The week of 30th September-4th October 2024- Beware October’s Autumnal Winds

October’s Autumnal winds can be scary as any one old enough to remember the violent UK hurricanes in 1987 will attest. This analogy holds true in the financial markets; think back to “Black Monday” (also 1987), the Russian Default in 1998, and the Global Financial Crisis in 2008.

This October marks the one-year anniversary of a horrendous attack in Israel. We also have an escalation of military repercussions by Israel in Lebanon and Yemen, and disturbing rhetoric about Russia’s military nuclear option by President Putin, who also celebrates his birthday on October 7th.?

Markets have been bobbing along. The US Fed duly cut interest rates but the US hasn’t entirely solved its inflation problem. The Bank of England has applied the brakes, The Reserve Bank of Australia is staying resolute and the Bank of Japan is probably on the way to hiking again. And, we are just 6 weeks away from a US election!

This week will be an FX blockbuster as is customary for the first week of the month and indeed the quarter. US data is top of the list and we receive both ISM reports and Chicago PMI as well as three relevant jobs reports, the last of which is US Non-Farm Payrolls on Friday. In Europe, both Germany and the Eurozone announce inflation metrics.

It all started with UK GDP early on Monday which disappointed at 0.7% y.o.y for the second quarter. German CPI is expected at 1.7% y.o.y for September when it is released in the early afternoon. Chicago PMI is likely to remain “unchanged” at 46.1. Fed Chair Powell will speak in the evening!

On Tuesday, the wisdom is that Eurozone inflation is pointing lower and analysts forecast a drop to 1.9% y.o.y for September’s CPI. In the afternoon, hopes are for US ISM Manufacturing PMI to improve to 47.6 from last month’s 47.2. Watch out for the ISM Manufacturing employment Index (a bellwether for NF Payrolls later in the week) and any improvement from last month’s tepid 46.

On Wednesday we receive the US ADP Employment Change; a change higher is forecast with 124,000 new jobs created. On Thursday afternoon US Non-Manufacturing PMI is expected to grind higher to 51.6 for September.

On Friday we await Friday’s US Non-Farm Payrolls. A very benign 144,000 new jobs created is the forecast. Be mindful for revisions from last months 144 and any escalation of average weekly earnings!

Good Luck and Good trading!

Ben Robson?

Ben Robson is Head of Institutional E-FX at Swiss Finance Corporation. He is also the Amazon Best Selling Author of Currency Kings – How Billion traders Made their Fortune Trading Forex. McGraw Hill