What to expect next week - 06.11 - 10.11.2017

Over the past week we witnessed positive sentiment in the markets. U.S. indices tracked a record every day. There were a lot of market catalysts which shifted the moods constantly during the week. Chances of another Fed rate hike for December are highly probable, and traders are betting heavy on the news. A new tax plan was released. Improvements to Trump's Tax Plan aim to permanently reduce corporate tax to 20% and also to keep the pension savings plan unchanged. There is a lot of time before the actual tax reform, however this is definitely a step in the right direction. The new changes to Trump's tax reform seem to be able to ease citizens once the administration has come up with new solutions today, this time more focused on households. The Democrats reacted mixed to the news, with the possibility of changes passing through the congress increasing with any correction on the part of the Trump administration. Jerome Powell will be the next president of the Federal reserve. Powell is expected to take hot FED chair on February 3, 2018. He has always been the centerpiece of the central bank's vote, but he has expressed a willingness to return some pre-crisis rules that will definitely satisfy Trump's aspirations and help develop the economy. Powell is also highly favored by Secretary of Finance Steven Mnuchin. The current market reaction is a strong dollar and a rise in indices. On the other end, Theresa May has difficulties making progress with the Brexit talks. Merkel said, that they will reach an agreement. BoE hiked the interest rates in the country for the first time in 10 years, however GBP remain pressured by the shadow that is Brexit.

During next week investors will continue to keep a close eye on the series of events. One of them is the tension between USA and North Korea, as there are indications, that soon there might be another missile test. However, markets got used to that news, and the hedge instruments as ETFs, JPY, Gold, Silver and so on didn't react that sharply on the speculations as before. Traders will also watch for the interest rates decisions by RBA and RBNZ, respectively on Tuesday and Wednesday. Another important economic event will be the retail sales report in the Eurozone, as it is used as a measure for the movement of the inflation in the zone. Inflation on the other hand plays a direct role in the interest rate decision. Despite the Q/E exits, Mario Draghi commented, that the levels will remain unchanged at 2019.

The economic news that will drive the markets next week

Monday
09:00 Germany - Factory Orders
11:00 Europe - Services PMI
17:00 Canada - Ivey PMI

Tuesday
05:30 Australia - RBA Interest Rate Decision
09:00 Europe - German Industrial Production
10:30 UK - Halifax House Price Index
12:00 Europe - Retail Sales
17:00 USA - JOLTs Jop Openings

Wednesday
15:15 Canada - Building Permits
17:30 USA - Crude Oil Inventories
22:00 New Zealand - RBNZ Interest Rate Decision

Thursday
01:50 Japan - Current Account
02:30 Australia - Home Loans
03:30 China - CPI
15:30 USA - Initial Jobless Claims

Friday
11:30 UK - Manufacturing Production
17:00 USA - Michigan Consumer Expectations

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