Week Ahead: RBNZ, US CPI and Global Data Galore

The week ahead features one key interest rate decision from the Reserve Bank of New Zealand and plenty of important macro data to look forward to for currency traders

The week ahead features one key interest rate decision from the Reserve Bank of New Zealand and plenty of important macro data to look forward to for currency traders, which should provide pockets of elevated volatility – see the calendar highlights, below.

In addition to next week’s key data releases, we will be watching the equity markets closely. With the third quarter reporting season dying down, and the US markets hitting repeated new all-time highs in the face of declining earnings growth, the risks of a correction have been rising by each passing day. Admittedly, optimism over a US-China trade deal has been on the rise and this is what has helped to boost sentiment. But we think that investors will soon run out of reasons to justify buying stocks at these extremely elevated and overbought levels, without a decent pullback. Whether it is Trump, the Fed or trade representatives negotiating a deal, these headline-driven markets are almost entirely dependent on who says what at any given time, as we have witnessed this week. With positive headlines driving the markets upwards, a few negative headlines could undo the rally. So, a correction in the stock markets is a possibility, which means investors should, as always, take care of risk extremely carefully. A sharp retreat in equities, if seen, should help to boost the appeal of safe-haven gold and Japanese yen, among other things.

What’s more, crude oil has risen to a potential turning point in the face of rising US crude stockpiles and weakening demand outlook. The price of crude could retreat after the WTI contract reached the pivotal level of $57.50 this week. If oil turns lower, this could negatively impact oil-linked Canadian dollar and Norwegian Krona.

Here is what’s on the agenda next week:

Monday

  • Japan Core Machinery Orders m/m
  • UK GDP, manufacturing production and construction output
  • US and Canadian banks will be closed in observance of Veterans Day/Remembrance Day

Tuesday

  • UK Average Earnings Index 3m/y
  • German ZEW Economic Sentiment

Wednesday

  • RBNZ a 25-basis point cut to 0.75% expected, especially after this week’s weaker wages data.
  • UK CPI
  • Eurozone industrial production
  • US CPI and Fed Chair Powell’s testimony

Thursday

  • Japan Prelim GDP, Australian employment report, and Chinese industrial production and retail sales
  • German Prelim GDP, Eurozone GDP later
  • UK Retail Sales m/m
  • US PPI

Friday

  • Eurozone trade figures
  • US data dump includes retail sales, Industrial Production and Empire State Manufacturing Index.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.