The US dollar almost didn’t change at the end of trade on Friday after a sharp decline on Thursday and amid lack of any significant macrostatistics. Canadian dollar had almost no reaction towards consumer price index data which in general coincided with the forecast. Australian dollar continued growing on the back of Chinese positive GDP and industrial output data. Chinese economic growth at an annual rate accelerated in the 3d quarter, which was recorded for the first time in three quarters.
Be the end of the week the dollar had lost 1.04% according to the dollar index amid the growth of expectations that the Fed would continue stimulus measures for a longer period of time after approving a temporary budget agreement in the USA. The highest growth Vs the dollar was shown by New Zealand dollar (+2.23%), Australian dollar (+2.20%) and British pound (+1.34%). After them go Swiss franc (+1.07%), euro (+1.06%), Japanese yen (+0.81%) and Canadian dollar (+0.62%).
On Wednesday the Congress and the White House came to an agreement which allowed to avoid the US debt default and recover government work after 16 days of shutdown. However, the problem is not solved and the crisis is just put off for three months. The agreement is valid only till January 15 and it means that the budget stalemate can happen in January again –when the debates about the budget and national debt limit increase return. Budget uncertainty will influence Fed decisions and it is unlikely to start QE tapering at October or even December meeting.
This week will be saturated. The US federal institutions started working from Thursday and this week some missed statistics data which haven’t been released for almost three weeks will be published. On Tuesday October, 22 there will be a release of Non-Farm Payrolls, on Wednesday – imports prices and on Thursday - JOLTS Job Openings. Missing Crude Oil Inventories for a week till October 11 will be published on Monday and Natural Gas Storage – on Tuesday.
Inflation data will be published in a week: PPI – on Tuesday, October 29, and CPI – on Wednesday, 30. Labour market report for October is likely to be released a week later – on November 8. The rest statistics data released on November also may be delayed.
Among the USA plan data - on Monday there will be a release of Existing Home Sales (a drop by 3.3% is expected – the lowest monthly decrease since June, 2012) and on Thursday - New Home Sales. On Tuesday - Richmond Manufacturing Index, on Wednesday - FHFA House Price Index, on Thursday - Flash Markit Manufacturing PMI and on Friday – Durable Goods Orders and Revised U. of Michigan Consumer Sentiment.
The main event in the euro-zone will be preliminary manufacturing and service PMI of France, Germany and the whole euro-zone which is released on Thursday; and also IFO Business Climate report on Friday. There is an expectation of index growth which will show euro-zone improving economic state. On Wednesday Flash Euro-Zone Consumer Confidence will be released, and on Friday – retail sales in Italy.
The main event in the UK will be a publication of preliminary GDP for the third quarter on Friday. It is expected that the economic growth rates have gathered pace in the third quarter to 0.8% q/q compared with 0.7% in the second quarter. On Tuesday state finance data will be released, on Wednesday – the Bank of England Meeting Minutes and BBA Mortgage Approvals; on Thursday - CBI Industrial Order Expectations; and on Friday - Index of Services.
Trade balance of Japan will be released on Monday and Consumer Price Index – on Friday. In Australia inflation report for the third quarter and CB Leading Index will be released on Wednesday. In New Zealand trade balance will be released on Wednesday. On Wednesday there will be announced a decision of the Bank of Canada on interest rate, there will be a release of BOC Monetary Policy Report and BOC Press Conference will be held. On Tuesday retail sales in Canada will be released. On Thursday there will be a release of HSBC Flash Manufacturing PMI.Publication source