Top Things to Watch

This week, the focus will be on the U.S. inflation data for September following a stronger-than-expected jobs report last Friday. The employment figures reassured investors who were starting to doubt the likelihood of a soft landing scenario.

There was a slight market turbulence as the Middle East conflict escalated, but key indicators ended up showing 'buy' signals.

Oil prices increased and hit their largest gains in over a year due to the growing threat of a potential war in the region.

Iran, as a member of OPEC+, produces around 3.2 million barrels per day, which accounts for 3% of global output. However, you should keep in mind that the group's spare production capacity enables other members to increase output if Iranian supplies are disrupted, limiting oil price increases.

For this week, you should keep an eye on:

October 8th

NEW ZEALAND: RBNZ Interest Rate Decision

The Reserve Bank of New Zealand (RBNZ) is expected to follow the FED and cut interest rates by 50 basis points.

Meanwhile, the Reserve Bank of Australia (RBA) will release minutes from its September meeting on Tuesday, with analysts eager for insights on its cautious approach. China and Australia, along with New Zealand, have a historical and vital economic partnership. Australia, a key trading partner for China, supplies essential resources that support China's growth, while China's market offers significant opportunities for Australian businesses. As a result, Australia stands to benefit from China's recent stimulus package. in 2024, as the Chinese economy was facing a stagflation setting, the decline in Chinese demand for iron ore has caused prices to plummet this year, impacting Australia's economy, which relies heavily on iron ore and other commodity exports. As the economic setting begins to shift commodity traders, especially in metals, should monitor price trends closely.

If you are a forex trader you should also monitor NZD and AUD pairs.

October 9th

US: Federal Open Market Committee (FOMC) Meeting Minutes

Investors are eagerly anticipating insights into officials' expectations for future interest rate cuts. Additionally, understanding the factors that influenced policymakers to reach a consensus on the 50 basis points is also valuable information.

Last Friday, as the jobs numbers came out stronger-than-expected, U.S. Treasury yields rose to their highest level since early August as traders abandoned bets that the Fed will cut rates by half a percentage point next month.

Traders now see a roughly 97% probability that the Fed will cut rates by only a quarter percentage point in November, up from roughly 68% on Thursday.

The reaction of U.S. equities confirms that investors are most concerned about economic growth, even when it comes with a hawkish disruption.

October 10th

US: Consumer Price Index (CPI) YoY - September

Inflation data for September is expected to show that price pressures continued to moderate at the end of the third quarter. The data is likely to reassure the Fed that inflation is on a sustainable path back towards its 2% target.

If prices rise faster than expected on top of the stronger labor data, chances for the Fed to skip the November meeting will increase. The "dot plot" released following the September FOMC meeting, showed that nearly half of the participants thought that total cuts of 50-75 bps by year-end would be appropriate, meaning only 0-25 bps of additional cuts this year.

October 11th

US: Producer Price Index (PPI) MoM - September

The PPI is expected to point to tamer inflation, and if these numbers confirm previous day CPI readings, the rate-cutting cycle will follow its path, accordingly.