Light economic calendar for the week ahead

Aaron Hill FP Markets

Stepping into the first full week of November, the economic calendar is a little more on the quieter side this week.

RBA to increase the official cash rate?

The Reserve Bank of Australia (RBA) is the highlight event on Tuesday at 3:30 am GMT. Amid stronger-than-expected CPI inflation and rising house prices, the ASX 30-Day Interbank Cash Rate Futures for the November contract imply that the market is about even ahead of this week’s rate decision. Ultimately, the recent upside surprise in Q3 inflation data is likely sufficient to tip the scales more in favour of a rate increase. The Official Cash Rate stands at 4.10% and has been on hold for four consecutive meetings.

What does this mean for the AUD/USD this week?

The AUD/USD found some legs last week, climbing +2.8% and recording its most significant one-week gain since November 2022. Should a rate increase come to fruition, further outperformance in the currency pair is possible.

Fed Chair Powell scheduled to speak

Several Fed officials are scheduled to speak on Thursday, including Fed Chair Jerome Powell at 7:00 pm GMT. Powell is expected to participate in a panel discussion titled Monetary Challenges in a Global Economy at the Jacques Polak Annual Research Conference in Washington DC. Fed officials speaking at the event could shed light on the recent FOMC decision/guidance and, consequently, elevate volatility across the financial markets.

Additional economic data this week

Preliminary Q3 UK growth numbers are a key release on Friday at 7:00 am GMT, followed by preliminary US UoM consumer sentiment data at 3:00 pm GMT.

UK growth numbers are expected to be soft for Q3. Growth declined -0.6% in July on a month-on-month basis, though rebounded to 0.2% in August. Therefore, aside from a significant recovery in economic activity (doubtful) in September, Q3 GDP might drop into negative territory and weigh on sterling (GBP).

US preliminary UoM consumer sentiment data is expected to fall slightly to 63.6 in November, down from 63.8 in October.

G10 FX (5-day change)

Author

Aaron Hill

FP Markets

After completing his Bachelor’s degree in English and Creative Writing in the UK, and subsequently spending a handful of years teaching English as a foreign language teacher around Asia, Aaron was introduced to financial trading,

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.