FYI: Europe has switched back to normal time from daylight savings time, while the US remains on DST for another week.
1. Themes for the week
– USD will be back in focus this week. The FOMC will most likely stand pat (as the market expects). There is no scheduled press conference but watch the statement for any hints about any potential ‘liftoff’ in December. Aside from the Fed, we’ll also see Q3 GDP, which is expected to fall slightly alongisde ISM manufacturing, which could fall below 50 in either October or November as it has seen weakness recently. We also get the Fed’s preferred measure for the wages (employment cost index, which is expected to rebound) & inflation (PCE, with core expected to increase and headline to remain soft).
– The Euro will continue to be in focus also. Monday we will see the IFO business survey which is expected to weaken, with sentiment possibly affected by the Volkswagen scandal. This might very well add pressure to the already weak Euro. EU & German unemployment figures, instead, are not expected to generate much commotion.
– Risk appetite remains strong, after the message from the ECB gave a boost to pretty much all assets: stocks, credit, peripheral bonds and sovereign bonds. If China also continues to show resilience, the Vix could remain below 20 and allow stocks and Jpy crosses to surge even more…
– Unless the Bank of Japan throws a wrench in the Jpys. The BoJ monetary policy meeting will take centre stage this week, as any near-term easing would catch the market very off guard (hence producing a sizeable reaction in FX space). Even if the BoJ stands pat, but hints at lower inflation or activity, it would be seen as a strong signal of an intention to ease further, given the recent optimism that has been expressed.
– Don’t forget “the Bird”. The RBNZ will also decide what to do/what to say after the recent rally in the Kiwi. No change is expected, so the accompanying rhetoric will make the difference.
2. Charts in line with these Themes
S&P MINI
The post Weekly Game Plan – 25.10.2015 appeared first on www.forextell.com.