The US dollar continues to dominate the market, partly due to reduced expectations of new aggressive interest rate cuts by the US Fed.
The upcoming week, 21.10.2024 – 27.10.2024, will have fewer significant economic events compared to the previous week. However, market participants will monitor the statements from major world central banks at the IMF meeting, as well as the release of German, eurozone, UK, and US PMIs and other important macro statistics on the US and Japan. Additionally, the outcomes of the Chinese and Canadian central bank meetings will be expected.
Note: During the coming week, new events may be added to the calendar, and / or some scheduled events may be cancelled. GMT time
The article covers the following subjects:
Key facts
- Monday: People’s Bank of China interest rate decision.
- Tuesday: no important macro statistics is scheduled.
- Wednesday: Bank of Canada interest rate decision.
- Thursday: PMIs of Germany, the eurozone, the UK, and the US.
- Friday: US Durable and non-defense capital goods orders.
- Key event of the week: Bank of Canada interest rate decision.
Monday, October 21
There are no important macro statistics scheduled to be released.
01:15 – CNY: People’s Bank of China Interest Rate Decision
Since May 2012, the People’s Bank of China has been steadily lowering its interest rate to support Chinese manufacturers. Last time, the bank lowered the rate in July 2024 after a long pause since August 2023, bringing the rate down by 0.1% to its current level of 3.35%.
In 2024, the world’s major central banks have also started a policy easing cycle amid slowing inflation. What will the Chinese central bank do this time after pausing since September 2023 and easing policy in July 2024?
The People’s Bank of China will likely keep the interest rate unchanged at 3.35% at this meeting, although other decisions are also possible.
Should the People’s Bank of China make statements that deviate from expectations, volatility may increase across the entire financial market, particularly in the Asian one. Investors will closely watch the bank’s assessment of the Chinese economy’s prospects and its policy stance in the short term.
Tuesday, October 22
There are no important macro statistics scheduled to be released. However, pay attention to the Bank of England Governor Andrew Bailey’s speech.
13:25 – GBP: Bank of England Governor’s Speech
Market participants are waiting for Andrew Bailey to clarify the situation regarding the future policy of the UK central bank. Typically, during the speech of the Bank of England governor, the British pound and the FTSE index of the London Stock Exchange face a significant spike in volatility, especially if there are any indications regarding monetary policy tightening or easing. Andrew Bailey will likely explain the Bank of England’s interest rate decision and discuss the UK economy’s health and prospects against the backdrop of high energy prices and inflation. If Bailey does not mention monetary policy issues, the reaction to his speech will be weak.
Wednesday, October 23
13:45 – CAD: Bank of Canada Interest Rate Decision and Accompanying Statement
At its 2022 and 2023 meetings, the Bank of Canada raised its interest rate and advocated for further increases. Since its September 2023 meeting, Canadian policymakers have held the interest rate at 5.00%, assuming that uncertainty caused by high geopolitical tensions around the world and slowing Chinese, American, and European economies will be accompanied by lower demand for oil. As oil is Canada’s primary export commodity, this situation may weaken its economic growth while grappling with high inflation.
However, at the June 05, 2024 meeting, the Bank of Canada reduced the interest rate by 0.25% to 4.75% and then to the current 4.25%. The central bank’s upcoming decision remains uncertain. The regulator may also take a pause at Wednesday’s meeting.
If the Bank of Canada’s accompanying statement regarding growing inflation and the prospects for further monetary policy signals further tightening, the Canadian dollar will strengthen. Conversely, if the regulator signals the need for a monetary policy easing, the Canadian currency will decline.
14:30 – CAD: Bank of Canada Press Conference
During the press conference, Bank of Canada Governor Tiff Macklem will provide an overview of the bank’s position and assess the current economic situation in the country. If the tone of his speech is tough regarding the Bank of Canada’s monetary policy, the Canadian dollar will strengthen. If Tiff Macklem is in favor of maintaining a soft monetary policy, the Canadian currency will decline. Anyway, the Canadian dollar is expected to be highly volatile during his speech.
17:00 – NZD: Governor of the Reserve Bank of New Zealand Adrian Orr Speech
The Reserve Bank of New Zealand Governor’s speeches often provide insights into the future direction of the central bank’s monetary policy. If RBNZ Governor Adrian Orr signals the bank’s intention to conduct a soft monetary policy, the pressure on the New Zealand dollar will likely increase. Conversely, the tough rhetoric of his statements will support the New Zealand currency.
20:30 – GBP: Bank of England Governor’s Speech
Market participants will focus on Andrew Bailey’s commentaries on the UK central bank’s monetary policy after the release of data on retail sales, producer and consumer prices, as well as the report on inflation and unemployment rate. During the speech of the Bank of England governor, the British pound and the FTSE index of the London Stock Exchange are expected to face a significant spike in volatility.
Thursday, October 24
07:30 – EUR: Manufacturing and Services Purchasing Managers’ Index of the German Economy by S&P Global. Composite Purchasing Managers’ Index of the German Economy by S&P Global (Preliminary Release)
The manufacturing and services PMIs are important indicators of the business environment and the health of the German economy. These sectors play a significant role in Germany’s GDP. A reading above 50 indicates a positive outlook and bolsters the euro, while a reading below 50 is negative for the euro. Conversely, data worse than the forecasted and/or the previous value will prove to be negative for the euro.
Previous values:
- Manufacturing PMI: 40.6, 42.4, 43.2, 43.5, 45.4, 42.5, 41.9, 42.5, 45.5, 43.3, 40.8, 39.6, 38.8, 40.6, 43.2, 44.5, 44.7, 46.3, 47.3, 47.1, 46.2, 45.1, 47.8, 49.1, 49.3, 52.0, 54.8, 54.6;
- Services PMI: 50.6, 51.2, 52.5, 53.1, 54.2, 53.2, 50.1, 48.3, 47.7, 45.7, 48.2, 50.3, 52.3, 54.1, 57.2, 56.0, 53.7, 50.9, 50.7, 49.2, 46.1, 46.5, 45.0, 47.7, 49.7, 52.4, 55.0, 57.6, 56.1, 55.8;
- Composite PMI: 47.5, 48.4, 49.1, 50.4, 52.4, 50.6, 47.7, 46.3, 47.0, 47.4, 45.9, 46.4, 48.5, 50.6, 53.9, 54.2, 52.6, 50.7, 49.9, 49.0, 46.3, 45.1, 45.7, 46.9, 48.1, 51.3, 53.7, 54.3, 55.1, 55.6.
08:00 – EUR: Manufacturing and Services Purchasing Managers’ Index. Composite Purchasing Managers’ Index of Eurozone Manufacturing Activity by S&P Global (Preliminary Release)
The eurozone manufacturing and services PMIs are significant indicators of the European economy state. Readings above 50 are positive and strengthen the euro, while readings below 50 are negative for the currency. If the figures are worse than the forecasted and/or the previous value, the euro will be affected negatively.
Previous values:
- Manufacturing PMI: 45.0, 45.8, 45.8, 45.8, 47.3, 45.7, 46.1, 46.5, 46.6, 44.4, 43.1, 47.2, 42.7, 43.4, 44.8, 45.8, 47.3, 48.5, 48.8 in January 2023;
- Services PMI: 51.4, 52.9, 51.9, 52.8, 53.2, 53.3, 51.5, 50.2, 48.4, 48.8, 47.8, 48.7, 50.9, 52.0, 55.1, 56.2, 55.0, 52.7, 50.8 in January 2023;
- Composite PMI: 49.6, 51.0, 50.2, 50.9, 52.2, 51.7, 50.3, 49.2, 47.9, 47.6, 46.5, 47.2, 48.6, 52.8, 54.1, 53.7, 52.0, 50.3, 49.3 in January 2023.
08:30 – GBP: Manufacturing and Services Purchasing Managers’ Index. Composite Purchasing Managers’ Index of the UK Manufacturing Sector by S&P Global (Preliminary Release)
The manufacturing and services PMIs serve as a vital indicator of the UK economy’s health. The services sector employs the majority of the UK’s working-age population and contributes approximately 75% of GDP. Financial services continue to be the most important part of the services sector. If the data is worse than forecast and the previous value, the British pound will likely experience a short-term but sharp decline. If the data exceeds the forecast and the previous value, it will have a positive impact on the currency. At the same time, a PMI reading above 50 is favorable and strengthens the British pound, while a reading below 50 is negative for the currency.
Previous values:
- Manufacturing PMI: 51,5, 52.5, 52.1, 50.9, 51.2, 49.1, 50.3, 47.5, 47.0, 46.2, 44.8, 44.3, 45.3, 46.5, 47.1, 47.8, 47.9, 49.3, 47.0, 45.3, 46.5, 46.2, 48.4;
- Services PMI: 51.4, 53.7, 52.5, 52.1, 52.9, 55.0, 53.1, 53.8, 54.3, 53.4, 49.5, 49.3, 51.5, 53.7, 55.2, 55.9, 52.9, 53.5, 48.7, 49.9, 48.8, 48.8, 50.0, 50.9, 52.6;
- Composite PMI: 49.6, 53.8, 52.8, 52.3, 53.0, 54.1, 52.8, 53.0, 52.9, 52.1, 48.7, 48.5, 50.8, 52.8, 54.0, 54.9, 52.2, 53.1, 48.5 in January 2023.
13:45 – USD: Manufacturing and Services Purchasing Managers’ Index of the US Economy by S&P Global. Composite Purchasing Managers’ Index (Preliminary Release)
The PMIs of the most important US economic sectors, released by S&P Global, are an important gauge of the US economic conditions. A PMI reading above 50 signals bullishness, bolstering the US dollar, whereas a reading below 50 bodes negatively for the greenback.
Previous values:
- Manufacturing PMI: 47.6, 47.9, 49.6, 51.6, 51.3, 50.0, 51.9, 52.2, 50.7, 47.9, 50.0, 49.8, 49.0, 46.3, 48.4, 50.2, 47.3, 46.9, 46.2, 47.7, 50.4, 52.0, 51.5;
- Services PMI: 55.2, 55.7, 55.0, 55.3, 54.8, 51.3, 51.7, 52.3, 52.5, 51.4, 50.6, 50.1, 52.3, 54.4, 54.9, 53.6, 50.6, 46.8, 44.7, 46.2, 47.8, 49.3, 43.7, 47.3, 52.7, 53.4, 55.6;
- Composite PMI: 54.0, 54.6, 54.3, 54.8, 54.5, 51.3, 52.1, 52.5, 52.0, 50.9, 50.7, 50.2, 52.0, 53.2, 54.3, 53.4, 52.3, 50.1, 46.8 in January 2023.
23:30 – JPY: Tokyo Consumer Price Index (CPI). Tokyo Core CPI excluding Food and Energy
The Tokyo Consumer Price Indexes, published by the Statistics Bureau of Japan, gauge the price change of a selected basket of goods and services over a given period. These indexes are key indicators for assessing inflation and consumer preferences.
Previous values YoY:
- Tokyo CPI: +2.2%, +2.6%, 2.2%, +2.3%, +2.2%, +1.8%, +2.6%, +2.5%, +1.8%, +2.4%, +2.6%, +3.3%, +2.8%, +2.9%, +3.2%, +3.2%, +3.2%, +3.5%, +3.3%, + 3.4%, +4.4% in January 2023;
- Tokyo CPI excluding food and energy: +1.6%, +1.6%, +1.5%, +1.8%, +2.2%, +1.8%, +2.9%, +3.1%, +3.3%, +3.5%, +3.6%, +3.8%, +4.0%, +4.0%, +4.0%, +3.8%, +3.9%, +3.8%, +3.4%, +3.1%, +3.0% in January 2023.
An indicator reading weaker than forecast and/or previous values may weaken the yen.
Friday, October 25
12:30 – USD: Durable Goods Orders. Non Defense Goods Orders Excluding Aircraft.
Durable goods are tangible products with an expected lifespan of more than three years, such as cars, computers, household appliances, and aircraft. These goods require significant investment to produce. Durable goods orders data is a leading indicator representing the change in the total value of new orders received by producers. An increase in orders for these goods indicates that manufacturers are ramping up production to meet the demand.
Capital goods are durable items used to produce other goods and services. The current indicator excludes goods manufactured in the defense and aviation sectors of the US economy.
Positive data boost the US dollar, while negative figures adversely affect it. Any indicator deterioration compared to previous and/or forecasted values may also have a detrimental effect on the US dollar quotes, while data surpassing the forecast will positively influence the currency.
- Previous values of the durable goods orders indicator: 0%, +9.8%, -6.9%, +0.1%, +0.6%, +0.8%, +0.7%, -6.9%, -0.3% in December 2023;
- Previous values of the non-defense goods orders excluding aircraft indicator: +0.3%, -0.1%, +0.5%, -0.9%, +0.2%, -0.1%, +0.4%, -0.4%, -0.6% in December 2023.
14:00 – USD: University of Michigan Consumer Sentiment Index (Final Release)
This indicator reflects American consumers’ confidence in the country’s economic development. A high reading indicates economic growth, while a low one points to stagnation. Previous indicator values: 70.1 in September, 67.9 in August, 66.4 in July, 68.2 in June, 69.1 in May, 77.2 in April, 79.4 in March, 76.9 in February, 79.0 in January 2024, 69.7 in December 2023, 61.3 in November, 63.8 in October, 68.1 in September, 69.5 in August, 71.6 in July, 64.4 in June, 59.2 in May, 63,5 in April, 62.0 in March, 67.0 in February, 64.9 in January 2023, 59.7 in December, 56.8 in November, 59.9 in October, 58.6 in September, 58.2 in August, 51.5 in July, 50.0 in June, 58.4 in May, 65.2 in April, 59.4 in March, 62.8 in February, 67.2 in January 2022. An increase in the indicator will strengthen the US dollar, while a decrease will weaken the currency. The data shows that the recovery of this indicator is uneven, which is unfavorable for the greenback. A decline below previous values will likely negatively impact the US dollar in the near term.
The October preliminary estimate stood at 68.9.
Price chart of USDCAD in real time mode
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