Review of the main events of the Forex economic calendar for the next trading week (10.10.2022 – 16.10.2022)
After a serious decline in the last trading week of September, when the DXY dollar index fell almost 2.5% from a new 20-year high of 114.72, the dollar buyers were able to rectify the situation last week. According to its results, the DXY dollar index again went into the green zone and almost completely won back the losses incurred earlier.
By the end of the trading day last Friday, the DXY futures were already trading in close proximity to the 113.00 level.
The dollar received a new bullish impulse from positive macro statistics from the US. In particular, and as follows from the report of the US Department of Labor on the labor market published last Friday, in September, unemployment decreased to the level of 3.5%, average wages increased by +5.0% in annual terms, and the NFPR indicator came out with a value of +263.0 thousand, which, although worse than the August value of +315.0 thousand, is higher than the forecast of growth by +250.0 thousand.
Other macro data also suggests that the US economy will be able to withstand the Fed’s tough policy without sliding into recession.
The next week is likely to be quieter in terms of publications of important macro statistics, and it will begin with public holidays on Monday in Japan, Canada, the US (banks and exchanges in these countries will be closed). However, market participants will carefully study the important macro statistics from the US, UK, Germany, China, which will be published later.
* during the coming week, new events may be added to the calendar and / or some scheduled events may be cancelled.
** GMT time
Monday, October 10
Due to the holiday in Japan, the US, and Canada, banks and exchanges will be closed, which will affect the trading volumes – they will be lower than usual. No important macro statistics is scheduled to be published on this day.
Tuesday, October 11
06:00 GBP Report on the average wages of the British for the last 3 months. Unemployment rate
Every month, the Office for National Statistics (ONS) publishes a report on average wages, including the period for the last 3 months, with and without bonuses.
This report is a key short-term indicator of the dynamics of changes in wages of employees in the UK. Wages growth is a positive factor for the GBP, while the low value of the indicator is negative. Forecast: The October report suggests that the average wages with bonuses rose again in the last reported 3 months (June-August), by +5.9% after growth of +5.5%, +5.2%, +6 .4%, +6.8%, +7.0%, +5.6%, +4.8%, +4.3%, +4.2%, +4.9%, +5.8%, +7.2%, +8.3%, +8.8%, +7.3%, +5.6%, +4.0% in previous periods); wages without bonuses also increased (by +5.3%) after growth by +5.2%, +4.7%, +4.4%, +4.2%, +4.2%, +4.1% , +3.8%, +3.7%, +3.8%, +4.3%, +4.9%, +6.0%, +6.8%, +7.4%, + 6.6%, +5.6%, +4.6% in previous periods). Thus, the data points to the continued growth of wages, which is a positive factor for the pound. If the data turns out to be better than the forecast and / or previous values, the pound is likely to strengthen in the foreign exchange market. Data worse than forecast/previous values will have a negative impact on the pound.
Also at this time the office publishes data on unemployment in the UK. It is expected that for 3 months from June to August, unemployment was at the level of 3.6% (against 3.6%, 3.8%, 3.8%, 3.8%, 3.7%, 3.8%, 3.9%, 4.1%, 4.2%, 4.3%, 4.5%, 4.6%, 4.7%, 4.8%, 4.7%, 4.8%, 4.9%, 5.0%, 5.1%, 5.0% in previous periods).
Since 2012, the UK unemployment rate has steadily declined (from 8.0% in September 2012). This is a positive factor for the pound, the rise in unemployment is a negative factor.
If the data from the UK labor market turns out to be worse than the forecast and / or the previous value, the pound will be under pressure.
In any case, at the time of publication of data from the British labor market volatility is expected to increase in the quotes of the pound and on the London Stock Exchange.
16:00 CHF Speech by the head of the SNB Thomas Jordan
During the speech of SNB Chairman Thomas Jordan, the volatility of CHF trading increases, and traders are waiting for signals regarding the further plans of the SNB monetary policy. Previously, the Swiss central bank has consistently advocated a soft monetary policy in the country. However, now it no longer considers the exchange rate of the national currency to be “overvalued”. Tough rhetoric of Jordan’s speech will help strengthen the franc. The soft tone of the speech and the propensity to continue the extra loose monetary policy of the SNB will have a negative impact on the franc.
Wednesday, October 12
18:00 USD Minutes of the last (September) meeting of the Federal Open Market Committee
The publication of the minutes is extremely important for determining the course of the current policy of the Fed and the prospects for raising interest rates in the US. The volatility of trading in financial markets during the publication of the minutes usually increases, since the text often contains either changes or clarifying details regarding the results of the last FOMC meeting of the Fed.
Following the meeting, which ended on March 15-16, the leaders of the central bank raised the interest rate by 0.25% (for the first time since 2018) and announced their intention to raise interest rates another 6 times in 2022, also allowing for the possibility of a tougher decision. In June, the Fed also began to reduce the size of its balance sheet, and at a meeting on June 14-15 decided to raise interest rates to 1.75%. The current Fed interest rate is 3.25%.
Economists and market participants are now assessing how effective the Fed will be in dealing with inflation, which has reached its highs in the past 40 years.
The soft tone of the minutes will have a positive impact on stock indices and negatively on the US dollar. The tough rhetoric of the Fed leaders regarding the prospects for monetary policy will push the dollar to further growth.
Thursday, October 13
06:00 EUR Harmonized Index of Consumer Prices (HICP) in Germany (final release)
This index is published by the EU Statistics Office and is calculated on the basis of a statistical method agreed between all EU countries. It is an indicator for assessing inflation and is used by the Governing Council of the ECB to assess the level of price stability. A positive result strengthens the EUR, a negative result weakens it.
Previous indicator values: +8.8% in August, +8.5% in July, +8.2% in June, +8.7% in May, +7.8% in April, +7.6% in March, +5.5% in February, +5.1% in January 2022 (annualized). If the September data turns out to be better than the previous values, the euro may strengthen in the short term. The growth of the indicator is a positive factor for the euro. The data suggests mounting inflationary pressures in Germany, which in turn is putting pressure on the ECB to tighten its monetary policy. Data worse than the previous value will have a negative impact on the euro. Forecast: +10.9% in September (preliminary estimate was 10.9%).
12:30 USD Consumer Price Index (ex food and energy)
The Consumer Price Index (CPI) determines the change in prices of a selected basket of goods and services over a given period and is a key indicator for assessing inflation and changing consumer preferences. Food and energy are excluded from this indicator for a more accurate estimate. A high result strengthens the US dollar, while a low result weakens it. In March 2022, the value of the indicator was +0.3% (+6.5% in annual terms), in April +0.6% (+6.2% in annual terms), in June +0.7% (+ 5.9% in annual terms), which indicates an increase in consumer inflation after the index fell in March and April 2020 against the backdrop of the coronavirus pandemic. If the data turns out to be weaker than the forecast, the dollar is likely to react with a short-term decline. Data better than the forecast will strengthen the dollar. Forecast for September: +0.5% and +6.5% (in annual terms), which indicates continued inflationary pressure in the US economy.
Friday, October 14
01:30 CNY Consumer Price Index (CPI)
The National Bureau of Statistics of China will present regular monthly data reflecting the dynamics of consumer prices in China. Rising consumer prices could trigger an acceleration in inflation, which could force the People’s Bank of China to take measures aimed at tightening fiscal policy. Strengthening of consumer inflation may cause appreciation of the yuan, while a low result will put pressure on the yuan.
The Chinese economy, according to various estimates, is already the largest in the world, pushing the US economy to second place. Therefore, the publication of important macroeconomic indicators of this country has a significant impact on world financial markets, primarily on the positions of the yuan, other Asian currencies, the dollar, commodity currencies, as well as Chinese and Asian stock indices. China is the largest buyer of raw materials and a supplier of a wide range of finished products to the world commodity market.
In August 2022, the growth of the consumer inflation index amounted to -0.1% (+2.5% in annual terms)
The deterioration of macroeconomic indicators, including the decline in consumer inflation, may adversely affect the positions of the yuan, as well as commodity currencies such as the Canadian, Australian, New Zealand dollars. To a greater extent, this applies to the Australian dollar, since China is Australia’s largest trade and economic partner.
The growth of the consumer inflation index will have a positive impact on the quotes of the yuan, as well as commodity currencies. However, data worse than expected and the relative decline in the CPI may negatively affect them.
Forecast for September: +0.3% (+2.8% in annual terms).
12:30 USD Retail sales. Retail control group
This report (Retail Sales) reflects the total sales of retailers of all sizes and types. The change in retail sales is the main indicator of consumer spending. The report is a leading indicator and data may be heavily revised in the future. A high result strengthens the US dollar, a low result weakens it. A relative decrease in the indicator may have a short-term negative impact on the dollar, and an increase in the indicator will have a positive effect on the USD. In the previous month (August), the value of the indicator was +0.3% (against 0%, +0.8%, -0.1%, +0.7%, +1.4%, +0.8%, + 4.9% in the previous months of 2022). September forecast: +0%.
Retail sales is the main indicator of consumer spending in the US showing the change in retail sales. The Retail Control Group measures volume across the entire retail industry and is used to calculate price indices for most products. A high result strengthens the US dollar, and vice versa, a weak report weakens the dollar. A slight increase in indicators is unlikely to accelerate the growth of the dollar. The data worse than the previous period (0%, +0.8%, +0.7%, -0.3%, +0.5%, +1.1%, -0.9%, +6.7% in January 2022) may negatively affect the dollar in the short term.
14:00 USD University of Michigan Consumer Confidence Index (preliminary release)
This indicator reflects the confidence of American consumers in the economic development of the country. A high level indicates growth in the economy, while a low level indicates stagnation. Previous values of the indicator: 58.6 in September, 58.2 in August, 51.5 in July, 50.0 in June, 58.4 in May, 65.2 in April, 59.4 in March, 62.8 in February, 67.2 in January 2022. An increase in the indicator will strengthen the USD, and a decrease in the value will weaken the dollar. The data shows uneven recovery of this indicator, which is negative for the USD. Data worse than previous values may have a negative impact on the dollar in the short term. Forecast for October: 58.9.
Price chart of GBPUSD in real time mode
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