Forex - Weekly outlook: 10.15 - 10.19
In terms of events, next week the market will focus on the minutes of the Fed meeting, the EU Brexit summit and the progress of trade disputes.
In terms of economic data, in the US, the new week will be the first to usher in the test of “terrorist data” retail sales. The survey shows that the monthly retail sales rate in September is expected to increase by 0.7%, and the previous value is 0.1%. China will see a lot of heavy data next week, including third quarter GDP, CPI, PPI, industrial added value, fixed asset investment and retail sales. The UK will continue to publish labor market data, CPI and retail sales reports, which have some guidance on the trend of the pound.
In terms of financial and economic events, next week will usher in a series of major events, and European economic data will be covered by two major political risks.
For the trend of the major currency pairs next week, the Dutch International Group (ING) economist wrote an analysis, the article details are as follows:
GBP/USD Next week's bias: bullish Expected next week's trading range: 1.3120-1.3360 One-month target: 1.3400
The pound's rise is good before the EU summit in October next week, because people think the Brexit agreement is expected to be reached.
But it is not surprising if lingering suspicions exist, especially the disappointment of investors in the Salzburg conference in Austria, and the seemingly insignificant but significant British political obstacles still need to be overcome.
We believe that any agreement announced by the UK will need to meet two conditions before it is expected to further push the pound up: First, the agreement needs to get a majority in the British Parliament. Second, the high-level future trade relationship agreement is not linked to any obvious hard Brexit trade agreement.
Any agreement announced next week that meets the above two conditions will allow the market to completely eliminate the risk of no agreement to leave the EU and push the GBP/USD to the 1.34-1.35 level.
However, if the published agreement still raises doubts as to whether it can be passed in the British Parliament, or if there is no major statement next week, there may be a reaction to profit taking or “buy rumors to sell facts” type, GBP/USD or fallback. To 1.3050-1.3100.
In addition, the UK will need to pay attention to a number of important economic data next week. Labor market data (Tuesday), CPI (Wednesday) and retail sales report (Thursday) will be fully announced.
The salary data released next week is expected to perform well, confirming that the shortage of skilled workers is prompting employers to raise salaries to attract/retain talent. The overall CPI is expected to rise, but retail sales may contract from the previous month, as the summer of active consumption is over.
Such mixed results will not affect the overall impact of the pound, and the Brexit agreement is the key driver.
However, if the overall economic data is performing well, the positive Brexit mood may be “double boost” for the next week.
Monday, October 15
Ignazio Angeloni, supervisor of the European Central Bank's Board of Supervisors, Valdis Dombrovskis, vice chairman of the European Commission, and Andrea Enria, president of the European Banking Authority, are the heads of EU banking supervision and oversight bodies. , delivered a speech at the annual meeting of the Single Processing Committee.
German Chancellor Angela Merkel gave a speech at the German Foreign Trade Association Conference.
Tuesday, October 16
APEC Vice Finance Minister and Vice President of the Central Bank (FCBDM).
The Reserve Bank of Australia announced the minutes of the October monetary policy meeting.
Italian Prime Minister Giuseppe Conte spoke in Parliament before the EU summit.
Wednesday, October 17
APEC Finance Ministers Meeting (FMM).
The UK Financial Policy Commission (FPC) announced the minutes of the October 3 meeting.
Bank of England Deputy Governor Jon Cunliffe spoke in Parliament.
Thursday, October 18
The Bank of Japan convened a quarterly meeting of regional branch managers and published a regional economic status analysis report as a basis for monetary policy discussions. Bank of Japan Governor Haruhiko Kuroda will deliver a speech at the beginning of the meeting.
The Euro Group held a summit.
Fed Governor Lael Brainard spoke on financial technology and financial integration.
The Federal Reserve's FOMC announced the minutes of the September 25-26 policy meeting.
The Bank of Korea held a monetary policy meeting and announced interest rate decisions.
Friday, October 19
Randal Quarles, vice chairman of the Fed's financial regulator, gave a speech at the New York Economic Club Luncheon.
The State Council Information Office held a press conference and invited the spokesperson of the National Bureau of Statistics to introduce the operation of the national economy in September 2018 and answered questions from reporters.
Bank of Japan Governor Haruhiko Kuroda delivered a short speech at the Japan Trust Bank Association meeting.
The Bank of Italy announced its quarterly economic report.
Bank of England Governor Mark Carney gave a speech at the New York Economic Club.