Weekly Outlook: November 5 - 9
This week the U.S. mid-term elections and the Federal Reserve’s November meeting will be the main events in focus as markets continue to digest Friday’s strong U.S. employment report.
Voters on Tuesday will decide key races in Congress and state governments and the results could influence the Trump administrations ability to pass additional tax and trade reforms.
The Fed will begin its two day meeting on Wednesday, with markets anticipating no change to interest rates ahead of a widely expected rate hike in December.
Investors will also be watching Monday’s non-manufacturing PMI data from the Institute of Supply Management, as well as Thursday’s weekly jobless claims figures and Friday’s report on consumer sentiment.
Outside of the U.S. investors will get an update on the health of the UK economy on Friday, with the latest GDP data.
The dollar was broadly higher against a currency basket on Friday after data showing that U.S. job growth rebounded sharply last month and wage growth accelerated at the fastest pace in more than nine years.
The report indicated that the labor market is continuing to tighten, underlining the case for the Fed to hike interest rates again in December.
The dollar strengthened following the jobs report, with the U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies advancing 0.27% to 96.34. The index hit a 16-month high on Wednesday.
The dollar’s gains were held in check by lingering concerns over trade tensions between the U.S. and China.
The dollar gained ground against the euro and the yen, with EUR/USD slipping 0.17% to 1.1388 and USD/JPY adding on 0.43% to trade at 113.20.
The pound was also weaker against the dollar, with GBP/USD off 0.34% to 1.2968. Sterling still notched up a weekly gain of 1.09% after the Bank of England indicated Thursday that further interest rate hikes could be on the cards if Brexit goes smoothly.
Ahead of the coming week, Investing.com has compiled a list of significant events likely to affect the markets.
Monday, November 5
The UK is to release data on service sector activity.
Bank of Canada Governor Stephen Poloz is to speak at an event in London.
The ISM is to publish data on non-manufacturing activity.
Tuesday, November 6
The Reserve Bank of Australia is to announce its benchmark interest rate and publish a rate statement which outlines economic conditions and the factors affecting the monetary policy decision.
The U.S. mid-term elections will be held.
New Zealand is to release its latest employment report as well as data on inflation expectations.
Wednesday, November 7
The euro zone is to report retail sales figures, while Germany is to produce data on industrial production.
The Reserve Bank of New Zealand is to announce its latest monetary policy decision and hold a press conference.
Thursday, November 8
China is to release trade data.
The U.S. is to publish the weekly report on initial jobless claims.
Later in the day, the Fed is to announce its latest monetary policy decision and publish its rate statement.
Friday, November 9
The UK is to release data on GDP growth and manufacturing production.
The U.S. is to publish figures on producer price inflation and consumer sentiment.
Fed Governor Randal Quarles is to speak at an event in Washington.