Forecasting the upcoming week: FOMC Minutes, Fedspeak… and more US shutdown?

The US Dollar (USD) gave back the gains it had built up in the last couple of weeks, sliding noticeably over the past five days. Still, the Greenback kept to its familiar consolidative pattern, hovering near the lower end of this year’s range. Adding pressure, investor sentiment took another hit as worries over the potential fallout from the US federal government shutdown stayed front and centre.

The US Dollar Index (DXY) ended Friday’s session with decent losses around the 97.70 region in combination with mixed US yields across the curve and persistent uncertainty around the US shutdown. August’s Balance of Trade results are due on October 7, seconded by the RCM/TIPP Economic Optimism Index, Consumer Inflation Expectations tracked by the New York Fed, and the API’s weekly report on US crude oil inventories. The usual weekly MBA Mortgage Applications are due on October 8, prior to the EIA’s weekly report on US crude oil stockpiles and the release of the FOMC Minutes. On October 9 will come the usual weekly Initial Jobless Claims, seconded by Wholesale Inventories, while the advanced U-Mich Consumer Sentiment will wrap up the docket on October 10.

EUR/USD ended its week with decent gains, regaining traction following the previous retracement although keeping the broad-based side-lined theme in place in the upper end of the range. The HCOB Construction PMI in Germany and the eurozone is due on October 6, followed by Retail Sales in the euro bloc. Factory Orders in Germany will be released on October 7, while Industrial Production figures will be out on October 8. Germany’s Balance of Trade results are expected on October 9, while the ECB will publish its Accounts of its September meeting.

GBP/USD managed to regain balance and close the week in an upbeat note, leaving behind two pullbacks in a row. A sustainable break above the 1.3500 barrier, however, remained elusive. The S&P Global Construction PMI and New Car Sales are due on October 6. On October 7 will come the Halifax House Price Index, and the BBA Mortgage Rate. The RICS House Price Balance will be released on October 9.

USD/JPY reversed five consecutive weeks of gains, retreating markedly to the mid-146.00s, where a decent contention seems to have emerged. Household Spending and the preliminary Coinciden Index and Leading Economic Index are due on October 7. Average Cash Earnings will come on October 8, along with Current Account reults, Bank Lending figures, and the Eco Watchers Survey. The weekly Foreign Bond Investment prints are expected on October 9, seconded by the Reuters Tankan Index and Machine Tool Orders. Producer Prices in Japan will close the domestic docket on October 10.

The generalised recovery in the risk complex lent legs to AUD/USD and motivated it to end the week with strong gains around 0.6600 after two declines in a row. The Inflation Gauge tracked by the Melbourne Institute kickstarts the calendar on October 6. The Westpac Consumer Confidence Index is due on October 7, while the final prints of Private House Approvals and Building Permits will come on October 8. The Melbourne Institute’s Consumer Inflation Expectations are expected on October 9.

Anticipating economic perspectives: Voices on the horizon

• The ECB’s Lagarde, De Guindos, and Lane will speak on October 6, along with the BoE’s Bailey.
• The Fed’s Bostic, Bowman, Miran, and Kaashkari are all due to speak on October 7, along with the ECB’s Lagarde.
• The Fed’s Musalem, Barr, and Kashkari will speak on October 8, seconded by the ECB’s Buch, Elderson, Tuominen, and Lagarde, and the BoE’s Pill.
• The Fed’s Powell speaks on October 9, alongside Bowman and Barr, and the ECB’s Lane.
• The Fed’s Goolsbee and Musalem speak on October 10, along with the RBA’s Bullock and Kent.

Central banks: Upcoming meetings to shape monetary policies

• The RBNZ meets on October 8 (3.00% act. vs. 2.75% exp.) alongside the NBP (4.75% act. vs. 4.75% exp.).