This week's economic calendar is relatively light on data releases, which means investors will be closely watching companies' quarterly reports. Additionally, speeches from members of the Federal Open Market Committee (FOMC) will be of significant interest. One particular speech that investors are eagerly anticipating is from Federal Reserve Chair Jerome Powell on Thursday. Powell's remarks will provide insights into the state of the economy and the direction of monetary policy.
Here are five key economic events to keep an eye on this week.
🇪🇺 S&P Global Composite PMI
As we ease into a comparatively calm week, all eyes are set on the European economic calendar with the publication of the S&P Global Composite Purchasing Managers' Index (PMI) on Monday, November 6, at 11:00 AM GMT+2. Last month's reading registered at 46.5, dipping below the crucial 50.0 threshold, delineating expansion from contraction. Market participants will closely monitor this release, as any deviation from the previous figure could introduce volatility to assets such as $EURUSD and the $DAX100.
Given the composite PMI's reputation as a significant indicator of economic health — encompassing both the manufacturing and service sectors — this release has the potential to shape market sentiment profoundly.
🇦🇺 RBA Interest Rate Decision
Hot on the heels of the PMI data, market participants will be gearing up for another significant economic event: the Reserve Bank of Australia's (RBA) Interest Rate Decision. This pivotal announcement, scheduled for release on Tuesday, November 7 at 5:30 AM GMT+2, is poised to potentially impact currency pairs such as $AUDUSD and $USDCAD. With the current official cash rate standing at 4.10% — a steep climb from the record low of 0.10% seen in May 2022 — the RBA has been on a rigorous path of monetary tightening to rein in the rampant inflation.
As the market braces for this event, a consensus has emerged among many economists predicting a rate hike of 0.25%. If realized, this adjustment would propel the official cash rate to 4.35%, marking yet another step in the RBA's aggressive rate hike cycle.
🇪🇺 Retail Sales m/m
Shifting focus back to the European markets, the next key event on the economic calendar is the release of the Retail Sales month-over-month data, set to be publicized on Wednesday, November 8, at 12:00 PM GMT+2. The previous reading marked a decrease of 1.2%, reflecting a contraction in consumer spending — a vital indicator of economic health. This time around, while analysts are bracing for another downturn, the anticipated decrease is projected to be marginal, at -0.1%.
As a principal gauge of consumer spending, Retail Sales figures have far-reaching implications for the health of the European economy and, by extension, European equities and the currency market, especially the $EURUSD pair.
🇺🇸 Fed Chair Powell Speech
The financial world will be attentively tuning in for a potentially market-moving event as the Federal Reserve Chair, Jerome Powell, is scheduled to speak twice in the upcoming week — first on Wednesday, November 8, at 16:15 GMT+2, followed by another address on Thursday, November 9, at 21:00 GMT+2. These speeches come into the spotlight, particularly after the Federal Reserve's recent decision to leave the key interest rate unchanged, within the range of 5.25% to 5.5%.
Chair Powell's remarks are highly anticipated as they could provide critical insights into the Federal Reserve's future monetary policy moves. Investors and analysts will dissect Powell's words for hints on the Fed's stance towards inflation, economic growth, and the labor market.
Given the current rate is at a historically high level — the outcome of aggressive rate hikes aimed at tempering inflation — Powell's commentary could influence a wide array of assets, from currency pairs like $EURUSD and $USDJPY to stock indices and bond yields.
🇬🇧 GDP q/q
Wrapping up the week's economic announcements, the United Kingdom will report its quarterly Gross Domestic Product (GDP) figures on Friday, November 10, at 9:00 AM GMT+2. This release holds particular importance as it reflects the health and direction of the UK economy. With the United States observing Veterans Day, trading volumes may be lighter than usual, likely confining any market movements primarily to UK-centric assets such as $GBPUSD and the $FTSE100.
The previous GDP reading came in at a modest 0.2% growth, signaling a slight expansion in economic activity. However, this time, expectations are set for a flat reading of 0.0%, indicating no growth since the last quarter. Such a result would suggest a stagnating UK economy, which could have mixed implications for the markets.
That's it for this week! 👋
