It was another busy week in financial markets last week, with some key updates from major central banks that included a ‘hawkish cut’ from the Fed, another cut from the Bank of Canada, and ‘holds’ from both the European Central Bank and the Bank of Japan.
Stock markets remained strong despite some mixed earnings reports from some of the biggest companies in the world, while the dollar gained ground after the Fed update.
The U.S. government shutdown and consequent data drought continue into another month tomorrow, and traders who would normally be expecting to see key U.S. jobs numbers in the following days are likely to be disappointed as we progress through the week. Some calendars are still pencilling in releases, although this weekend’s updates from Washington don’t look good for those hoping to see the data.
Consequently, we have left the U.S. numbers off the highlights this week; however, if they do start to be released, there is no doubt that the non-farms and inflation numbers will be a huge focus across the market.
Here is our usual day-by-day breakdown of the major risk events this week:
It is a quiet day to kick off the week, with little on the cards to move the market in the Asian session and, so far, nothing major in terms of geopolitical updates over the weekend. Japanese markets are on holiday, which may affect liquidity; however, traders are expecting a relatively quiet start to the day. Swiss markets will be in focus early in the London session with the key CPI numbers due out. The New York session does see some U.S. data, with ISM Manufacturing and Non-Manufacturing numbers due out, and we also hear from Bank of Canada Governor Tiff Macklem, as well as Fed members Daly and Cook during the session.
Australian markets will be in focus in the Asian session as the RBA again spoils traders’ Melbourne Cup fun and games by announcing the latest cash rate move just half an hour before the big race. The London session sees a couple of updates from ECB President Christine Lagarde, and there is the slight possibility that we may get JOLTS Job Openings numbers once New York opens.
It is New Zealand markets that take centre stage early in the Asian session with key employment numbers due out early in the day. There is nothing major due out for the rest of the session and for the London session as well on Wednesday. The New York session may see the release of the ADP Non-Farms data; however, we will definitely get the ISM Services PMI numbers and Weekly Crude Oil Inventory data later in the day.
It is a quiet Asian session on Thursday with little on the calendar; however, all eyes will be on U.K. markets after the London open with the latest rate call from the Bank of England due out midway through the day. U.S. Weekly Unemployment Claims numbers are still pencilled in, and we will get the Canadian Ivey PMI data. There is a raft of Fed members set to speak during the day as well, including Barr, Williams, Hammack, Waller, Paulson, and Musalem.
Is it non-farms day or not! At the moment, traders are leaning strongly towards the ‘not’ camp; however, if we do get the data, expect extreme volatility around the event. There is little scheduled in either the Asian or London session on Friday, and we will have Canadian employment data close to the New York open, followed by the University of Michigan Preliminary data. However, the jury is still out as to whether we do have the big U.S. employment numbers, with the PCE data also pencilled in on some calendars. If we do, then expect a very busy last session of the week.
