This week will be less eventful than previous weeks. On Monday, the People Bank of China (PBoC) will hold a meeting, where the interest rate is expected to be lowered. Also on Monday, we will have the annual meeting of the International Monetary Fund. On Wednesday, the Bank of Canada (BoC) will hold its monetary policy meeting. Economists expect a double rate cut of 0.5% due to weak economic data and declining inflation. On Thursday, traders will evaluate data on business activity in key economies, while on Friday, investors’ attention will be directed to inflation data in the capital of Japan, as well as the report on retail sales in Canada. Also, traders shouldn’t forget that the US reporting season has started and Tesla (TSLA), Coca-Cola (KO), T-Mobile (TMUS), Boeing (BA), and semiconductor companies will report this week.
Monday, October 21
On Monday, the world’s central bank governors and finance ministers will gather in Washington for the annual meeting of the International Monetary Fund and the World Bank to discuss how countries can cope with low growth and high debt levels. That could affect medium- to long-term trends. Investors’ attention will also be directed to China’s central bank meeting. The PBoC is expected to cut rates on both 1-year and 5-year loans to stimulate the economy further. This may boost Asian indices, especially CHA50 and HK50, and indirectly, Australian AU200.
Main events of the day:
- China PBoC Loan Prime Rate (m/m) at 04:15 (GMT+3);
- German Producer Price Index (m/m) at 09:00 (GMT+3);
- US FOMC Member Kashkari Speaks at 20:00 (GMT+3);
- IMF/World Bank Annual Meetings (All Day).
Tuesday, October 22
No major events are expected on Tuesday. During the day it is worth paying attention to the speeches of representatives of the ECB, the Bank of England (BoE), and the FOMC.
Main events of the day:
- New Zealand Trade Balance (q/q) at 00:45 (GMT+3);
- US FOMC Member Daly Speaks at 01:40 (GMT+3);
- UK BoE Gov Bailey Speaks at 16:20 (GMT+3);
- US FOMC Member Harker Speaks at 17:00 (GMT+3);
- Eurozone ECB President Lagarde Speaks at 22:15 (GMT+3).
Wednesday, October 23
On Wednesday, investors will focus on the Bank of Canada (BoC) interest rate decision. The swaps market puts the probability of the BoC cutting the rate by 50 bps at about 85%, up from 55% a week ago. Such a sharp rate cut could put a lot of pressure on the Canadian dollar, especially if oil prices continue to decline (the Canadian dollar is a commodity currency). At the US session, crude oil inventory data will be in the investor’s focus. Oil prices are under pressure after falling about 7% last week as traders analyze the gloomy demand forecasts in China, the largest importer, and the ongoing conflict in the Middle East.
Main events of the day:
- Singapore Consumer Price Index (m/m) at 08:00 (GMT+3);
- US FOMC Member Bowman Speaks at 16:00 (GMT+3);
- Canada BoC Monetary Policy Report at 16:45 (GMT+3);
- Canada BoC Interest Rate Decision at 16:45 (GMT+3);
- US Existing Home Sales (m/m) at 17:00 (GMT+3);
- Eurozone ECB President Lagarde Speaks at 17:00 (GMT+3);
- Canada BoC Press Conference at 17:30 (GMT+3);
- US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
- US FOMC Member Barkin Speaks at 19:00 (GMT+3);
- New Zealand Gov Orr Speaks at 20:00 (GMT+3);
- UK BoE Gov Bailey Speaks at 23:30 (GMT+3).
Thursday, October 24
Thursday, we will see a lot of statistics on business activity in the manufacturing and services sectors for key economies. Overall, the indicators are expected to improve, which may positively affect the national currency. Natural gas inventory data should also not be missed. Gas prices have been under pressure for the last 2 weeks due to lower consumption with high inventories. Rising inventories may put additional pressure on the XNG price and vice versa.
Main events of the day:
- Australia Manufacturing PMI (m/m) at 01:00 (GMT+3);
- Australia Services PMI (m/m) at 01:00 (GMT+3);
- Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
- Japan Services PMI (m/m) at 03:30 (GMT+3);
- German Manufacturing PMI (m/m) at 10:30 (GMT+3);
- German Services PMI (m/m) at 10:30 (GMT+3);
- Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
- Eurozone Services PMI (m/m) at 11:00 (GMT+3);
- UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
- UK Services PMI (m/m) at 11:30 (GMT+3);
- US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
- US Manufacturing PMI (m/m) at 16:45 (GMT+3);
- US Services PMI (m/m) at 16:45 (GMT+3).
- US New Home Sales (m/m) at 17:00 (GMT+3);
- US Natural Gas Storage (w/w) at 17:30 (GMT+3).
Friday, October 25
On Friday, traders should monitor Canada’s retail sales data. Economists expect growth of 0.5%, down from 0.9% last month. Better-than-forecast data may briefly give the Canadian dollar fuel to strengthen. In the Asian session, traders should pay attention to the Tokyo Inflation Rate data, a leading indicator of inflation across the country. Inflation in the Japanese capital is expected to fall from 2.0% to 1.7% y/y, which will further distance the Bank of Japan from its normalization policy and could seriously hurt the yen.
Main events of the day:
- Japan Tokyo Core CPI (m/m) at 02:30 (GMT+3);
- German Ifo Business Climate (m/m) at 11:00 (GMT+3);
- Canada Retail Sales (m/m) at 15:30 (GMT+3);
- US Durable Goods Orders (m/m) at 15:30 (GMT+3);
- US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
