canada, and Carolyn Wilkins, Senior Deputy Governor, are scheduled to testify before the Standing Committee on Banking, Trade, and Commerce, in Ottawa. Markets often turn volatile during his speeches. This is because the traders make an attempt to understand the direction of interest rates in the future.
#11: U.K. Manufacturing PMI (11/01/2018 Thursday 09:30 GMT)
In the U.K., the IHS Markit/CIPS Manufacturing PMI increased unexpectedly to the 53.8 level in September after the reading for the prior month was revised upward to the 53.0 level. Analysts had expected the Manufacturing PMI to decline to the 52.5 level. New orders and output registered strong growth and one of the new export businesses recovered after a solid contraction in August. Further, business optimism and employment increased in September. Moreover, the input cost rate and output charge inflation strengthened. Forecast for October 2018: 53.1
#12: U.K. BoE Inflation Report (11/01/2018 Thursday 12:00 GMT)
Released on a quarterly basis, the Inflation Report provides a projection with respect to economic growth and inflation over the next two years. Further, the Governor of the Bank of England holds a press conference for discussing the contents of the Report after its release.
#13: U.K. BoE MPC Official Bank Rate Votes (11/01/2018 Thursday 12:00 GMT)
The Monetary Policy Committee members voted unanimously (0-0-9) to leave the rates unchanged at the current level of 0.75 percent. However, the policymakers decide to go ahead with the ongoing monetary policy tightening regime though at a gentler pace as long as the Brexit adjustment was smooth. The vote was in line with analysts’ expectations after the 0.25 percent hike in August. It is expected that the interest rates will remain on hold for the remaining part of this year. A couple of increases can be expected in 2019.
#14: U.K. BoE Monetary Policy Summary (11/01/2018 Thursday 12:00 GMT)
Released on a monthly basis, the Monetary Policy Summary is used as a tool by the central bank’s MPC for communicating with investors as regards the monetary policy. In addition to providing the outcome of members’ vote on the most recent interest rate decision, it also contains policy measures and a commentary on the economic conditions that impacted their decision. More importantly, it provides an economic outlook and clues on future decisions.
#15: U.K. BoE Official Bank Rate (11/01/2018 Thursday 12:00 GMT)
The Bank of England decided to leave the Official Bank Rate steady at 0.75 percent during the meeting on September 13, following the 25bps in the prior month. The decision was in line with analysts’ expectations.
#16: U.K. BoE Governor Mark Carney Speaks (11/01/2018 Thursday 12:30 GMT)
Mark Carney, Governor of the Bank of England, is scheduled to participate in a press conference in London along with the MPC members to discuss the Inflation Report. Markets often remain volatile during his speeches because traders make an attempt to understand the direction of interest rates.
#17: U.S. ISM Manufacturing PMI (11/01/2018 14:00 GMT)
In the U.S., the ISM Manufacturing PMI declined to the 59.8 level in September from the 61.3 level in August, the highest figure since May 2004. The reading for September came in slightly below analysts’ expectations of 60.1 as inventories and new orders increased less than expected. Manufacturers continued to remain concerned as regards the tariff-related activity. Forecast for October 2018: 59.0
#18: New Zealand ANZ Business Confidence (11/02/2018 Friday 00:00 GMT)
In New Zealand, the ANZ Business Confidence Index rose to -38.3 in September from the decade low level of -50.3 hit in the previous month. Expectations regarding employment, profit, and pricing improved. Further, intentions as regards residential construction and exports rose sharply. However, investment intentions fell.
#19: Australia Retail Sales (11/02/2018 Friday 00:30 GMT)
In Australia, retail trade increased 0.3 percent on a month-over-month basis in August after remaining unchanged in the prior month. The reading for the month beat analysts’ expectations for a 0.2 percent increase. Restaurants, cafes, and takeaway food services led the increases. These sectors were closely followed by clothing/personal accessory retailing, other retailing, department stores, and domestic goods retailing businesses. Food retailing remained largely unchanged. Forecast for September 2018: an increase of 0.3 percent on the cards
#20: Canada Employment Change and Unemployment Rate (11/02/2018 Friday 12:30 GMT)
Canada added 63,300 jobs in September after losing 51,600 jobs in the prior month. The reading for September came in well above analysts’ expectations for a gain of 25,000 jobs. This is the biggest job addition so far in 2018. While part-time employment increased 80,200, full-time employment declined by 16,900. Employment increased in the private sector but the number of employees in the public sector remained unchanged. Meanwhile, the unemployment rate declined to 5.9 percent from 6.0 percent in August. This was in line with analysts’ expectations.
#21: U.S. Average Hourly Earnings (11/02/2018 Friday 12:30 GMT)
In the U.S., the average hourly earnings of private nonfarm employees increased by 0.3 percent on a month-over-month basis in September after the reading for the previous month was revised downward to a gain of 0.3 percent. The figure for the month matched with analysts’ expectations. Forecast for October 2018: an increase of 0.2 percent is on the cards
#22: U.S. Non-Farm Employment Change (11/02/2018 Friday 12:30 GMT)
In the U.S., nonfarm payrolls rose by 134,000 in September after the figure for the prior month was revised upward to 270,000. However, the figure for the month was below analysts’ expectations 185,000 job additions. This is the lowest figure in a year. Job gains were reported in business and professional services, health care, and transportation and warehousing sectors. Forecast for October 2018: 191,000 jobs are expected to be added
#23: U.S. Unemployment Rate (11/02/2018 Friday 12:30 GMT)
In the U.S., the unemployment rate dropped to 3.7 percent in the month of September from 3.9 percent in the prior month. Analysts had expected the unemployment rate to come in at 3.8 percent. This is the lowest unemployment rate ever since December 1969. The number of unemployed persons in the U.S persons decreased 270,000 to 6.0 million. Forecast for October 2018: 3.8 percent