James Trescothick

With more than 20 years of experience in financial service industry, James is our Senior Global Strategist and the co-producer and presenter of easyMarkets educational videos. When he is not working on educational programs or preparing webinars, you can find him with the easyMarkets team giving seminars around the world.

Welcome to the weekly outlook starting this Monday 02 October. We’ll be looking at the week’s key economic events on the financial calendar covering Monday to Thursday. It’s a heavy data week ahead with plenty of action across all global markets. Keep an eye also on Friday as key inflation figures are due for the US with Retail Sales and Consumer Price Index.

 

Event: German Trade Balance

Date: Tuesday 10 October 2017 at 06:00 GMT

Markets affected: EUR/USD, EUR/GBP

Trending hashtags: #eur, #trade

 

With a soaring manufacturing sector, Germany’s trade surplus is way above even China or Japan. Last month the figure increased by €19.5 billion and foreign sales are expected to grow 5% over the year against an original estimate of just 1.2%. The Ifo Institute for Economic Research is forecasting that the nation will have the largest trade surplus than any other country around the world. This had led to criticism from the White House and the IMF who would like to see Germany importing more. While local businesses and employees are benefiting from this, Southern European countries, still struggling out of the financial crisis may put Germany at loggerheads with the European Commission.

 

Event: UK Manufacturing Production (August)

Date: Tuesday 10 October 2017 at 08:30 GMT

Markets affected: GBP/USD, EUR/GBP

Trending hashtags: #gbp

 

A number of key trade and industry indicators are out for the UK at the same time on Tuesday. Manufacturing Production at the previous reading came in at 1.9% year on year change and Industrial Production was at 0.4%. The Trade Balance (non-EU) was at GBP -3.84 billion while the Total Trade Balance was -2.872 billion. The UK economy has started feeling the Brexit pinch and the sterling has been taking a beating as a result.

 

Event: UK Inflation Report

Date: Wednesday 11 October 2017

Markets affected: GBP/USD, EUR/GBP

Trending hashtags: #gbp, #inflation

 

The UK has the highest inflation rate amongst the largest, G7, world economies. Inflation increased to 2.9% in August against 2.6% in July making it a four year high for the consumer price index. The UK’s reliance on imports is behind the rise in inflation as consumers have less buying power due to a weaker sterling following the Brexit referendum. GBP is still 10% below its pre-referendum value. As most central banks aim for 2% inflation for sustainable growth, the Bank of England may look to increase interest rates in an effort to support the pound.

  

Event: FOMC Meeting Minutes

Date: Wednesday 11 October 2017 at 18:00 GMT

Markets affected: EUR/USD, USD/JPY

Trending hashtags: #usd, #fomc

 

While no one is expecting any major surprises from the release of the minutes from the FOMC meeting, traders will be on the lookout for further confirmation of an interest rate hike that is expected to come in December.

 

Event: Westpac Consumer Confidence – Australia

Date: Wednesday 11 October 2017 at 23:30 GMT

Markets affected: AUD/USD, AUD/NZD

Trending hashtags: #aud

 

With falling retail sales, economic recovery for Australia still seems further out than some were hoping for. Retail sales in August fell 0.6% where the expectations were for a 0.3% rise. Consumer Confidence last month was at 2.5%, making September the 10th month in a row where the pessimists outweighed the optimists. Even a better employment sector doesn’t seem to be balancing out consumer concerns.

 

Event: ECB Industrial Production (August)

Date: Thursday 12 October 2017 at 10:00 GMT

Markets affected: EUR/USD, EUR/GBP

Trending hashtags: #eur

 

Eurostat will be releasing Industrial Production figures for August in the Eurozone. Last month the annualised change was 3.2% with a monthly change of 0.1%. An increase in industrial production points to higher inflation which may mean more confirmation for the ECB’s plans to ease Quantitative Easing measures and this may be good news for euro bulls.

 

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