Currency

The Week Ahead – Monetary Policy, Service Sector PMIs, and U.S Nonfarm Payrolls Key Drivers

On the Macro

It’s a quieter but important week ahead on the economic calendar, with 44 stats in focus in the week ending 8th October. In the week prior, 65 stats had also been in focus.

For the Dollar:

Factory orders and ISM Non-Manufacturing PMIs will be in focus early in the week. Expect the all-important Non-Manufacturing ISM PMI to be the key driver.

On Wednesday, ADP nonfarm employment change figures will draw interest ahead of weekly jobless claims on Thursday.

Nonfarm payrolls on Friday will be the key stats of the week, however. Another spike and the markets will consider it to be a green light for the FED to make its first move. In the week ending 1st October, the Dollar Spot Index rose by 0.76% to 94.035.

For the EUR:

It’s a relatively busy week on the economic data front.

Service sector PMIs for Italy and Spain and finalized PMIs for France, Germany and the Eurozone are due out on Tuesday.

Barring marked revisions to prelim figures, expect the Eurozone’s services and composite to be key.

Through the remainder of the week, the German economy will be in the spotlight.

Factory orders, industrial production, and trade data are due out Wednesday through Friday.

Retail sales figures for the Eurozone due out on Wednesday should have a muted impact on the majors, however.

For the week, the EUR slid by 1.06% to $1.1596.

For the Pound:

It’s a relatively quiet week ahead on the economic calendar.

Key stats include finalized September service sector PMI numbers due out on Tuesday. Labor productivity figures for Q2 are also due out but should have a muted impact on the Pound.

The Pound ended the week down by 0.96% to $1.3546.

For the Loonie:

It’s a busier week ahead on the economic calendar.

Trada data and Ivey PMI figures will be in focus on Tuesday and Thursday.

Employment numbers due out on Friday will be the key stats of the week, however.

On the oil front, expect updates from OPEC’s meeting in the early part of the week to also influence crude oil prices and the Loonie.

The Loonie ended the week up 0.03% to C$1.2648 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week.

Economic data is limited to trade data due out on Tuesday. The stats coincide with the RBA monetary policy decision, which will be the main event of the week, however.

Away from the economic calendar, updates on government plans vis-à-vis lockdown measures will also be key.

The Aussie Dollar ended the week down by 0.06% to $0.7258.

For the Kiwi Dollar:

It’s another quiet week ahead.

Economic data is limited to business confidence figures due out on Tuesday.

Following the RBNZ’s last minute decision to hold cash rates unchanged, however, Wednesday’s monetary policy decision will be key.

With containment measures still in place and economic indicators reflecting the impact of lockdown measures, forward guidance will be key.

The Kiwi Dollar ended the week down by 0.96% to $0.6948.

For the Japanese Yen:

Inflation figures are due out in the first half of the week along with finalized service sector PMI numbers.

Expect any revision to prelim PMI numbers to have a greater impact.

Late in the week, household spending will draw plenty of interest, however.

The Japanese Yen fell by 0.29% to ¥111.05 against the U.S Dollar.

Out of China

It’s a particularly quiet week ahead on the economic calendar.

Economic data is limited to Caixin Service PMI numbers. With little else for the markets to consider, expect the numbers to influence market risk sentiment.

The Chinese Yuan ended the week up by 0.33% to CNY6.4448 against the U.S Dollar.

Geo-Politics

Nothing new to consider in the week ahead, with political wrangling on Capitol Hill grabbing the headlines for now.