⚡ Compared to last week’s sea of red, investors appear a lot more optimistic this week. However, there are several key economic events ahead, which can make adjustments to the market situation.
➡ EU and the UK Manufacturing & Service PMI 🇬🇧🇪🇺
➡ US Consumer Confidence 🇺🇸
➡ ECB Main Refinancing Rate, statement and Rate 🇪🇺
➡ BOJ Monetary Policy Report and Conference 🇯🇵
➡ Core PCE Price Index 🇺🇸
👀 Let’s dive into a weekly review of economic events to improve the trading experience!
The Euro Zone and the UK Manufacturing & Service PMI – Monday, October, 24th
📅 The Euro Zone and the UK Manufacturing & Service PMI will be released from 10:15 to 11:30 (GMT+3) on Monday, October 24.
Purchasing Managers’ Index or PMI is an important economic indicator in the EU and the UK. The index shows trends in both the manufacturing and services sector.
Asset(s) Affected: of $GBP, $EUR, $FTSE100, $DAX and $CAC40 🇬🇧🇪🇺
Why is this event important?
It helps analysts and economists to correctly anticipate changing economic trends in official data series such as gross domestic products (GDP), industrial production, employment, and inflation.
Accordingly, the growth or decline of the index affects the quotations of currencies and stock indices. Therefore, traders and investors should consider the data in their trading strategy.
📈 If PMI in Europe and Britain exceed forecasts and stays above 50, it might be a positive signal for the stock market and national currencies ($EUR and $GBP).
📉 If the PMI in Europe and Britain underperforms forecasts and declines, it could have a negative impact on stocks in the $DAX, $FTSE100 and $CAC40, as well as on national currencies.
The US Consumer Confidence – Tuesday, October, 25th
📅 On Tuesday, October 25, the US Consumer Confidence will be released at 17:00 (GMT+3).
Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity.
Asset(s) Affected: $US Dollar and $US Stocks 🇺🇸
Why is this event important?
When confidence is trending down, consumers save more than they are spending, indicating the economy is in trouble or contracting further. Essentially, the more confident people feel about the stability of their incomes, the more likely they are to maintain or increase their spending patterns.
📈 The strong report may provide additional support to the American currency, as healthy consumer activity provides the Fed with an opportunity to raise the rates aggressively.
📉 A declining indicator could negatively affect the U.S. dollar and the U.S. stock market.
ECB Main Refinancing Rate, statement, and Rate – Thursday, October, 27th
📅 On Thursday, October 27, the ECB Main Refinancing Rate, statement, and Rate will be released at 15:15 – 15:45 (GMT +3).
The refinancing rate and the ECB key rate are the main indicators of monetary policy in the European Union. They depend on inflation and other macroeconomic factors, determining the rate for all participants of the European financial markets.
Asset(s) Affected: $EUR and $Euro Indices 🇪🇺
Why is this event important?
❗ On this day, we can hear the key messages about the subsequent monetary policy, the potential of the key rate increase and the refinancing rate from the European Central Bank (ECB).
BOJ Monetary Policy Report and Conference – Friday, October, 28th
📅 The BOJ Monetary Policy Report and Conference will be held on Friday, October 28.
BOJ Monetary policy is the macroeconomic policy laid down by the Japan central bank. It involves management of money supply and interest rate and is the demand side economic policy used by the government of a country to achieve macroeconomic objectives like inflation, consumption, growth, and liquidity.
Asset(s) Affected: $JPY and $NIKKEI225 🇯🇵
Why is this event important?
At the upcoming BoJ conference, we will learn about the regulator’s upcoming plans to change or maintain the current monetary policy. This is very important for the yen and the Japanese stock market.
❗ Despite inflation trending near eight-year highs, the Bank of Japan has given no indication that it plans to raise interest rates from record lows in the near-term. But further declines in the yen may spark more intervention in currency markets by the government, as seen in late-September.
Core PCE Price Index – Friday, October, 28th
📅 The Core PCE Price Index will be released on Friday, October 28 at 15:30 (GMT+3).
The Core PCE Price Index is defined as personal consumption expenditure prices excluding food and energy prices. The core PCE price index measures the prices paid by consumers for goods and services without the volatility caused by movements in food and energy prices to reveal underlying inflation trends.
Asset(s) Affected: $US Dollar and $US Stocks 🇺🇸
Why is this event important?
PCE reveals how much households spend on immediate consumption versus saving for the future. Higher consumption levels translate into greater GDP growth in the short term. On the other hand, a higher savings rate is good for long-term economic health.
❗ A rising Core PCE Price Index also considered as a measure of economic growth: while personal spending stimulates inflationary pressures, it could lead to raise interest rates. A high reading is positive (or Bullish) for the $USD.
That’s it for this week!