The Week Ahead – Data, Covid-19, Geopolitics and More to Keep the Markets Busy
On the Macro
It’s a busy week ahead on the economic calendar, with 79 stats in focus in the week ending 2nd October. In the week prior, 32 stats had been in focus.
For the Dollar:
It’s a particularly busy week ahead on the economic data front.
Early in the week, September consumer confidence figures will be the key driver on Tuesday.
The market focus will then shift to September ADP nonfarm employment change figures due out on Wednesday.
While finalized 2nd quarter GDP numbers are also due out, these are unlikely to have a material impact on the day.
On Thursday, August inflation and personal spending figures are due out along with the ISM Manufacturing PMI for September.
With the weekly jobless claims also due out, there’s plenty to consider ahead of Friday’s labor market numbers.
At the end of the week, September’s nonfarm payroll and the unemployment rate will also have a material impact.
Trade data, finalized Markit survey PMIs, factory orders, and Michigan consumer sentiment figures should have a limited impact in the week.
Throughout the week a plethora of FOMC members’ speeches is also scheduled.
On the geopolitics front, the markets will also get the first of the Presidential debates on Wednesday. It could be a humdinger of a week…
The Dollar Spot Index ended the week up by 1.85% to 94.642.
For the EUR:
It’s also a busy week ahead on the economic data front.
Early in the week, key stats include prelim inflation figures for September and economic sentiment figures for the Eurozone.
Following disappointing August inflation figures, expect any pickup in deflationary pressure to test the EUR.
On Wednesday, French and German consumer spending and German unemployment figures are due out.
Eurozone inflation figures will also be in focus ahead of another busy day on Thursday.
On Thursday, Manufacturing PMIs for Italy and Spain will be in focus. Expect plenty of interest in the numbers.
Barring any marked deviation from prelim, however, finalized numbers from France and Germany will be brushed aside. The Eurozone’s finalized PMI will influence, however.
Other stats in the week include the Eurozone’s unemployment rate that should have a limited impact.
On the monetary policy front, ECB President Lagarde is scheduled to speak on Monday and Wednesday.
With geopolitics also front and center, the EU leader summit later in the week will also need monitoring. Brexit will undoubtedly be a hot topic.
The EUR/USD ended the week down by 1.77% to $1.1631.
For the Pound:
It’s a relatively quiet week ahead on the economic calendar. September’s finalized Manufacturing sector PMI on Thursday will be the key driver.
Finalized 2nd quarter business investment and GDP numbers are also due out on Wednesday. Barring any deviation from prelims, however, the numbers will likely have a muted impact on the Pound.
The lighter economic calendar will leave the Pound in the hands of Brexit and COVID-19.
The GBP/USD ended the week down by 1.32% to $1.2746.
For the Loonie:
It’s a relatively quiet week ahead on the economic calendar.
July GDP and August RMPI numbers are due out mid-week.
Expect July’s GDP to have the greatest impact on Wednesday.
From elsewhere, economic data from the U.S and China will also influence crude oil prices and the Loonie.
The Loonie ended the week down by 1.38% to C$1.3386 against the U.S Dollar.
Out of Asia
For the Aussie Dollar:
It’s a relatively busy week ahead on the economic calendar.
On Wednesday, August building approvals and private sector credit figures are due out. We would expect the private sector credit figures to have the greatest impact.
On Thursday, the focus shifts to manufacturing numbers for September, ahead of August retail sales figures on Friday.
With RBA reliant upon consumer spending to support economic recovery, the retail sales figures will draw plenty of attention.
Market risk sentiment and economic data from China will also influence, however.
The Aussie Dollar ended the week down by 3.54% to $0.7031.
For the Kiwi Dollar:
It’s a relatively quiet week ahead on the economic calendar.
Key stats include August building consents and September business confidence figures.
Expect the business confidence figures to have the greatest impact on the day.
From elsewhere, China’s manufacturing PMIs will also influence in the week. We’ve seen plenty of Kiwi Dollar sensitivity to economic data from China.
The Kiwi Dollar ended the week down by 3.15% to $0.6546.
For the Japanese Yen:
It is a busier week than usual on the economic calendar.
In the 1st half of the week, September inflation figures are due out along with August industrial production and retail sales figures.
In the 2nd half of the week, the 3rd quarter’s Tankan survey numbers are due out that will draw plenty of interest.
The Japanese Yen ended the week down by 0.97% to ¥105.58 against the U.S Dollar.
Out of China
It’s a relatively busy week ahead on the economic data front.
September’s private sector PMIs are due out on Wednesday. Expect the Caixin Manufacturing PMI to have the greatest impact on risk sentiment on the day.
Going into the week, industrial profit figures due out on Sunday that will also draw interest.
Expect the markets to be sensitive to any major speed bumps amidst U.S-China tensions.
The Chinese Yuan ended the week down 0.81% to CNY6.8238 against the U.S Dollar.
Geo-Politics
UK Politics:
It could be quite a week for the Pound. September is coming to a rapid end and the EU Leaders’ Summit is later in the week.
As things stand, Britain and the EU are nowhere near a blueprint. With the Internal Market Bill now also in the loop, is it judgment day? The markets have been waiting since the summer of 2016 to get a sense of what Brexit will look like.
With Johnson at the helm, the risk has always been for Britain to pull out of talks. Is this the week that the curtain comes down on the EU and its demands?
U.S – China
There’s never a dull moment. With the Presidential Election debates kicking off this week, China will likely remain a hot topic.
With Trump trailing Biden, time is running out, and smear tactics are more than likely. The markets may not like it, however.
U.S Politics
Presidential Election fever is picking. Brokers are calling for more margin to manage an anticipated spike in volatility. Trump continues to attack China on COVID-19 and tech.
The first of the Presidential Election Campaigns in the week ahead will set the tone.
Investors will get a sense of who the market favors during the course of the debate…
This article was originally posted on FX Empire
