Forecasting the upcoming week: When it comes to US inflation, size matters

The US Dollar (USD) maintained its bullish momentum in place for the second consecutive week, regaining strong upside traction in the second half of the week after investors seem to have digested the results from the US midterm elections, which saw a clear win for the Democrat party. Meanwhile, the Greenback’s recovery came in contrast to the weekly retracement from US Treasury yields across the curve and the marked decline in crude oil prices, the latter encouraged by the hopes of a probable end to the Middle East conflict.

The US Dollar Index (DXY) traded with solid gains, reclaiming the 102.00 barrier and beyond toward the end of the week, helped by the stronger-than-estimated US Nonfarm Payrolls in October. The NY Fed Consumer Inflation Expectations will kickstart the domestic docket on November 9, followed by Wholesale Inventories. On November 10 will come the NFIB Business Optimism Index ahead of the ADP Employment Change Weekly, the Inflation Rate, and the API’s weekly report on US crude oil inventories. The usual MBA Mortgage Applications are due on November 11. The usual weekly Initial Jobless Claims are expected on November 12, alongside Existing Home Sales and the EIA’s weekly report on US crude oil stockpiles. The Producer Prices data will close the calendar on November 13.

A poor performance saw EUR/USD retrace the initial move past 1.1270, just to give away more than a cent later and close the week around Monday’s opening well below 1.1200 the figure. Germany’s Balance of Trade results are due on November 9. On November 11 will come the final Inflation Rate in Germany. The EMU’s Balance of Trade results are due on November 13, seconded by the advanced Q3 Employment Change and the second estimate of the Q3 GDP Growth Rate in the bloc.

GBP/USD seems to have hit a wall around 1.3500, ending the week in the red  in the sub-1.3400 region following three consecutive advances. The BRC Retail Sales Monitor is due on November 10. The RICS House Price Balance comes on November 12, along with the preliminary Q3 GDP Growth Rate, flash quarterly Business Investment figures, Balance of Trade results, Construction Orders/Output, Industrial/Manufacturing Production and the NIESR Monthly GDP Tracker.

USD/JPY built on the previous week’s advance, regaining the upper hand and reclaiming the 158.00 hurdle and beyond. The preliminary Coincident and Leading Economic indexes come on November 9, while Household Spending data, Current Account results, Bank Lending readings and the Eco Watchers Survey are all expected on November 10. The Reuters Tankan Index will be released on November 11 alongside Machine Tool Orders. The weekly Foreign Bond Investment figures are due on November 12, followed by Producer Prices.

AUD/USD had a dreadful week, retreating to levels last seen in late March around 0.6850 and adding to the previous week’s retracement. The final Building Permits and Private House Approvals will start the Australian docket on November 9. The Westpac Consumer Confidence gauge and the NAB Business Confidence are due on November 10. On November 11 will come quarterly Home Loans data and Investment Lending for Homes, while Consumer Inflation Expectations by the Melbourne Institute will be published on November 12.

Anticipating economic perspectives: Voices on the horizon

• The BoE’s Bailey speaks on November 9, followed by the Fed’s Goolsbee, Barkin and Bowman.
• The ECB’s Cipollone speaks on November 10 along with the Fed’s Waller, Logan, Bowman and Schmid.
• The Fed’s Bowman speaks on November 11.
• The BoJ’s Asada is due to speak on November 12, ahead of the Fed’s Hammack, Barr, Goolsbee and Daly.
• The ECB’s Schnabel is due to speak on November 13, seconded by the Fed’s Williams, Daly and Bowman.
• The Fed’s Jefferson will speak on November 14.

Central banks: Upcoming meetings to shape monetary policies

• The BoJ Summary of Opinions is due on November 10