It should be a quiet start to the week, perhaps with the exception of Crude Oil. The shakeup in Saudi Arabia and the potential escalation with Iran might grab some attention. Conflicts usually intensify when there are economic downturns and with oil prices having fallen below USD 50/bbl for over two years, revenues and trade in the region have decliend significantly and have exposed the lack of proper fiscal management in the region. Keep an eye on this going forward. Interesting week on the data front with influential releases from the US, UK, Australia & Canada, but also with central bank speak.
USD: this week will once again be about tax reform and any details thereof; but also Fedspeak (including the influential CB panel on Tuesday), and inflation, retail sales and industrial production for October. Minor releases are NY Empire State Manufacturing Index and Philadelphia Fed Manufacturing Index.
GBP: inflation, retail sales, unemployment and wages will be under close scrutiny for guidance on Bank of England policy. Cable has been in a range for the past month and a half so logically traders are waiting to see what will break the range. Also watch out for Carney’s speeches (Tue, Thurs).
EUR: Draghi’s speeches on Tuesday and Friday will probably be the highlights of the week. Regarding data, the second GDP estimate and inflation data for October will be released.
CAD: the Loonie will most likely take it’s cue from Crude Oil this week, at least until Canadian Inflation data hits.
AsiaPac: In Japan, markets will focus on Kuroda’s speeches (Mon, Tue). Meanwhile in China, important data to be released include retail sales, industrial output and fixed asset investments. In Australia, key data to watch for will be NAB business confidence, Westpac consumer confidence, employment data and wage price index.
After a dull week, with rangebound moves, the best play in FX is to wait until something inspires some direction. Elsewhere, the clearest thing seems to be Dax & Eurostoxx short bias.
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