Major market moving events for 43rd week of 2015

Author Haresh Menghani Category Fundamental Analysis 19 Oct 2015 Updated at 12:43 CET
Last week, led by disappointing retail sales the US Dollar (USD) depreciated against most major currencies during the early part of the week. However, the greenback managed to recover from the lows, finding some support from signs of stabilizing consumer prices in September. US monthly retail sales data rose by a disappointing 0.1% in September while core inflation printed better than expected reading. Although the recent US economic releases have firmed expectations of a delay in the Federal Reserve's decision to raise interest rates, expectations of an expansion of the ECB stimulus program continued supporting USD. Nevertheless, the overall US Dollar Index (I.USDX) ended the week with minor losses.
Going forward, with only US housing sector data releases scheduled during the week, central banks’ monetary policy decision announcements, especially by the ECB, and other global PMI releases will play pivotal role in determining this week's move in the Forex market.
US Housing Market Data
Data from the US housing market begins with the release of government reports on building permits and housing starts for the month of September and are scheduled for release on Tuesday. Continuing with the positive trend in the US housing sector, economists expect the building permits to hold steady and come-in at 1.16 million units annualized pace as compared to 1.17 million units prints in August. Housing starts are also expected to nearly match its August reading and print a seasonally adjusted annual rate of 1.14 million units. Also this week's data from the US housing market features the release of existing home sales, scheduled on Thursday. Following a higher than expected drop in the month of August, existing home sales are expected to have rebounded slightly in September to reach 5.38 million units against 5.31 million units in August.
Key Event - ECB Monetary Policy Decision
Moving on to the key event of the Week, the European Central Bank's monetary policy decision announcement on Thursday. General consensus is that the central bank is unlikely to announce any change to its current policy stance; i.e. leave the interest rate at 0.5%, deposit rates at -0.2% and QE at 60 billion Euro/month. However, after downgrading its growth and inflation forecasts during the September meeting, the central bank is expected to maintain its dovish policy stance and could also possibly hints towards further easing in the near-future. Hence, comments from ECB President Mario Draghi, during a subsequent press conference, will be closely scrutinized and might probe some volatile move in the Forex market, especially for Euro pairs.
In addition to the ECB monetary policy decision announcement, investors will also be focusing on the release of the broader Euro-zone manufacturing and services PMI readings, along with readings from Euro-zone's two largest economies, Germany and France. PMI readings for the month of October are scheduled for release on Friday. The composite Euro-zone PMI figure is expected to continue showing expanding business activity in both, manufacturing and services sector, but at a slightly slower pace than that was recorded in the previous month.
BOC and Canadian Releases
Ahead of the key event on Thursday, BoC is also scheduled to announce its monetary policy decision on Wednesday where the central bank is unlikely to announce a change to its current monetary policy stance and leave interest rates unchanged. However, the accompanying monetary policy report (released quarterly) will be looked upon closely for the central bank's outlook on economic conditions that influenced their current decision on interest rates and would might also influence central bank's future monetary policy decisions.
Apart from the central bank monetary policy decision, Canadian monthly retail sales data and inflation data would influence CAD pairs. Report on monthly retail sales is scheduled for release on Thursday while Canadian headline inflation data is scheduled for release on Friday.
RBA Minutes and UK Retail Sales 
In other central bank actions, the Australian central bank (RBA) is scheduled to release the minutes of its latest monetary policy meeting held earlier during the month on Tuesday. After Monday's release of the Chinese GDP, showing nation's economic growth at the slowest pace since 2009, and lower-than-forecast industrial production data, RBA minutes will be looked for the central banks view of the domestic economy and possibilities of any further rate cut in the near-future.
Elsewhere, this week's UK economic calendar features the release of monthly retail sales data for the month of September. The upcoming release of UK retail sales data is scheduled for release on Thursday. Consumer spending, which remains supportive pillar of UK's economic recovery, is expected to show a further improvement by posting a gain of 0.3% on a month-on-month basis, as against a 0.2% growth recorded in August.
Even as this week's economic calendar lacks any major US economic releases, central bank announcements (especially from the ECB) accompanied with other important global releases might continue probing volatile move in the Forex market this week.
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