The US dollar turned to the upside on Monday. Let's discuss what to expect next from the market.
5 important things this week will bring us!
- US retail sales and core retail sales (Mon, 14:30 MT (12:30 GMT) time) – According to analysts, the level of retail sales will remain the same. At the same time, its core level (excluding automobiles) is forecast to advance by 0.4%. Higher-than-expected figures will support the USD.
- British GDP and manufacturing production (Tue, 11:30 MT (9:30 GMT) time) – Both of the indicators are anticipated to rise by 0.2%. If the actual levels of indicators are higher, the British pound will get positive momentum.
- US CPI and core CPI (Tue, 14:30 MT (12:30 GMT) time) – Here, we also anticipate the advance of 0.2% for both headline and core indicators. The greater levels will be appreciated by the USD bulls.
- US core durable goods orders and PPI (Wed, 14:30 MT (12:30 GMT) time) – The level of core durable goods orders is going to rise by 0.1%, according to forecasts. The forecast for the producer price index is also positive and expected to increase by 0.2%. Let's see if the actual data will make the USD rise.
- BOJ monetary policy statement (Fri, tentative) – The most dovish central bank will keep its interest rate unchanged at -0.10%. Moreover, the BOJ governor Haruhiko Kuroda mentioned the further easing of its monetary policy if it's needed. Any unexpected hawkish hints will support the JPY.
- It’s all about Brexit: the British Prime Minister Theresa May is going to face another vote tomorrow at the Parliament. The hopes of backing the current Brexit deal on time are fading, as Theresa May rejected the latest offer from the European Union during this weekend. The forecasts for tomorrow’s vote are not optimistic. According to the latest news, the British prime minister plans to change tomorrow’s vote from meaningful to the provisional. This will provide her an opportunity to propose further changes to the deal. According to the current scenario, if the British PM faces the defeat tomorrow, next day, on March 13, the British lawmakers will vote on a no-deal. If that vote is also rejected, the Parliament will vote on the extension of Brexit deadline on Thursday. Any uncertainties will be hurtful for the GBP during these days. On the other hand, positive news or the Brexit delay will push the GBP up.
- The release of Chinese retail sales and industrial production data on Thursday may determine the market sentiment. Latest releases for China raised concerns on the possible slowdown of the second economy in the world. If the data is disappointing, it will result in risk-aversion.
- On Friday, lawmakers will vote on a foreign investment law, which includes measures to protect the intellectual property of foreign companies in an effort to address the US concerns in the trade deal with China.
Three main drivers of the market: the stimulus package, the US presidential election and the coronavirus. Let's look how market reacts.
The USA will publish unemployment claims on October 22 at 15:30 MT time. How to trade after the release?
The focus of traders’ attention shifted from Brexit and the US stimulus to the coronavirus . The WHO claimed that Europe become the new Covid-19 epicenter.
Canada will publish the monthly GDP growth on October 30 at 14:30 MT time.
The European Central Bank publishes the monetary policy statement alongside with an update on the interest rate on October 29, at 14:45 MT time.