Last week, the US dollar continued to dominate the market while expectations of new aggressive interest rate cuts by the US Fed decreased. Meanwhile, the heads of other major global central banks continue to discuss the possibility of new cuts.
The upcoming week, 28.10.2024 – 03.11.2024, will be transitional between months and quarters. Besides, it will be filled with significant economic events and publications.
The US labor market report with September data will be in the spotlight. Market participants will also monitor the publication of important macro statistics on Australia, Germany, the eurozone, the US, China, and Switzerland and wait for the results of the Bank of Japan meeting.
In addition, on Sunday, October 27, Europe will switch to winter time. The clocks will be set back by one hour.
Note: During the coming week, new events may be added to the calendar, and / or some scheduled events may be canceled. GMT time
The article covers the following subjects:
Key facts
- Monday: no important macro statistics is scheduled.
- Tuesday: no important macro statistics is scheduled.
- Wednesday: German CPI, German, eurozone, and US GDP, ADP report.
- Thursday: BoJ interest rate decision, eurozone CPI, US PCE.
- Friday: US NFP, US manufacturing PMI.
- Key event of the week: US NFP.
Monday, October 28
There are no important macro statistics scheduled to be released. However, pay attention to the Bank of Canada Governor Tiff Makclem’s speech.
17:30 – CAD: Bank of Canada Governor Tiff Macklem’s Speech
If Tiff Macklem mentions the Bank of Canada’s monetary policy, the volatility in the Canadian dollar will grow sharply. A signal of monetary policy tightening will bolster the Canadian dollar. Conversely, an intent to ease monetary policy will have a negative impact on the currency.
Additionally, Tiff Macklem will likely clarify the Bank of Canada’s recent interest rate decision and provide guidance for investors ahead of the central bank’s next meeting, which is slated for December 11.
Tuesday, October 29
There are no important macro statistics scheduled to be released.
Wednesday, October 30
00:30 – AUD: Australia Trimmed Mean Inflation Rate for Q3. Consumer Price Index for Q3 and September. Retail Sales
The trimmed mean measure of core inflation in Australia is published by the Reserve Bank of Australia and the Australian Bureau of Statistics. It reflects the retail price of goods and services included in the consumer basket. The trimmed mean takes into account the weighted average of the middle 70% of index components. Previous values: +0.8% (+3.9% YoY) in Q2 2024, +1.0% (+4.0% YoY) in Q1 2024, +0.8% (+4.2% YoY) in Q4 2023, +1.2% (+5.5% YoY) in Q3, +1.0% (+5.9% YoY) in Q2, +1.2% (+6.6% YoY) in Q1 2023, +1.7% (+6.9% YoY) in Q4 2022, +1.8% (+6.1% YoY) in Q3, +1.5% (+4.9% YoY) in Q2 2022, +1.4% (+3.7% YoY) in Q1 2022, +1.0% (+2.6% YoY) in Q4, +0.7% (+2.1% YoY) in Q3, +0.5% (+1.6% YoY) in Q2, +0.3% (+1.1% YoY) in Q1 2021.
The data suggests that inflationary pressures remain robust. If the indicator reading turns out to be worse than expected, the Australian dollar will likely weaken. Conversely, if the indicator value exceeds the forecast, it may positively impact the currency in the short term.
The Consumer Price Inflation Index, published by the Reserve Bank of Australia and the Australian Bureau of Statistics, gauges retail prices of goods and services in Australia. The CPI is the most significant indicator of inflation and changes in consumer preferences. A high indicator reading is positive for the Australian dollar, while a low reading is negative. Previous indicator values: +2.7% in August and +1.0% (+3.8% YoY) in Q2 2024, +1.0% (+3.6% YoY) in Q1 2024, +0.6% (+3.4% YoY) in Q4 2023, +1.2% (+5.4% YoY) in Q3, +0.8% (+6.0% YoY) in Q2, +1.4% (+7.0% YoY) in Q1 2023, +1.9% (+7.8% YoY) in Q4 2022, +1.8% (+7.3% YoY) in Q3, +1.8% (+6.1% YoY) in Q2 2022, +2.1% (+5.1% YoY) in Q1 2022, +1.3% (+3.5% YoY) in Q4, +0.8% (+3.0% YoY) in Q3, +0.8% (+3.8% YoY) in Q2, +0.6% (+1.1% YoY) in Q1 2021.
The Australian central bank’s CPI inflation target ranges between 2% and 3%. According to the minutes of a recent RBA Board meeting, the bank may need to increase interest rates over time to bring inflation back to the target range and take further measures in the coming months to stabilize monetary conditions in Australia.
Now, the RBA, like most of the world’s other major central banks, is facing persistently high inflation.
The expected positive CPI reading is likely positive for the Australian dollar. If the indicator readings are worse than the forecast or the previous value, the Australian dollar will face short-term negative effects.
The Retail Sales Index, published monthly by the Australian Bureau of Statistics, measures the total retail sales volume. The index is often considered an indicator of consumer confidence and spending, reflecting also the near-term state of the retail sector. In advanced economies, domestic consumption plays a significant role in driving GDP growth.
Therefore, deterioration of the indicator values may reveal problems with the country’s GDP growth in the future. This is a negative factor for the national currency, as the economic slowdown may force the national central bank to ease monetary policy for businesses by lowering interest rates in particular.
A surge in the index readings is usually positive for the Australian dollar.
Previous index value: +0.7 in August, 0%, +0.5%, +0.6%, +0.1% -0.4%, +0.2% +1.1%, -2.1%, +1.6%, -0.4%, +0.9%, +0.3%, +0.5%, -0.8%, +0.8%, 0%, +0.4%, +0.2%, +1.9%, -3.9%, +1.7%, +0.4%, +0.6%, +0.6%, +1.3%, +0.2% in prior months. If the data is weaker than the previous figures, the Australian dollar may experience a short-term decline. Conversely, if the data surpasses the previous values, the currency will likely strengthen.
09:00 – EUR: German GDP for Q3 (Preliminary Estimate)
GDP data is one of the key indicators, along with labor market and inflation data, for a country’s central bank in terms of its monetary policy. Strong indicator values strengthen the euro, while a weak GDP report has a negative impact on the currency. In Q2 2024, GDP declined by -0.1% but grew by +0.3% YoY after +0.2% (-0.9% YoY) in Q1, a -0.3% (-0.4% YoY) in Q4 2023, a -0.1% (-0.8% YoY) in Q3 2023.
If the data show a decline in GDP in Q3 2024, the euro will be under pressure. However, positive GDP data will bolster the currency.
10:00 – EUR: Eurozone GDP for Q2 (Preliminary Estimate)
GDP is considered to be an indicator of the overall economic health. A rising trend of the GDP indicator is positive for the euro, while a low reading weakens the currency.
Recent Eurozone macro data has shown a gradual recovery in the growth rate of the European economy after a sharp decline in early 2020.
Previous values: +0.2 (+0.6 YoY), +0.3% (+0.4% YoY) in Q1 2024, 0% (+0.1% YoY) in Q4 2023, -0.1% (0% YoY) in Q3, +0.1% (+0.5% YoY) in Q2, -0.1% (+1.0% YoY) in Q1 2023, 0% (+1.9% YoY) in Q4 2022, +0.7% (+4,0% YoY) in Q3, +0.8% (+4.1% YoY) in Q4 2022, +0.7% (+4,6% YoY) in Q3, +2.2% (+3.9% YoY) in Q3, +2.2% (+14.3% YoY) in Q2, and -0.3% (-1.3% YoY) in Q1 2021.
If the data is below the forecasted and/or previous values, the euro may decline. Conversely, readings exceeding the predicted values may strengthen the euro in the short term. However, the European economy is still far from fully recovering even to pre-crisis levels.
12:15 – USD: ADP Private Sector Employment Report
The ADP report on private sector employment significantly impacts the market and the US dollar. An increase in this indicator value positively affects the greenback. The number of workers in the US private sector is expected to increase again in October after rising by 143k in September, 99k in August, 111k in July, 155k in June, 157k in May, 188k in April, 208k in March, 155k in February, 111k in January 2024, 158k in December, 104k in November, 111k in October, 137k in September, 135k in August, 307k in July, 543k in June, 206k in May, 293k in April, 103k in March, 275k in February, 131k in January 2023.
The growth of the index values may positively affect the US dollar while law index readings adversely. A negative market reaction and a potential decline in the dollar may occur if the data turns out to be worse than forecasted.
The ADP report is not directly correlated with the official data of the US Department of Labor, which is due on Friday. However, the ADP report often serves as a forerunner of the department’s data and significantly influences the market.
12:30 – USD: US GDP Annual Growth Rate for Q3 (Preliminary Estimate)
GDP data is one of the key indicators, along with labor market and inflation data, for the Fed in terms of its monetary policy. A positive indicator reading strengthens the US dollar, while a weak GDP report is harmful for the currency. GDP grew 2.5% in Q2 after gaining +1.4% in Q1 2024, +3.4% in Q4 2023, +4.9%, +2.1% in Q2, +2.2% in Q1 2023.
If the data indicate a decline in GDP in Q3 2024, the US dollar will face significant pressure. Conversely, positive GDP figures will bolster the greenback and US stock indices.
13:00 – EUR: German Harmonized Index of Consumer Prices (Preliminary Estimate)
The Harmonized Index of Consumer Prices (HICP) is published by the European Statistics and is calculated using a methodology agreed upon by all EU countries. The HICP is an indicator for measuring inflation and is used by the European Central Bank to assess price stability. A positive index result strengthens the euro, while a negative one weakens it.
Previous values YoY: +1.8, +2.0, +2.6%, +2.5%, +2.8%, +2.4%, +2.3%, +2.7%, +3.1% in January 2024, +3.8% in December, +2.3% in November, +3.0% in October, +4.3% in September, +6.4% in August, +6.5% in July, +6.8% in June, +6.3% in May, +7.6% in April, +7.8% in March, +9.3% in February, +9, 2% in January, +9.6% in December, +11.3% in November, +11.6% in October, +10.9% in September, +8.8% in August, +8.5% in July, +8.2% in June, +8.7% in May, +7.8% in April, +7.6% in March, +5.5% in February, +5.1% in January 2022.
The data suggests that German inflation continues to decelerate, albeit at a slower pace than expected. This situation is putting pressure on the European Central Bank to ease its monetary policy. Figures lower than the previous reading will likely affect the euro negatively. Conversely, the resumption of inflation growth may provoke the appreciation of the euro. The growth of the indicator values is a positive factor for the currency.
If the October data turns out to be better than previous values, the euro may strengthen in the short term.
Thursday, October 31
01:30 – CNY: China’s Manufacturing and Services PMI by the China Federation of Logistics and Purchasing (CFLP)
This indicator is an essential gauge of the overall Chinese economy. An indicator reading above 50 is positive for the yuan, while a value below 50 is negative for the currency.
Previous values: 49.8, 49.1, 49.4, 49.5, 50.4, 50.8, 49.2, 49.0, 49.5, 50.2, 49.3, 49.0, 48.8, 49.2, 51.9, 52.6, 50.1 in January. The relative rise in the index above 50 strengthens the yuan. Data above 50 indicates increased economic activity, positively affecting the national currency. Conversely, if the index value is below 50, the yuan will face pressure and probably decline.
Likewise, the services sector PMI assesses the state of the services sector in the Chinese economy. An indicator result above 50 is seen as positive for the yuan. Previous values: 50.0, 50.3, 50.2, 50.5, 51.2, 53.0, 50.7, 50.4, 50.6, 51.7, 51.5, 53.2, 54.5, 56.4, 58.2, 56.3, 54.4 in January. Despite the relative decline, the indicator is still above the 50 value, likely influencing the yuan positively. Conversely, the indicator below 50 suggests that the yuan will face pressure and probably decline.
After 03:00 (Exact Time Not Specified) – JPY: Bank of Japan Interest Rate Decision. Bank of Japan Press Conference and Commentary on Monetary Policy
The Bank of Japan will decide on the interest rate. At the moment, the benchmark rate in Japan is 0.25%. The rate will likely remain at the same level. If the rate is cut and returns to negative values, the yen may decline sharply in the currency market, and the Japanese stock market will likely increase. Anyway, a spike in the yen and Asian financial market volatility is expected during this period.
Since February 2016, the Bank of Japan has kept the deposit rate at -0.1% and the 10-year bond yield target around 0%.
During the 19 March meeting, the BoJ made the decision to increase the interest rate by 10 basis points, shifting it from -0.1% to 0% for the first time since 2007, thus concluding the period of negative interest rates that commenced in 2016. Concurrently, the target for long-term JGBs (YCC) was scrapped, although the BoJ intends to maintain the same level of JGB purchases per month without a specific target. On the other hand, the bank will cease the purchase of ETFs and REITs, gradually decrease, and eventually terminate the acquisition of commercial paper and corporate bonds within 12 months.
According to analysts, if the BoJ hints at further rate hikes, the yen will receive significant support.
During the press conference, BoJ governor Kazuo Ueda will comment on the monetary policy. The BoJ continues to adhere to an extra-soft monetary policy. According to former Japanese central bank governor Haruhiko Kuroda, Japan should continue its current soft monetary policy. Markets usually respond prominently to speeches by the BoJ governor. The governor will likely mention the monetary policy again during his speech, leading to increased volatility not only in the yen but also in Asian and global financial markets.
After 06:00 (Exact Time Not Specified) – JPY: Bank of Japan Press Conference
During the press conference, Bank of Japan Governor Kazuo Ueda, who succeeded Haruhiko Kuroda in April 2023, will comment on the bank’s monetary policy. Despite the bank’s earlier measures to stimulate the Japanese economy, inflation remains low, and production and consumption are falling, which negatively affects export-oriented Japanese manufacturers. Markets usually react noticeably to speeches of the BoJ governor. If he touches on monetary policy during his speech, volatility will rise not only in the yen but also across Asian and global financial markets.
07:00 – EUR: German Retail Sales
Retail sales is the main indicator of consumer spending in Germany. A high indicator reading boosts the euro, while a low one weakens the currency.
Previous values: +1.6 (+2.1), -1.2% (-0.6% YoY), +2.6% (-1.9% YoY), -1.5% (+2.2% YoY), -0.3% (-1.2% YoY) in January 2024.
The data suggests that the German economy’s recovery has been uneven, with some months experiencing a slowdown. Indicator readings higher than forecasted and/or previous values are likely positive for the euro in the short term.
10:00 – EUR: Consumer Price Index. Core Consumer Price Index (Preliminary Release)
The Consumer Price Index (CPI), published by Eurostat, measures the price change of a selected basket of goods and services over a given period. The CPI is a key indicator for evaluating inflation and consumer preferences. A positive indicator result strengthens the euro, while a negative one weakens it.
Previous values YOY: +1.7, +2.2%, +2.6%, +2.5%, +2.6%, +2.4%, +2.4%, +2.6%, +2.8% in January 2024, +2.9%, +2.4%, +2.9%, +4.3%, +5.2%, +5.3%, +5.5%, +6.1%, +6.1%, +7.0%, +6.9%, +8,5%, +8.6% in January 2023, +9.2%, +10.1%, +10.6%, +9.9%, +9.1%, +8.9%, +8.6%, +8.1%, +7.4%, +7.4%, +5.9%, +5.1% in January 2022.
If the data is worse than the forecasted value, the euro may face a short-term but sharp decline. Conversely, if the data surpasses the forecast and/or the previous value, it could strengthen the euro in the short term. The ECB’s consumer inflation target is just below 2.0%, and the reading suggests that inflation in the eurozone is still high, although the pace of increase is slowing down.
According to an accompanying statement following the ECB’s October meeting, when its leaders decided to cut the benchmark interest rate by 25 basis points, the regulator stated that the disinflation process is underway.
The Core Consumer Price Index (Core CPI) determines the price change of a selected basket of goods and services over a given period and is a key indicator for assessing inflation and consumer preference. Food and energy are excluded from this indicator in order to provide a more accurate assessment. A high result strengthens the euro, while a low one weakens it.
Previous values YOY: +2.7, +2.8, +2.9%, +2.9%, +2.9%, +2.7%, +2.9%, +3.1%, +3.3% in January 2024, +3.4%, +3.6% +4.2%, +4.5%, +5.3%, +5.5%, +5.5%, +5.3%, +5.3%, +5.6%, +5.7%, +5.6%, +5.3%, +5.2%, +5.0%, +5.0%, +4.8%, +4.3%, +4.0%, +3.7%, +3.8%, +3.5%, +3.0%, +2.7%, +2.3% in January 2022.
If the October 2024 index figures are weaker than the previous or forecasted value, the euro may be negatively affected. If the data turns out to be better than the forecasted or previous value, the currency will likely grow.
According to recently reported data, the eurozone’s inflation rate is still high, above the ECB’s target of 2.0%. As a result, the ECB is inclined to maintain high interest rates, which is favorable for the euro in normal economic conditions.
12:30 – USD: Core Personal Consumption Expenditures. Jobless Claims
Personal Consumption Expenditures (PCE) data reflect the average amount of money consumers spend per month on durable goods, consumer goods, and services. The core PCE price index excludes food and energy prices. The annual core PCE is the main inflation gauge used by the US Fed as the primary inflation indicator.
The inflation rate, along with the labor market and GDP data, is crucial for the Fed in determining its monetary policy. Growing prices exert pressure on the central bank to tighten its policy and raise interest rates.
The PCE data above the forecasted and/or previous values may boost the US dollar, while a decline in the reading will likely exert a negative impact on the greenback.
Previous values YOY: +2.7, +2.6%, +2.6%, +2.6%, +2.8%, +2.8%, +2.8%, +2.9% in January 2024, +2.9%, +3.2%, +3.5%, +3.7%, +3.8%, +4.3%, +4.3% +4.7%, +4.8%, +4.8%, +4.7%, +4.7%, +4.6%, +4.8%, +5.1%, +5.2%, +4.9%, +4.7%, +4.8%, +4.7%, +4.9%, +5.2%, +5.3%, +5.2% in January 2022.
At the same time, the US Department of Labor will publish a weekly report on the US labor market with data on the number of initial and continuing jobless claims. The labor market condition, along with GDP and inflation data, play a vital role in the Federal Reserve’s decision-making process regarding monetary policy.
Higher-than-expected indicator readings and a rise in its values indicate weakness in the labor market, which could put pressure on the US dollar. Conversely, the indicator decline and its low values demonstrate labor market recovery and may positively impact the currency in the short term.
Initial and continuing jobless claims are expected to remain at the low levels seen before the outbreak of the coronavirus pandemic. This bodes well for the US dollar, signaling stability in the US labor market.
- Previous initial jobless claims weekly values: 241k, 260k, 225k, 219k, 222k, 231k, 228k, 232k, 233k, 228k, 234k, 250k, 235k, 243k, 223k, 239k, 234k, 238k, 243k;
- Previous continuing jobless claims weekly values: 1,867k, 1,858k, 1,819k, 1,827k, 1,821k, 1,843k, 1,845k, 1,860k, 1,855k, 1,859k, 1,871k, 1,869k, 1,844k, 1,860k, 1,847k, 1,856k.
Friday, November 1
Catholic countries in Europe celebrate All Saints’ Day. Banks in these countries will be closed. Trading volumes during the European trading session will also be lower than usual.
01:45 – CNY: Caixin China General Manufacturing PMI
The Caixin Purchasing Managers’ Index (PMI) is a leading indicator of China’s manufacturing sector. As the world’s second-largest economy, China’s release of significant macroeconomic data may strongly influence the financial market.
Previous values: 49.3, 50.4, 49.8, 51.8, 51.7, 51.4, 51.1, 50.9, 50.8, 50.8, 50.7, 49.5, 50.6, 51.0, 49.2, 50.5, 50.9, 49.5, 50.0, 51.6, 49.2 in January 2023.
A decline in the indicator value and reading below 50 may negatively affect the renminbi, as well as commodity currencies such as the New Zealand and Australian dollar. Data that exceeds forecasted or previous values will have a positive impact on these currencies.
07:30 – CHF: Consumer Price Index
The Consumer Price Index (CPI) reflects the retail price trends for a group of goods and services comprising the consumer basket. The CPI is a key gauge of inflation. Additionally, the index has a significant impact on the value of the Swiss franc.
In September, consumer inflation gained +0.8% YoY but declined -0.3 after 0% (+1.1 in August), -0.2% (+1.3% YoY) in July, 0% (+1.3% YoY) in June, +0.3% (+1.4% YoY) in May, +0.3% (+1.4% YoY) in April, 0% (+1.2% YoY) in February, +0.2% (+1.3% YoY) January 2024, +1.7% in December 2023, +1.4% in November, and +1.7% YoY in October.
An index reading below the forecasted or previous value may weaken the Swiss franc, as low inflation will force the Swiss Central Bank to ease its monetary policy. Conversely, a high reading would be positive for the Swiss franc.
12:30 – USD: Average Hourly Earnings. Private Nonfarm Payrolls. Unemployment Rate
The most significant US labor market indicators for October.
Previous values: +0.4% in September and August, +0.2% in July, +0.3% in June, +0.4% in May, +0.2% in April, +0.3% in March, +0.1% in February, +0.6% in January 2024, +0.4% in December and November 2023, +0.2% in October, September, and August, +0.4% in July and June, +0.3% in May, +0.5% in April, +0.3% in March, +0.2% in February, +0.3% in January 2023 / +254k in September, +142k in August,+114k in July, +179k in June, 216k in May, +108k in April, +310k in March, +236k in February, +256k in January 2024, +290k in December 2023, +182k in November, +165k in October, +246k in September, +210k in August 2023, +210k in August 2023 / 4.1% in September, 4.2% in August, 4.3% in July, 4.1% in June, 4.0% in May, 3.9% in April, 3.8% in March, 3.9% in February, 3.7% in January 2024, December and November 2023, 3.9% in October, 3.8% in September and August, 3.5% in July, 3.6% in June, 3.7% in May, 3.4% in April, 3.5% in March, 3.6% in February, 3.4% in January 2023.
Overall, the values are positive. Nevertheless, it is often difficult to predict the market’s reaction to the data release, given that many previous figures can be revised. This task becomes even more challenging now due to the contradictory economic situation in the US and many other large economies with the looming risk of recession alongside persistently high inflation.
Regardless, the release of the US labor market data is anticipated to prompt increased volatility not just in the US dollar but also in the entire financial market. Most risk-averse investors will probably prefer to stay out of the market during this period.
14:00 – USD: US ISM Manufacturing Purchasing Managers’ Index
The US PMI published by the Institute for Supply Management (ISM) is an important measure of the US economy. When the index surpasses 50, it bolsters the US dollar, whereas readings below 50 have a detrimental effect on the greenback.
Previous values: 47.2, 47.2, 46.8, 48.5, 48.7, 49.2, 50.3, 47.8, 49.1 in January 2024, 47.4 in December, 46.7 in November, 46.7 in October, 49.0 in September, 47.6 in August, 46.4 in July, 46.0 in June, 46.9 in May, 47.1 in April, 46.3 in March, 47.7 in February, 47.4 in January 2023.
The index reading is again below the 50 level, indicating a slowdown in this sector of the US economy. The growth of index values supports the dollar. Conversely, if the index reading falls below the forecasted values or below 50, the US dollar may sharply depreciate in the short term.
Price chart of USDJPY in real time mode
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