The Fed is ready to start tapering in November. Since the markets were expecting this and it wasn’t a surprise, the USD slumped allowing risk-on currencies and gold to rally up.
5 important things this week will bring us!
- Britain’s GDP and manufacturing production (Mon, 11:30 MT (9:30 GMT) time) – According to analysts, British GDP growth will remain at the same level. As for the level of manufacturing production, it is expected to advance by 0.2%. Higher-than-expected figures will support the British pound.
- New Zealand's monetary policy statement and press conference (Wed, 3:00 and 4:00 MT (1:00 and 2:00 GMT) time) – The rate hike is not going to happen, but the tone of the statement, as well as the comments by the RBNZ governor Adrian Orr during the press conference, may provide additional volatility to the NZD.
- Britain’s CPI (Wed, 11:30 MT (9:30 GMT) time) – The level of consumer price index for Great Britain is anticipated to decline to 1.9% in January. If the actual figures are higher, the GBP will be supported amid the Brexit uncertainties.
- US CPI and core CPI (Wed, 15:30 MT (13:30 GMT) time) – As for the US indicators, the headline CPI is expected to increase by 0.1%, while its core level (without food and energy) will rise by 0.2%. If the data is even more positive, the USD will strengthen.
- US PPI, retail sales and core retail sales (Thu, 15:30 MT (13:30 GMT) time) – Finally, on Friday the USD may rise due to the following releases. Analysts predict the levels of retail sales and PPI to increase by 0.1%. As for the level of core retail sales, it is projected to stay at the last month’s levels.
- Brexit remains one of the key uncertainties for the market and for the British pound in particular. The next Brexit debates at the Parliament are scheduled for February 14. During this meeting, the British Prime Minister Theresa May is expected to announce the results of her negotiations with the EU. However, May’s attempts to make changes to the current deal were rejected by the President of the European Commission Jean-Claude Juncker last week. That is why this meeting won’t be final in the long-lasting Brexit drama. Reportedly, the next vote on Theresa May’s deal is likely to happen no earlier than on February 25-27. As the final deadline for Britain's divorce with the EU comes closer, Theresa May wrote a letter to the Labor opposition leader Jeremy Corbyn suggesting a discussion between the parties to consider "alternative arrangements" to the Irish backstop. If her negotiations are successful, this may bring support to the British pound.
- The third round of trade talks between the US and China is expected this week in Beijing. The previous discussions were successful but did not lead to the final deal. This meeting will impact the market sentiment a lot, as the investors will be looking for any significant progress ahead of the final deadline of the trade truce on March 1.
- Also, the US government may be shut down again, if the officials do not reach an agreement on Trump's demand for funding the wall between the US and Mexico until February 15. If it happens, the USD will be affected.
US Retail Sales will be out on October 15 at 15:30 MetaTrader time (GMT+3).
Australia will release employment change and an unemployment rate on Thursday, October 14, at 03:30 MT (GMT+3).
The United States will release the weekly Unemployment Claims on October 21, at 15:30 MT time (GMT+3).
Great Britain will publish the Inflation Rate on October 20, at 09:00 MT time (GMT+3).
The bullish movement in the stock market is gaining speed, and Bitcoin ETFs are closer than they might seem. What do we need to know for the next trading week?