Week ahead
Week of 19 October: inflation everywhere except the US
The week's scheduled events for forex traders. Canadian inflation on Monday, UK jobs and UK inflation, New Zealand and Japan consumer prices late in the day, flash PMIs on Friday, a Fed in its quiet period, and what each one means under the challenge rules.
Last week was about US inflation. This week the US calendar is light, and the focus moves to inflation elsewhere: Canada on Monday, the UK on Wednesday, New Zealand on Wednesday night and Japan on Thursday night. The Fed meets on 27 and 28 October, and its officials are now in the quiet period before the meeting, so there are no Fed speeches to react to. Below is what is scheduled, what markets expect, and what each event means on a challenge account. This is a calendar, not a forecast: we do not say which way anything will move.
Where the week starts
Friday's close left EUR/USD at about 1.1225, its first weekly gain in six weeks, and the US Dollar Index near 102.00. Gold ended near $4,167 an ounce and Brent at $109.86, its highest settle since May. USD/JPY sat near 158. The US 10-year yield ended the week at about 5.07%.
Markets put the odds of a Fed hike on 28 October at somewhere between about 16% and 30%, depending on the report, and see a hike by December as likely. For the Bank of England, which meets on 5 November, markets price a hike as close to certain.
China opened the week with its third quarter figures early on Monday. GDP grew 4.5% on the year, a little above the 4.4% expected, and industrial production rose 5.5% in September. Retail sales grew only 1.1%.
The calendar
Times are server time (UTC). Previous and consensus figures are from public market reports at the time of writing.
| Day | Time | Event | Previous | Consensus |
|---|---|---|---|---|
| Mon 19 Oct | 12:30 | Canada CPI, September, m/m | −0.1% | 0.2% |
| Mon 19 Oct | 12:30 | Canada CPI, September, y/y | 3.0% | 3.2% |
| Tue 20 Oct | 01:15 | China loan prime rate, 1-year | 3.00% | 3.00% |
| Tue 20 Oct | 06:00 | UK unemployment rate | 4.9% | 4.9% |
| Tue 20 Oct | 06:00 | UK average earnings, 3m/y | 3.9% | 3.8% |
| Wed 21 Oct | 06:00 | UK CPI, September, y/y | 3.1% | 3.4% |
| Wed 21 Oct | 06:00 | UK core CPI, September, y/y | 2.6% | 2.8% |
| Wed 21 Oct | 21:45 | New Zealand CPI, Q3, q/q | 1.5% | 0.8% |
| Thu 22 Oct | 12:30 | US initial jobless claims | 199,000 | - |
| Thu 22 Oct | 23:30 | Japan national core CPI, September, y/y | 1.7% | 2.1% |
| Fri 23 Oct | 06:00 | UK retail sales, September, m/m | 0.5% | −0.2% |
| Fri 23 Oct | 07:30 | Germany flash PMIs, October | - | - |
| Fri 23 Oct | 08:00 | Eurozone flash manufacturing PMI, October | 52.9 | - |
| Fri 23 Oct | 08:00 | Eurozone flash services PMI, October | 53.0 | - |
| Fri 23 Oct | 08:30 | UK flash manufacturing PMI, October | 51.9 | 51.8 |
| Fri 23 Oct | 13:45 | US flash manufacturing PMI, October | 55.9 | - |
| Fri 23 Oct | 13:45 | US flash services PMI, October | 58.8 | - |
The US also has housing starts and building permits on Tuesday and the final University of Michigan consumer survey for October on Friday. Canada publishes retail sales for August on Friday. Large company earnings run all week, with Netflix on Tuesday and Tesla and Meta on Wednesday, which can move US stock indices after the close.
Monday: Canadian inflation
Canadian inflation is expected to rise to 3.2% from 3.0%, with prices up 0.2% in the month after a 0.1% fall in August. Oil above $100 pushes the headline up, while a weak jobs market argues against a rate hike. The Bank of Canada decides on 28 October, the same day as the Fed, and is expected to hold its rate at 2.25%. USD/CAD can react to both the Canadian figure and the price of oil.
Tuesday and Wednesday: the UK in two steps
The UK jobs report on Tuesday is expected to show unemployment steady at 4.9% and pay growth easing slightly to 3.8%. Wednesday's inflation report is the bigger event. Headline inflation is expected to jump to 3.4% from 3.1%, above the Bank of England's own 3.0% forecast, driven by fuel and airfares. Core inflation is expected at 2.8%. Both releases come out at 06:00, before the London open, when GBP pairs can move on thinner liquidity than later in the morning.
Late releases: New Zealand and Japan
Two of the week's inflation reports land late in the server day. New Zealand's third quarter CPI comes at 21:45 on Wednesday, expected to slow to 0.8% for the quarter from 1.5%. Japan's national core inflation for September comes at 23:30 on Thursday, expected to rise to about 2.1% from 1.7%. Tokyo's figure for September, published three weeks earlier, came in at 2.7%, well above forecasts. The Bank of Japan holds its rate at 1.25%, and USD/JPY sits near 158, close to the 159 to 160 area where traders expect Japan to step in.
Friday: flash PMIs
Friday morning brings UK retail sales at 06:00 and then the first business surveys for October from Germany, the Eurozone and the UK, about an hour apart. The US surveys follow at 13:45. These are first estimates and are often revised, but a big miss on the services figures can still move EUR and GBP pairs.
What the week means on a challenge account
- News trading is allowed, with limits. You may open, modify or close positions around scheduled announcements. The company may restrict trading shortly before, during or right after high-impact events. Any restrictions and restricted event lists are published in your dashboard (Challenge Rules 6.5). Check it before Wednesday's UK CPI.
- No bracketing the release. Placing a buy stop and a sell stop around the UK inflation report to catch the first spike in either direction is news bracketing, and it is prohibited (Challenge Rules 7.2(a)). A position based on your own view of the market is fine.
- Japan's CPI sits right before the reset. It comes out at 23:30, 30 minutes before the day resets at 00:00 and 25 minutes before the rollover period, which runs from about 23:55 to 00:15. A loss taken on JPY pairs at 23:30 counts against the old day, and any move after midnight counts against the new one. During rollover, trading is allowed but execution can be worse (Challenge Rules 6.7). See how the daily drawdown limit works.
- Size against the day, not the balance. On a $50,000 Sprint the daily room is $2,000. Brent moved $3.94 on Friday alone, which is $3,940 on one lot of 1,000 barrels. See why 1% risk is a quarter of your day.
- Spreads and slippage count. Around early UK releases, late Asian releases and at rollover, spreads can widen and fills can slip. Both go into floating equity, which is what the daily limit watches (Challenge Rules 6.8).
- The weekend. Positions can be held over the weekend, and the daily limit applies on weekends too (Challenge Rules 6.6). With oil reacting to news from the Middle East and Russia, a gap at Monday's open counts like any other move.
Next
On Friday after the close we will look back at how the week actually played out, and next Monday we preview the Fed and Bank of Canada decisions.
This article is market commentary for information only. It is not a forecast, a recommendation or financial advice, and prices are approximate, taken from public market reports at the time of writing. VFUNDED provides simulated trading evaluations: trading activity is simulated and performance rewards are not guaranteed.