Forecasting the upcoming week: Markets’ attention remains on the real economy

Despite closing with modest losses on Friday, the US Dollar had another very positive performance these past days, extending its positive streak for the third straight. Once again, market chatter surrounding the likelihood of a smaller rate cut in November, coupled with geopolitical tensions and robust fundamentals, underpinned the march north in the currency.

The US Dollar Index (DXY) advanced for the third consecutive week, briefly revisiting the key 200-day SMA around 103.80. The CB Leading Index is due on October 21, while the Richmond Fed Manufacturing Index and the API’s report on US crude oil inventories are due on October 22. The usual weekly Mortgage Applications, Existing Home Sales, the EIA’s report on US crude oil supplies, and the Fed Beige Book will all be released on October 23. The Chicago Fed National Activity Index will be published on October 24, followed by the usual weekly Initial Jobless Claims, advanced S&P Global Manufacturing and Services PMIs, and New Home Sales. On October 25 will be published the Durable Goods Orders, the final Michigan Consumer Sentiment, and the weekly US oil rig count by Baker Hughes.

EUR/USD remained well on the defensive, coming in close to the 1.0800 support against the backdrop of its multi-week bearish trend. Germany’s Producer Prices are due on October 21. The flash HCOB Manufacturing and Services PMIs in Germany and the euro area will be revealed on October 24. On October 25 comes the ECB’s Consumer Inflation Expectations and M3 Money Supply, all seconded by the IFO’s Business Climate in Germany.

Despite an auspicious second half of the week, GBP/USD could not help receding for the third week in a row, this time piercing the key support at 1.3000 the figure. The Public Sector Net Borrowing will be next on tap on October 22, while Car Production, the CBI Industrial Trends Orders and the advanced S&P Global Manufacturing and Services PMIs will come on October 24. Closing the weekly docket, GfK’s Consumer Confidence is expected on October 25.

USD/JPY maintained its choppy performance well in place, advancing for the third week in a row and flirting with the key 150.00 barrier. The usual weekly Foreign Bond Investment is due on October 24, along with the preliminary Jibun Bank Manufacturing and Services PMIs. On October 25, the Tokyo inflation figures will take centre stage, followed by the final Coincident Index and Leading Economic Index.

In line with its risk-linked peers, AUD/USD extended its multi-week decline despite a positive performance in the last couple of days. The flash Judo Bank Manufacturing and Services PMIs are due on October 24.

Anticipating Economic Perspectives: Voices on the Horizon

• The RBA’s Hauser and the Fed’s Logan, Kashkari and Schmid are due to speak on October 21.
• The ECB’s Lagarde, Lane, and McCaul will speak on October 22.
• The Fed’s Bowman and Barking speak on October 23, seconded by the ECB’s Lagarde, Lane, and Cipollone.
• The ECB’s Buch, McCaul, and Lane will speak on October 24, along with the Fed’s Hammack.
• The ECB’s McCaul will speak on October 25.

Central Banks: Upcoming Meetings to Shape Monetary Policies

• The Hungarian central bank (NBH) will meet on October 22.
• The BoC will decide on rates on October 23.