This week the focus mainly falls on CPI and Retail Sales releases. FOMC Minutes and the EU Summit on Brexit stand out as the events of the week.
Monday – 15 October 2018
- Retail Sales (USD, GMT 12:30) – Retail Sales are an important determinant of consumer spending thus making it a leading indicator for overall economic growth. Consensus expectations suggest that Retail Sales ex Autos should have increased by 0.3% in September, similar to the August number.
- Consumer Price Index (NZD, GMT 21:45) – One of the most important figures for FX markets, the y/y CPI for Q3 is expected to come out at 1.7%, compared to 1.5% in the previous quarter.
Tuesday – 16 October 2018
- Average Earnings Excluding Bonus and Unemployment (GBP, GMT 08:30) – Average Earnings are a strong predictor of overall economic activity and inflation, with August numbers expected to have increased by 2.8%, compared to 2.9% last year. Unemployment is expected to remain stable at 4%.
- Capacity Utilisation and Industrial Production (USD, GMT 13:15) – Capacity Utilisation is a measure of productivity in the economy, suggesting how much production capacity is actually used over a period of time, while Industrial Production shows the volume of production of US industries. The former is expected to have increased slightly to 78.2% in September, while consensus forecasts for the latter suggest an increase of 0.3% m/m.
Wednesday – 17 October 2018
- EU Brexit Summit (GBP and EUR, Evening) – Events of the Week – European Union leaders are expected to meet in Brussels to discuss a possible Brexit deal with Britain, over dinner. The implications from reaching a Brexit deal will primarily affect the UK, probably boosting the Sterling. In addition, the Euro will also benefit as it will lift the cloud of uncertainty over the region.
- Consumer Price Index (GBP, GMT 08:30) – The UK CPI is expected to have risen to 2.8%, compared to 2.7% in August, continuing its upwards trend after the Sterling depreciation as a result of the Brexit decision.
- Consumer Price Index (EUR, GMT 09:00) – The Euro Area CPI is expected to have remained stable at 2.1% in September, close to the ECB target of 2%. Core CPI is expected to have risen to 1% in September.
- FOMC Minutes (USD, GMT 18:00) – Events of the Week – The FOMC minutes, similar to the ECB Reports, provide an assessment as regards the views of the Fed’s policymakers about the interest-setter’s future stance and are usually a cause for FX turbulence.
- Trade Balance (JPY, GMT 23:50) – Japan’s Trade Balance is one of the most important indicators for the Asian economy. A negative trade balance usually suggests bad news for the currency but is beneficial for the stock market. Overall, the trade deficit is expected to have worsened compared to the August number.
Thursday – 18 October 2018
- EU Brexit Summit (GBP and EUR, Full Day) – Events of the Week – European Union leaders will meet with UK PM Teresa May on Thursday to further discuss Brexit issues. Comments after the Summit could lead to increased volatility in the markets.
- Labour Market Data (AUD, GMT 00:30) – Labour market data for Australia are expected to come out slightly weaker than last month, despite unemployment remaining at the same level. Participation rate is expected to have decreased to 65.6% while employment change is expected to have been positive but less than August.
- Retail Sales ex Fuel (GBP, GMT 08:30) – Retail Sales ex Fuel in the UK are expected to increase in September, reaching 3.6% on a y/y basis, compared to 3.5% last month.
- Philadelphia Fed Manufacturing Survey (USD, GMT 12:30) – The Philly Fed index is expected to continue its movement above 0, suggesting an expansion, albeit losing some steam and returning to 20, compared to 22.9 last month.
- Consumer Price Index (JPY, GMT 23:30) – The National CPI Index of Japan is expected to stand at approximately the same levels as last month, at 0.9% on a y/y basis.
Friday – 19 October 2018
- Retail Sales ex Autos (CAD, GMT 12:30) – Retail sales are expected to have decreased in Canada, with consensus forecasts suggesting that a -0.2% growth should be registered, compared to 0.9% in July.
- Consumer Price Index (CAD, GMT 12:30) – The Canadian CPI index is expected to have increased to 1.8% compared to 1.7% in August.
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Dr Nektarios Michail
Market Analyst
HotForex
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