The Week Ahead – U.S Politics, Trump, Brexit, and Economic Data in Focus

On the Macro

It’s a busy week ahead on the economic calendar, with 53 stats in focus in the week ending 9^th October. In the week prior, 74 stats had been in focus.

For the Dollar:

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

On Monday, the market’s preferred ISM Non-Manufacturing PMI for September is due out. With some market jitters over the economic outlook, expect some sensitivity to the numbers.

The focus will then shift to JOLT’s job openings on Tuesday and the weekly jobless claims on Thursday.

On the monetary policy front, the FOMC meeting minutes due out on Wednesday will draw interest, as will FED Chair Powell. Powell is scheduled to speak on Tuesday.

After last week’s 1^st presidential debate, however, it could be election fever that begins to grip the markets. The markets will also be monitoring Trump’s health in the week. Any deterioration and expect risk aversion to hit the markets.

The Dollar Spot Index ended the week down by 0.84% to 93.844.

For the EUR:

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

On Monday, September service sector PMIs for Italy and Spain are due out along with retail sales figures for the Eurozone.

Finalized composite and services PMIs are also due out from France, Germany, and the Eurozone.

Expect EUR sensitivity to the PMIs and retail sales figures.

On Tuesday, the focus then shifts to German factory orders, due out ahead of German industrial production and trade data.

Expect Tuesday’s factory orders and Wednesday’s industrial production figures to have the greatest impact.

On the monetary policy front, ECB President Lagarde is scheduled to speak in the week. On Thursday, the ECB monetary policy meeting minutes will also garner plenty of interest.

The EUR/USD ended the week up by 0.73% to $1.1716.

For the Pound:

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

At the start of the week, September’s finalized services and composite PMI are in focus. With the BoE talking of negative rates, expect Pound sensitivity to any revisions.

On Tuesday, retail sales figures are in focus ahead of a busy end to the week.

GDP, industrial and manufacturing production and trade data are due out on Friday.

Expect the GDP and manufacturing PMI figures to have the greatest impact on the day.

Away from the economic calendar, Brexit news and COVID-19 updates will also influence and could overshadow the numbers.

Updates from the weekend of high-level talks will set the tone.

The GBP/USD ended the week up by 1.48% to $1.2935.

For the Loonie:

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

In the early part of the week, August trade data and September’s Ivey PMI will draw interest.

Expect Tuesday’s trade data to have the greatest impact.

The focus will then shift to September employment numbers due out on Friday.

Away from the economic calendar, crude oil prices will also influence. There are some concerns over the sustainability of the economic recovery amidst fresh COVID-19 spikes.

The Loonie ended the week up by 0.58% to C$1.3308 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

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

On Tuesday, business confidence figures are in focus ahead of August trade data on Tuesday.

The main event of the week, however, will be the RBA’s interest rate decision on Tuesday.

Economic data has been largely positive since the last meeting, which should leave the RBA promising support if needed.

The Aussie Dollar ended the week up by 1.85% to $0.7161.

For the Kiwi Dollar:

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

Key stats include 3^rd quarter business confidence figures on Tuesday and Business PMI numbers on Friday.

Expect both sets of numbers to influence in the week.

While the stats will influence, market risk sentiment and updates from Washington will be the key driver.

The Kiwi Dollar ended the week up by 1.45% to $0.6641.

For the Japanese Yen:

It is another busy week than usual on the economic calendar.

Key stats include finalized service sector PMI numbers, GDP figures, and household spending data.

Expect the GDP and household spending figures to have the greatest influence in the week.

Of greater influence in the week, however, will be the vice-president’s debate and updates from Washington. While progress towards a COVID-19 relief Bill would be Yen negative, Trump’s health will need to improve, else expect the Yen to find support.

The Japanese Yen ended the week up by 0.27% to ¥105.29 against the U.S Dollar.

Out of China

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

Service sector PMI numbers for September are due out at the end of the week.

In a shortened week, expect plenty of influence from the numbers. As things stand, economic indicators have pointed to a robust economic recovery from the COVID-19 lockdown. Any disappointing numbers will test market risk appetite.

Away from the economic calendar, chatter from the U.S will also draw interest in the week.

The Chinese Yuan ended the week up 0.48% to CNY6.7910 against the U.S Dollar.

Geo-Politics

UK Politics:

From the weekend, high-level talks between Boris Johnson and Ursula von der Leyen should support the Pound. The British PM and EU Commission President agreed on the importance of a trade agreement. During Saturday’s talks, it was also agreed to extend Brexit negotiations for another month.

With some progress having been made last week, Michel Barnier will travel to London this week. The following week, David Frost is then scheduled to travel to Brussels.

Ahead of talks this week, Barnier will reportedly visit Angela Merkel on Monday.

While the news is positive for the Pound it could be a choppy week, with updates from Germany and London to provide direction.

U.S Politics

While Election fever is picking up, the markets will now be looking for updates on the U.S President’s health.

On the campaign trail, the VPs go head to head this week. For Biden and the Democrats, Harris’s performance is particularly important. Now that Trump has been infected with COVID-19, however, Pence will also be in the spotlight.

Away from the campaign trail, there is also the COVID-19 relief Bill that will influence risk sentiment. There was no reported progress over the weekend, with Pelosi stating that the two sides continued to disagree on key areas.