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It’s All Eyes on the FED. Will Powell and Team Deliver?

Bob Mason

Earlier in the Day:

It was a relatively busy day on the economic calendar through the Asian session this morning.

September Japan retail sales figures and Australian 3rd quarter inflation figures were in focus through the early part of the day.

Outside of the numbers, market anxiety ahead of the FOMC’s interest rate decision tested risk sentiment early on.

For the Japanese Yen

Retail sales jumped by 9.1% in September, following a 1.8% rise in August, according to the Ministry of Economy, Trade, and Industry. Economists had forecast a 6.9% rise.

The Japanese Yen moved from ¥108.868 to ¥108.870 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.03% to ¥108.86 against the U.S Dollar.

For the Aussie Dollar

Consumer prices rose by 0.5%, quarter-on-quarter, in the 3rd quarter, following a 0.6% rise in the 2nd quarter. Economists had forecast a rise of 0.5%.

The annual rate of inflation picked up in the 3rd quarter, however, rising from 1.6% to 1.7%, which was in line with forecast.

According to the ABS,

  • Supporting prices rises in the 3rd quarter were increases in prices for international holiday, travel and accommodation (+6.1%), tobacco (+3.4%), property rates and charges (+2.5%), and childcare (+2.5%).

  • The most significant falls in the quarter were automotive fuel (-2%), fruit (-3.1%) and vegetables (-2.5%).

The Aussie Dollar moved from $0.68496 to $0.68627 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.01% to $0.6864.

Elsewhere

At the time of writing, the Kiwi Dollar was up by 0.08% to $0.6361.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Key stats due out of the Eurozone include French 3rd quarter GDP numbers and September consumer spending and German October unemployment numbers.

Of less influence on the day will be prelim October inflation numbers out of Spain and Germany.

Following the GfK consumer climate report last week that highlighted rising reports of job losses, we can expect plenty of sensitivity to Germany’s unemployment figures.

Outside of the stats, expect geopolitical risk to continue to influence as the British PM pushes for a December general election to deliver Brexit.

At the time of writing, the EUR was down by 03% to $1.1109.

For the Pound

It’s yet another quiet day ahead on the data front. There are no material stats due out of the UK to provide the Pound with direction.

A lack of stats leaves the Pound in the hands of the UK Parliament through the latter part of the day.

At the time of writing, the Pound was up by 0.02% to $1.2864.

Across the Pond

It’s a busy day ahead on the economic calendar. Key stats include October ADP nonfarm employment change numbers and 3rd quarter GDP numbers.

With the numbers due out ahead of the FOMC monetary policy decision later in the day, we can expect the stats to influence.

The main event will be the FOMC interest rate decision and the release of the rate statement, however.

Expectations are for a 25 basis point rate cut. A hawkish rate cut could well give the Dollar a nudge northwards.

The Dollar Spot Index was up 0.02% to 97.710 at the time of writing.

For the Loonie

It’s a big day on the economic calendar. While there are no material stats due out, the BoC interest rate decision will have a material impact later in the day.

While the markets are expecting the BoC to hold rates steady, forward guidance will be key. The markets will need to slice and dice the monetary policy statement and rate statement ahead of the press conference later in the day.

The Loonie was down by 0.02% to C$1.3090, against the U.S Dollar, at the time of writing.

This article was originally posted on FX Empire

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