Forecasting the upcoming week: Back to the real economy and watching Trump

The US Dollar clinched its seventh consecutive week of gains, printing its best week since late September. The extra advance in the Greenback came once again in response to further reassessment of potential policies under the Trump administration as well as further signs of an incipient cautious approach by the Fed to extra interest rate cuts.

The US Dollar Index (DXY) surpassed the key 107.00 barrier this week, reaching new yearly highs as market participants continued to flock behind the “Trump trade”. The NAHB Housing Market Index is next on tap on November 18, followed by Net Long-term TIC Flows and Overall Net Capital Flows. Building Permits and Housing Starts, as well as the API’s weekly report on US crude oil inventories, are expected on November 19. The usual weekly Mortgage Applications, and the API’s weekly report on US crude oil stockpiles will be released on November 20. The usual weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, Existing Home Sales, and the CB Leading Index are expected on November 21. The final Michigan Consumer Sentiment is due on November 22, seconded by the preliminary S&P Global Manufacturing and Services PMIs.

EUR/USD managed to regain some composure on Friday, although it remained well on the defensive in the past few days, hitting a new 2024 low in the sub-1.0500 region. The EMU Balance of Trade results are due on November 18. The Current Account figures in the euro area will be published on November 19, followed by the final Inflation Rate in the bloc and the flash Labour Cost Index. Germany’s Producer Prices are next on November 20, followed by the EMU’s Construction Output, the Negotiated Wage Growth, and the ECB’s Financial Stability Review. The advanced Consumer Confidence print will come on November 21. The final Q3 GDP Growth Rate in Germany is due on November 22 prior to the advanced HCOB Manufacturing and Services PMIs in Germany and the euro zone.

GBP/USD retreated for the seventh straight week and challenged the 1.2600 support for the first time since late June. The UK’s Inflation Rate takes centre stage on November 19, seconded by Public Sector Net Borrowing figures and the CBI Industrial Trends Orders on November 20. The UK’s Consumer Confidence gauged by GfK comes on November 22, along with Retail Sales, and the advanced S&P Global Manufacturing and Services PMIs.

Comments from BoJ officials have sparked fresh “jawboning,” causing USD/JPY to pull back, erasing part of its weekly gains and dropping to three-day lows around the 154.00 level. Machinery Orders will kick off the weekly calendar on November 18. The Balance of Trade results will come on November 20, followed by the weekly Foreign Bond Investment figures on November 21. The key Inflation Rate in Japan will close the weekly docket on November 22, followed by the advanced Jibun Bank Manufacturing and Services PMIs.

After five daily drops in a row, AUD/USD regained the smile on Friday, although this could not prevent the pair from closing in the area of three-month lows well south of 0.6500 the figure. On November 19, the RBA will publish its Minutes of the November 5 meeting. On November 20, Westpac will release its Leading Index, while the preliminary Judo Bank Manufacturing and Services PMIs are due on November 21.  

Anticipating Economic Perspectives: Voices on the Horizon

• The RBA’s Kent speaks on November 18, ahead of the ECB’s De Guindos, Lane, Buch, and Lagarde, the BoE’s Greene, and the Fed’s Goolsbee.
• The ECB’s Elderson speaks on November 19.
• The ECB’s Lagarde and De Guindos will speak on November 20, along with the BoE’s Ramsden.
• The RBA’s Bullock is due to speak on November 21, followed by the ECB’s Cipollone, Buch, Elderson, and Lane, the Fed’s Goolsbee and Hammack, and the BoE’s Mann.
• The ECB’s Lagarde, De Guindos, Tuominen, Nagel, and Schnabel will are due to speak on November 22.

Central Banks: Upcoming Meetings to Shape Monetary Policies

• The Hungarian central bank (MNB) will meet on November 19.
• The Bank Indonesia (BI) will decide on rates on November 20.
• The SARB and the CBRT will hold their meetings on November 21.