This is the last week of the month.
The main market moving events are in the United States, where the big
expectation is that the Federal Reserve will announce the end of Quantitative
Easing (QE). This has been responsible for softening the dollar so its end can
be expected, all other things being equal, to tend to strengthen it. Because the
end of QE has been well signalled, these effects will have been to a large
extent priced in by now.
In the meantime the single most
important counterpart currency to the US dollar, the Euro, is undergoing a
process that approximates to QE, but only in fits and starts, due to the
relatively more fragmented nature of the economies that go to make up the Euro
zone and the tensions that arise, particularly in Germany, whenever inflation
is mentioned (any kind of QE tends to cause inflation to rise).
Expectations
US durable goods orders have been
oscillating recently, due to the way in which certain components, most notable
aircraft sales, have been accounted for. On this occasion a rise of 0.5% is
expected.
Consumer confidence has been on the
up and up in the USA. So much so that it is expected on this occasion to reach
a height that has not been seen for nearly seven years. Last
week’s announcement of an easing in the conditions attached to mortgages
can only increase this measure.
Wednesday sees the FOMC meeting at
which it is expected that the end of QE will be announced. Interest rates will
also be addressed, but no change is expected here. Of more importance will be
the release of the FOMC meeting minutes, for which we must wait for about two
weeks.
Gross Domestic Product, the measure
of economic growth, is always eagerly awaited and this time will be no exception.
The market will be looking for growth that is at or over 3%. Any clear
deviation from that figure will cause movement in the currency.
Initial jobless claims will feed into
the all-important Non-Farm payrolls report which will be released on the first
Friday of November, while the Reuters / Michigan Consumer Sentiment index will
complement the official consumer confidence release, which is approaching a
seven year high, as already mentioned.
No comments:
Post a Comment