Forecasting the upcoming week: US midterm elections, Payrolls and BoE in the spotlight

The US Dollar (USD) regained the smile this week, reversing two consecutive pullbacks and trading close to its key 200-week SMA. The Greenback’s recovery has followed the persistent rise in crude oil prices, in a context where a solution to the Middle East crisis appears nowhere to be seen. In addition, the hawkish message from the Federal Reserve at its meeting on October 28 also propped up the buck’s recovery.

The US Dollar Index (DXY) trades with decent gains, ending the week around the 102.00 neighbourhood, a tad lower than the weekly high near 102.50. The final S&P Global Manufacturing PMI will kickstart the domestic calendar on November 2, followed by the ISM Manufacturing PMI and Construction Spending data. On November 3 will come the JOLTS Job Openings, Factory Orders, the RCM/TIPP Economic Optimism Index, and the API’s weekly report on US crude oil inventories, while results from the US Midterm Elections should start turning up. The usual MBA Mortgage Applications are due on November 4, seconded by the ADP Employment Change report, Balance of Trade results, the final S&P Global Services PMI, the ISM Services PMI, and the EIA’s weekly report on US crude oil stockpiles. The usual weekly Initial Jobless Claims are expected on November 5, alongside Challenger Job Cuts. The NFP, Unemployment Rate and the advanced U-Mich Consumer Sentiment gauge will all close the docket on November 6.

EUR/USD added to the previous week’s decline, revisiting the area of 17-month lows near the 1.1100 neighbourhood before staging a temporary bounce just past the 1.1200 mark on Thursday. Germany’s Retail Sales are due on November 2, along with the final S&P Global Manufacturing PMI in Germany and the Euroland. On November 4 will come the final S&P Global Services PMI in the EMU and Germany, followed by the preliminary Inflation Rate in the euro bloc. The S&P Global Construction PMI in Germany and the Eurozone is expected on November 5, seconded by Germany’s Factory Orders and Producer Prices in the bloc. The Industrial Production in Germany is due on November 6 along with the EMU’s Producer Prices.

GBP/USD clinched its third consecutive week of gains, this time managing to reach the 1.3430 zone, or six-week peaks. The final S&P Global Manufacturing PMI is due on November 2, while the final S&P Global Services PMI is expected on November 4. The S&P Global Construction PMI comes on November 5, while the Lloyds House Price Index and the BBA Mortgage Rate will close the UK docket on November 6.

USD/JPY ended the week with decent gains in the low 157.00s, surrendering part of the earlier bull run north of the 158.00 hurdle. The final S&P Global Manufacturing PMI comes on November 2, followed by the Monetary Base figures on November 4. The final S&P Global Services PMI is due on November 5 along with the BoJ Minutes and a 10-Year JGB Auction. On November 6 will come Average Cash Earnings and the weekly Fooreign Bond Investment figures.

AUD/USD advanced marginally this week, enough to extend its recovery and consolidate the break above the 0.7000 threshold. The final S&P Global Manufacturing PMI is due on November 2, seconded by preliminary data from Building Permits and Private House Approvals. The Ai Group Manufacturing Index is due on November 3 alongside the final S&P Global Services PMI. On November 4, the Household Spending prints will be released, while the Balance of Trade results are expected on November 5.

Anticipating economic perspectives: Voices on the horizon

• The Fed’s Goolsbee will speak on November 2.
• The BoC’s Macklem speaks on November 3, seconded by the ECB’s Machado and Donnery.
• The ECB’s Lane will speak on November 4.
• The Fed’s Hammack and Barkin speak on November 5, followed by the ECB’s Lagarde, Schnabel and Lane.
• The Fed’s Logan, Williams, Musalem and Bowman are due to speak on November 6 ahead of the ECB’s Donnery and the BoE’s Pill.

Central banks: Upcoming meetings to shape monetary policies

• The RBA will decide on rates on November 3 (25 bps hike).
• The Riksbank meets on November 4 (25 bps hike) along with the National Bank of Poland (unch).
• The Norges Bank will meet on November 5 (unch), ahead of the BNM (unch), the BoE (25 bps hike) and Banxico (unch).