The US Dollar (USD) built on the previous week’s gains and advanced to multi-week highs. The strong resurgence of the buying interest in the Greenback gathered extra pace following the cautious tone from Chair Jerome Powell after the Federal Reserve lowered its interest rates by 25 basis points on Wednesday, matching the broad consensus. The US-China trade truce and the subsequent easing of trade tensions also accompanied the move higher in the buck.
The US Dollar Index (DXY) rose for the second consecutive week, trading closer to the psychological 100.00 hurdle, helped by the strong bounce in US Treasury yields across the spectrum. Without any solution in sight to the US federal government shutdown, data releases on the US calendar are expected to remain marginal. The final S&P Global Manufacturing PMI is due on November 3, seconded by the ISM Manufacturing PMI. The RCM/TIPP Economic Optimism Index comes out on November 4, ahead of the API’s weekly report on US crude oil inventories. The usual weekly MBA Mortgage Applications are due on November 5, prior to ADP Employment Change, the final S&P Global Services PMI, the ISM Services PMI, and the EIA’s weekly report on US crude oil stockpiles. The Challenger Job Cuts are expected on November 7, while the flash U-Mich Consumer Sentiment and the New York Fed Consumer Inflation Expectations survey will wrap up the docket on November 8.
EUR/USD performed poorly this week, tumbling to fresh lows at levels last traded in August near the 1.1500 region, adding at the same time to last week’s decline. The final HCOB Manufacturing PMI in Germany and the euro area will be released on November 3. Factory Orders in Germany are due on November 5, seconded by the final HCOB Services PMI in Germany and the Euroland, and Producer Prices in the broader bloc. Germany’s Industrial Production and the HCOB Construction PMI will come on November 6, prior to Retail Sales and the HCOB Construction PMI in the eurozone. Balance of Trade results in Germany are expected on November 7.
Selling orders poured down over the British Pound, motivating GBP/USD to retreat to six-month lows, briefly testing the sub-1.3100 region. The final S&P Global Manufacturing PMI is due on November 3, while the final S&P Global Services PMI is expected on November 5. The S&P Global Construction PMI comes on November 6, ahead of the BoE’s Decision Maker Panel (DMP). The Halifax House Price Index will be published on November 7, seconded by the BBA Mortgage Rate.
Further political effervescence on the Japanese political scenario sparked a severe sell-off in the Japanese Yen, lifting USD/JPY to the vicinity of 154.50 for the first time since February, advancing for the second straight week at the same time. The final S&P Global Manufacturing PMI is due on November 3, while the BoJ Minutes are expected on November 4. Average Cash Earnings, the Reuters Tankan Index and the final S&P Global Services PMI will come on November 5. Household Spending, and the weekly Fireign Bond Investment figures are expected on November 6. The BoJ Summary of Opinions alongside the flash Coincident and Leading Economic Indexes are due on November 7.
AUD/USD clinched its third consecutive week of gains, although a sustainable breakout above the 0.6600 mark remained elusive. Household Spending, Building Permits, Private House Approvals, and Commodity Prices will kickstart the Australian calendar on November 3. The Ai Group Industry Index is expected on November 4, followed by the final S&P Global Manufacturing PMI. On November 6 will come the Balance of Trade results.
Anticipating economic perspectives: Voices on the horizon
- The Fed’s Daly speaks on November 3.
- The ECB’s Lagarde, the BoE’s Breeden, and the Fed’s Bowman will all speak on November 4.
- The ECB’s Nagel and the BoE’s Breeden speak on November 5.
- The Fed’s Paulson, Williams, Hammack and Musalem will speak on November 6 alongside the ECB’s Nagel and the BoE’s Bailey.
- The Fed’s Williams and Jefferson speak on November 7, seconded by the ECB’s Nagel and the BoE’s Pill.
Central banks: Upcoming meetings to shape monetary policies
- The RBA meets on November 4 (3.60% act. vs. 3.60% exp.).
- The Riksbank (1.75% act. vs. 1.75% exp.) meets on November 5, along with the NBP (4.50% act. vs. 4.25% exp.).
- The BNM will decide on rates on November 6 (2.75% act. vs. 2.75% exp.), seconded by the Norges Bank (4.00% act. vs. 4.00% exp.), the BoE (4.00% act. vs. 4.00% exp.), and Banxico (7.50% act. vs. 7.50% exp.).
