The week of 7th-11th October 2024- US inflation data the pick of the week!

I’m often surprised as to the credence given to the US Non-Farm Payrolls data release. It was only in August that the annual Payrolls figure was revised downwards by 818,000 for the year March 2023- March 2024. Then we had a poor number for August followed by all the accompanying logorrhea of doom and despair on financial markets networks and television and then of course a 50-basis point cut in interest rates by the US Federal Reserve. Last week, Payrolls bounced back for September posting 254,000 new jobs created, a revision upwards for August of 157k vs 142k and wage inflation growth of 0.4% for the month.?

It seems like the US economy is bouncing along just fine, and with a fillip of a 50bp interest rate cut, it comes as little surprise that monthly returns for the Nasdaq, S&P 500 and Cathie Wood’s ARKK investment portfolio are 8.76%, 6.34% and 11.93% respectively (as of 4th October close).?

This week, we will return to the inflation question, with data releases from the US and Germany; we receive UK GDP figures, Central Bank minutes from the RBA, FOMC and ECB, interest rate decisions from the RBNZ and the Reserve Bank of India and lastly Canadian employment numbers and a Michigan sentiment gauge.?

Monday is a Chinese holiday. It is also the one-year anniversary of the shocking terrorist attack in Israel. May those who died then and since rest in peace and there be a peaceful resolution to the Middle Eastern situation. Data wise, there is nothing significant of note. Tuesday’s main event is the release of monetary policy minutes from the Reserve Bank of Australia.?

Wednesday morning starts with a Reserve bank of New Zealand interest rate decision. Hopes are for a cut of 50bp to 4.75%. The Reserve Bank of India is next up with analysts expecting unchanged at 6.5%. FOMC minutes in the evening will reveal the Fed’s thinking behind the 50bp cut in September.?

On Thursday the ECB publishes its monetary policy minutes. In the afternoon we receive US CPI figures. Expectations are for Core to fall to 3% y.o.y for September and Headline to 2.3%. Markets could be volatile at this time.?

Friday morning and first up is UK GDP expected at 0% m.o.m for August. German CPI is likely to post 1.6% y.o.y for September. In the afternoon we will learn about US producer prices with analysts forecasting a monthly rise of 0.1% for September. Canada is expected to post 36,000 new jobs with the unemployment rate steady at 6.6%. Michigan Consumer Sentiment wraps up the week and is expected to be little changed at 70.2 for October.?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