Forecasting the upcoming week: US inflation data and Fedspeak should keep the US economy in the spotlight

An outstanding week for the US Dollar saw the currency leave the recent weakness and reach new two-month peaks on the back of the resurgence of the risk-off mood in response to geopolitical concerns in the Middle East, while Chair Powell’s tilt towards smaller rate cuts and firm data from the US labour market also contributed to the strong advance.

The US Dollar Index (DXY) advanced every day this week, surpassing the 102.00 barrier with certain conviction to print multi-week tops. The NFIB Business Optimism Index is due on October 8, along with the Balance of Trade results and the RCMTIPP Economic Optimism Index. The weekly Mortgage Applications, Wholesale Inventories, the EIA’s report on US crude oil supplies, and the FOMC Minutes will be published on October 9. On October 10, the Inflation Rate takes centre stage, seconded by the usual weekly Initial Jobless Claims. The Producer Prices and the advanced Michigan Consumer Sentiment will close the weekly calendar on October 11.

EUR/USD lost its shine and retreated to seven-week lows near 1.0950 on the back of the pronounced uptick in the US Dollar. Factory Orders in Germany are due on October 7, followed by Retail Sales in the broader EMU. On October 8 will be released Germany’s Industrial Production figures, while the Balance of Trade results are expected on October 9. Retail Sales in Germany and the ECB Accounts are due on October 10, followed by Germany’s final Inflation Rate and Current Account results on October 11.

GBP/USD recorded weekly losses for the first time after three consecutive advances, although it managed to bounce off Friday’s three-week lows in the sub-1.3100 region. The Halifax House Price Index is due on October 7, seconded by the BBA Mortgage Rate. On October 8 comes the BRC Retail Sales Monitor, while the RICS House Price Balance is expected on October 10. Finally, the GDP figures, Goods Trade Balance, Industrial Production, Manufacturing Production, Construction Output, and the NIESR Monthly GDP Tracker will all be released on October 11.

Quite a positive week for USD/JPY, as it reclaimed the 149.00 milestone to hit new two-month tops. The preliminary Coincident Index and Leading Economic Index are due on October 7. Household Spending, Current Account results, and Average Cash Earnings are expected on October 8, while Machine Tools Orders are due on October 9. The weekly Foreign Bond Investment figures are next on tap on October 10, along with Bank Lending, Producer Prices, and the Eco Watchers Survey. The Reuters Tankan Index will close the calendar on October 11.

Sharp gains in the Greenback sparked a reversal in AUD/USD, which set aside three straight weeks of gains despite clocking new 2024 peaks north of the 0.6900 barrier earlier this week. The Inflation Gauge by the Melbourne Institute comes on October 7. The NAB Business Confidence and the RBA Minutes will be released on October 8. The Westpac Consumer Confidence gauge is due on October 9. Lastly, Consumer Inflation Expectations, and the final Building Permits and Private House Approvals are due on October 10.

Anticipating Economic Perspectives: Voices on the Horizon

• The Fed’s Bowman and Kashkari will speak on October 7, along with the ECB’s Cipollone and Lane.
• The Fed’s Bostic, Musalem, Kugler and Collins speak on October 8, seconded by the ECB’s Schnabel and McCaul and the RBA’s Hauser.
• The Fed’s Jefferson, Logan, Barkin, Goolsbee, Collins, and Williams are due to speak on October 9, along with the ECB’s Elderson and the RBA’s Kent.
• The RBA’s Hunter will speak on October 10, followed by the Fed’s Daly and Cook and the ECB’s Nagel.
• The Fed’s Goolsbee, Logan and Bowman speak on October 11.

Central Banks: Upcoming Meetings to Shape Monetary Policies

• The RBI and the RBNZ will meet on October 9.
• The BoK will decide on rates on October 11.