The Week Ahead: Brexit, Trade Talks and FOMC Member Chatter in Focus

Economic data is on the lighter side in the week ahead. The lack of stats will leave the majors in the hands of geopolitics…
Bob Mason
Currency exchange notice board

On the Macro

For the Dollar:

It’s a quieter week ahead on the economic calendar.

September wholesale inflation and inflation figures due out on Tuesday and Thursday will have the greatest influence.

On Tuesday, we can expect some influence from the JOLTs job openings, with quit rates likely to garner particular interest.

At the end of the week, prelim Michigan Consumer sentiment and expectation figures for October will also provide direction.

Outside of the stats, any updates from the resumption of high-level trade talks between the U.S and China will likely overshadow the stats.

There’s also impeachment chatter to consider.

The Dollar Spot Index ended the week down by 0.27% to $98.840.

For the EUR:

It’s also a relatively busy week ahead on the economic data front.

German factory orders, industrial production and trade data due out on Monday, Tuesday and Thursday will direct the EUR.

Finalized inflation figures out of Germany and Spain would likely have a muted impact on the EUR, however.

Expect a strong response from the EUR should the numbers impress. Forecasts are EUR negative.

On the geopolitical front, Brexit will also have an impact in the week.

The EUR/USD ended the week up by 0.35% to $1.0978.

For the Pound:

It’s a busy week ahead on the economic calendar.

Key stats include September’s Retail Sales Monitor and 2nd quarter Labour Productivity on Tuesday. On Thursday, GDP numbers and August industrial and manufacturing production and trade data will also influence.

The markets will likely brush aside house price figures due out on Monday and Thursday.

While we can expect the Pound to be responsive, Brexit and British politics will continue to overshadow the numbers.

The GBP/USD ended the week up by 0.32% to $1.2331.

For the Loonie:

It’s a relatively quiet week ahead on the data front.

Key stats include September employment change numbers and the unemployment rate due out on Friday.

Of less influence through the week is housing sector figures due out on Tuesday and Thursday.

Outside of the numbers, OPEC will also influence with updates from the October meeting likely to move oil prices.

The Loonie ended the week down by 0.51% to C$1.3314 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week ahead.

Key stats include September business confidence and October consumer sentiment figures due out on Tuesday and Thursday.

We can expect the Aussie Dollar to be particularly sensitive to the numbers.

On Thursday, August home loans will also influence, with the RBA looking for continued improvement in the housing sector.

Outside of the numbers, expect updates from trade talks to also influence in the week.

The Aussie Dollar ended the week up by 0.10% to $0.6771.

For the Japanese Yen:

It’s a quiet week ahead on the economic calendar.

Key stats are limited to August household spending figures due out on Tuesday.

Influence on the Japanese Yen will likely be limited, however, as the markets look ahead to the BoJ meeting.

Outside of the numbers, expect market risk sentiment to play a hand in the week. Negative updates from trade talks would give the Yen a boost.

The Japanese Yen ended the week up by 0.91% to ¥106.94 against the U.S Dollar.

For the Kiwi Dollar:

Stats are on the quieter side in the week ahead.

Key stats include September Business PMI and electronic card retail sales figures due out on Friday.

Following the RBNZ’s lack of commitment to further rate cuts, expect dire numbers to weigh heavily on the Kiwi.

Outside of the numbers, risk sentiment will influence in the week.

The Kiwi Dollar ended the week up by 0.38% to $0.6320.

Out of China:

It’s a quiet week on the economic data front, with stats limited to September service sector PMI numbers. Sensitivity to service sector activity has built in recent years, so expect the numbers to influence.

The devil may be in the details, with new orders needing to hold up in September.

The Yuan ended the week down by 0.36% to CNY7.1483 against the Greenback.

Geo-Politics

Iran: It’s still up in the air on what’s next for Iran. News of Iran attempting to hack the 2020 Presidential Election campaign is unlikely to stir things up too much. Whether the Saudis sit back remains to be seen. The U.S President would certainly not want oil prices to spike but…

Impeachment: It’s a long road and there’s likely to be plenty of chatter before it could become a reality. Any vote on progressing the impeachment of Trump would be an interesting one, however.

Trade Wars: Trade talks resume this coming week. Some progress is going to need to be made to support the majors. Economic data was dire last week and a collapse in talks will put pressure on central banks to do more.

UK Politics: Talks resume on Monday. With the EU pushing for major changes to be made to last week’s proposals time, is running out. Johnson reiterated his stance on pulling Britain out of the EU at the end of the month, in spite of the Benn Act.

The Rest

The FED:  A mass of FOMC member speeches throughout the week will need considering. Following last week’s stats from the U.S, will there be the talk of a 2nd rate cut or can the unemployment rate give the FED a month or two to assess?

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