Financial markets brace for a week of uncertainty with pivotal events like Fed Chair Powell's speeches, RBA's rate hike, and UK GDP on the horizon.
Fed Chair Powell and FOMC member speeches will deliver more guidance on Fed policy goals.
The markets expect the RBA to announce another interest rate hike on Tuesday.
UK GDP numbers and Bank of England speeches could yield Pound volatility.
The US Dollar
On Thursday, US initial jobless claims will draw investor interest. Another spike in jobless claims, following recent labor market data, could reinforce bets on the Fed concluding its rate hike cycle.
Consumer sentiment figures for November also warrant consideration on Friday. Beyond the headline numbers, consumer sentiment toward the 1-year and 5-year inflation expectations will also move the dial.
While the stats will influence the market appetite for the US dollar, Fed commentary also needs consideration.
Fed Chair Powell is on the calendar to deliver speeches on Wednesday and Thursday. FOMC members will also speak throughout the week.
The performance of the German economy will draw investor attention in the week ending November 10, 2023. Economic indicators from Germany could impact the appetite for the EUR/USD.
On Monday, German factory orders and the finalized euro area services PMI figures will garner investor interest.
Barring revisions to the PMIs for France and Germany, factory orders and the Eurozone PMIs will likely have more impact.
German industrial production and finalized inflation figures will be in focus on Tuesday and Wednesday. EUR/USD sensitivity will likely intensify as investors begin considering Q4 data.
In the second half of the week, the ECB will be in focus. The ECB Economic Bulletin (Thurs) and ECB President Lagarde (Thurs/Fri) will give investors an ECB view of the outlook for the economy, inflation, and possibly monetary policy.
It will be a pivotal week for the Pound. On Tuesday, the BRC Retail Sales Monitor will provide the markets with a look at the consumer demand environment. Elevated interest and mortgage rates have affected the UK housing sector and consumer confidence, dampening spending.
House price figures for October will also draw interest on Tuesday. If house prices decline further in October, it is likely to have an impact on the Pound.
The housing sector will be in focus again on Thursday before the September GDP Report on Friday. GDP numbers for Q3 will move the dial. Beyond the headline figures, investors must consider contributions from the services sector and consumption.
Beyond the numbers, Bank of England speeches need consideration. BoE Governor Andrew Bailey (Wed) and Chief Economist Huw Pill (Tues/Thurs) are on the calendar to speak.
Trade data and the Bank of Canada will be the focal points for the Loonie. While trade data will influence, Bank of Canada commentary could have more impact. Deputy Governor Kozicki (Wed) and Senior Deputy Governor Rogers (Fri) are on the calendar to speak.
The Australian Dollar
The RBA and the Aussie dollar will be in the spotlight on Tuesday. Economists forecast the RBA to raise rates by 25 basis points to curb inflation. However, the RBA has surprised the markets previously, exposing the Aussie dollar to a possibly volatile session.
Beyond the interest rate decision, investors must consider the rate statement and any commitment to continue raising interest rates.
The Kiwi Dollar
On Wednesday, inflation expectations will impact the Kiwi dollar. Sticky inflation could force the RBNZ to consider lifting the cash rate.
However, electronic card retail sales on Thursday and business PMI numbers on Friday also require attention and may influence the Kiwi dollar. A slump in card retail sales could give the RBNZ breathing room to digest another round of economic indicators.
The Japanese Yen
Monday will see the focus shift to finalized services PMI numbers and the minutes from the Bank of Japan monetary policy meeting. The monetary policy meeting minutes are from the October meeting, which should limit the impact on the Japanese Yen.
However, household spending will move the dial on Tuesday. The Bank of Japan (BoJ) needs wage growth to fuel demand and demand-driven inflation. Another weak report will leave the BoJ to consider the likely effectiveness of the Japanese Government’s stimulus package.
Out of China
Trade data will be in the spotlight on Tuesday. A larger-than-expected decline in exports may raise questions about the effectiveness of the stimulus measures.
On Thursday, inflation figures also need consideration. Producer prices will give the markets a view of the demand environment. However, consumer price inflation will also influence market risk sentiment.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.