After a week of modest gains across the major indices, investors now turn their attention to a series of pivotal economic reports that could shape the market’s next move.
Despite an otherwise calm outlook, these releases — ranging from retail sales in the EU to employment data from the U.S. and Canada — have the potential to set the stage for the Federal Reserve's upcoming decisions. While the bulls may be eyeing new highs for the S&P 500 and a further climb in gold prices, any surprise shifts in the data could lead to a sudden reversal in sentiment and push markets back.
Stay tuned for an action-packed week that could set the tone for Q4!
🇪🇺 Retail Sales m/m — October 7, at 12:00 GMT+3
The week kicks off with the European Retail Sales report, which tracks the monthly change in consumer spending. Retail sales are a key indicator of economic health, reflecting both consumer confidence and the overall direction of the economy.
The forecast points to zero growth this month (0.0%), maintaining the same level as the previous reading, when sales ticked up by 0.1%.
Despite the neutral outlook, a better-than-expected release could spark a positive reaction in the $EURUSD pair, as it would suggest consumers are still willing to spend despite economic uncertainty. Conversely, if the data disappoints, it could amplify concerns of a slowdown, weighing on the Euro and pushing the DAX ($GERMAN30) index lower.
🛢️ EIA Crude Oil Stocks Change — October 9, at 17:30 GMT+3
The U.S. Energy Information Administration’s (EIA) weekly Crude Oil Inventory report provides insight into the balance between supply and demand in the oil market. This time, a draw of -1.448M barrels is expected, following last week’s surprising build of 3.889M.
Crude oil traders will be closely monitoring the data, as a significant drawdown could signal tightening supplies, giving a bullish boost to WTI ($USOUSD) and Brent ($UKOUSD) prices.
On the other hand, if inventories show a smaller draw or even an unexpected build, it may trigger a sell-off in oil markets, easing pressure on prices and leading to potential declines in energy stocks.
🇺🇸 CPI and Core CPI — October 10, at 15:30 GMT+3
The Consumer Price Index (CPI) and Core CPI are crucial indicators that measure changes in the prices of goods and services, excluding volatile items like food and energy. These figures help gauge the pace of inflation and are closely watched by the Fed when setting interest rates. Analysts are forecasting a modest rise of 0.1% in the headline CPI, down from the previous 0.2%.
Meanwhile, Core CPI, which is a better gauge of underlying inflation trends, is expected to increase by 0.4%. A lower-than-expected reading could support the case for further rate cuts, while a higher print might indicate persistent inflationary pressures, complicating the Fed’s path forward. The release could have a pronounced impact on the dollar, stocks, and gold prices.
🇯🇵 Employment Change — October 11, at 15:30 GMT+3
The Canadian Employment Change report measures the change in the number of employed people across the country.
This is a critical indicator of economic strength, influencing the Canadian dollar and often moving the $USDCAD currency pair. The forecast stands at 8.6K, significantly lower than the previous 22.1K, signaling that hiring might be cooling down.
If the data misses expectations, the Canadian dollar could come under pressure, pushing the $USDCAD pair higher. Conversely, a stronger-than-expected reading would suggest resilience in the labor market, possibly leading to a boost for the Loonie and a bearish reaction.
🇺🇸 PPI and Core PPI — October 11, at 15:30 GMT+3
The Producer Price Index (PPI) measures the average change in prices received by domestic producers for their output and serves as a leading indicator for consumer inflation.
Core PPI excludes food and energy, offering a clearer picture of underlying price trends. The PPI is projected to rise by 0.3%, up from last month’s 0.2% increase. If producer prices climb faster than expected, it could signal building inflationary pressures at the production level, making it harder for the Fed to justify further rate cuts.
This would likely strengthen the dollar and weigh on equity markets. Conversely, a softer reading could provide a boost to stocks and signal that inflation remains under control, keeping the door open for more accommodative policy from the Fed.
That's it for this week! 👋
