Monday:
Today’s economic calendar looks rather empty as usual. Investors will be offered some data concerning American income and expenditure produced by the US Bureau of Economic Analysis. On the other hand, Mondelez International (MDLZ.US) will publish its earnings after the final bell. Let us present the tally of the most interesting events this week.
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Open account Try demo Download mobile app Download mobile appOctober has been extremely turbulent on financial markets and the two prime reasons behind that are rising interest rates in the US and Italian concerns in Europe. Macroeconomic readings from both continents will provide a good update and could have a serious impact on the markets. It’s going to be a hot week for the British pound as well as the BoE meeting will be overshadowed by politics.
US NFP report (Friday, 1:30 pm BST)
Concern about monetary tightening is one of the reasons behind a bloody October on the markets and here’s where the NFP report will matter. Investors do realize that the unemployment rate is very low but will it lead to higher wage growth? October data will be very interesting because the “base effect” is lower by 0.5pp compared to September and the market consensus sees just a 0.1pp rise in wages: from 2.8 to 2.9%. A spike in wage growth above 3% could send bond yields higher with ugly consequences for many markets. Affected markets: US500, GOLD.
Flash GDP report in the EMU (Tuesday, 10:00 am BST)
The first important thing in Europe is to see the Italian political leaders taking a more friendly approach to the markets. While we do not expect a major overhaul of the budget, even a discussion with Brussels would help contain market turbulences. A wave of economic uncertainties seems to affect growth and the GDP data for the Q3 will show the extent of the damage. Affected markets: DE30, EURUSD.
Bank of England decision (Thursday, 12:00pm BST), budget and Brexit talks (full week)
Normally the Bank of England decision is seen as the key for the pound but currently it’s clear that monetary authorities need to wait for a conclusion of Brexit negotiations because different outcomes can have dramatic consequences for the UK economy. This might be the key week for the PM Theresa May as she is trying to gain a stronger mandate for talks with Brussels. However, she needs to survive a budget process in the first place. Affected markets: GBPUSD, UK100.
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