Economics week ahead

Wells Fargo Research Team Wells Fargo

Next week’s U.S. CPI release should show prices rose 0.6% in September, driven by energy, while core inflation remains contained, consistent with a Fed hold in October. September existing home sales likely slipped 1.0%, while retail sales should show resilient but moderating spending. Abroad, we expect monthly U.K. GDP to show above-consensus momentum with a 0.2% gain in August. India’s inflation likely accelerated to 5.65% in September, reinforcing the tightening outlook, while we expect China’s CPI rose to 1.1%, potentially delaying further easing.

U.S. Week ahead

Existing Home Sales • Monday

Rising mortgage rates are weighing on an already weak housing market. Existing home sales slid for a third consecutive month in August, pushing the annualized sales pace below four million for only the eighth time since 2011. Meanwhile, limited supply continues to support home price growth, further eroding affordability.

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Wells Fargo Research Team

Wells Fargo

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.