Major market moving events for 42nd week of 2015

Author Haresh Menghani Category Fundamental Analysis 12 Oct 2015 Updated at 01:21 CET
Last week, minutes from the Federal Reserve's September policy meeting added to the disappointment from September jobs report, dragging the US Dollar lower against majority of its counterparts. The Fed minutes revealed that concerns over the global economic slowdown forced it to hold raising funds rate in September and now seems ready to hold interest rates lower for longer. Uncertainty over the Fed's decision to start raising interest rates in 2015 led to a second consecutive week of declines for the overall US Dollar Index (I.USDX).
Going forward, economic data from the US namely- monthly retail sales, regional manufacturing indices along with CPI data, will be looked upon for any possibilities of the Fed deciding to start normalizing its monetary policy in 2015. Apart from the US releases, inflation data from other economies and, employment data from UK and Australia has the potential to trigger some volatile moves in the Forex market.
US Economic Releases
The US economic calendar begins with the release of monthly retail sales data, scheduled on Wednesday. Following a lower-than-expected growth for the month of August, economists are expecting a subdued performance to continue in September. Consensus estimates forecast the retail sales to have risen by 0.2% in September, while core retail sales (excluding automobiles sales) are expected to drop further and come-in at negative 0.1%.
This week's key highlight from the US economic calendar would be the latest print on US headline inflation, consumer price inflation (CPI) for the month of September, which is scheduled for release on Thursday. Continuing with its downward trajectory, US inflation in August dropped back into negative territory. Economists are expecting September reading to fall even further and come-in at negative 0.2% on a month-on-month basis. Meanwhile, the Core CPI figure, which excludes volatile food and energy prices, is expected to rise modestly by 0.1%.
Moving on to the US manufacturing data, investors will confront the release of two regional manufacturing indices, namely - Empire State Manufacturing Index and Philly Fed Manufacturing Index for the month of October and industrial production data for the month of September. The Empire State manufacturing index and Philly Fed manufacturing index are scheduled for release on Thursday, while industrial production data is scheduled for release on Friday. During the month of September, both the regional manufacturing indices registered an unexpected sharp decline, indicating that level of activity in the US manufacturing sector might be losing momentum. Although both the indices are expected to rebound in October but still show worsening conditions by printing negative readings. The industrial production too, is expected to have dropped by 0.2% during the month of September.
Also watch-out for preliminary release of the University of Michigan's consumer sentiment index, scheduled for release on Friday. The index reading for the month October is expected to improve to 88.8 from 87.2 recorded in September.

CPI and Employment Data
Apart from the US economic releases, CPI data from UK, China, Euro-zone and New-Zealand accompanied with employment reports from UK and Australia could also provide some meaningful moves in the Forex market.
UK annual CPI reading and monthly employment report, scheduled for release on Tuesday and Wednesday respectively, are likely to trigger substantial volatility for GBP pairs. Inflation data and labor market conditions remains key determinant for Bank of England's monetary policy decision, and hence would be closely scrutinized to determine the timing of a rate hike, if any, by the central bank. The UK inflation, measured by CPI, is expected to remain flat at 0% for September. Meanwhile, the UK labor market report for the month of September is expected to show the number of people claiming unemployment related benefits declining by 2,300 and the unemployment rate holding steady at 5.5%.
Economic data that could materially impact the Australian Dollar (AUD) includes Chinese trade balance and CPI data along with Australian employment reports. The Chinese trade balance data, scheduled for release on Tuesday, is expected to show country's surplus dropping from $60.2 billion in August to $46.9 billion in September. Also Chinese inflation data, scheduled for release on Wednesday, is expected to slow a bit from 2% in August to 1.8% in September. Meanwhile, the Australian employment report, scheduled for release on Thursday, is expected to show the number of new people employed during the month of September to have increased by 7.2 K and unemployment rate to hold steady at 6.2%.
From Euro-zone, the final print on the inflation data for the month of September is scheduled for release on Friday. The final print is unlikely to show any inflationary pressure and is expected to remain in negative territory at -0.1%. Traders will also have a look at the quarterly inflation data from New-Zealand, which is also scheduled for release on Friday. The quarterly inflation print is expected to show a drop in third-quarter and show a small gain of 0.2% as compared to 0.4% recorded in the previous quarter.
Last week, the US Dollar took a beating after the release of minutes from the Fed's September meeting, which was considered to be slightly on the dovish side and was followed by a disappointing September jobs report. A further deterioration on the US economic data front is more likely to convince market participants that the Fed is less likely to raise interest rates in 2015. This would in-turn set the stage for further near-term depreciating move for the greenback.
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