What to expect next week 16.10 - 20.10 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. FOMC Meeting Minutes stated, that an additional rate hike this year is highly probable, and traders are betting heavy on the news. Another important new came from ECB, as they made an agreement to start with the Q/E exits. The quantitative easing will be tempered by half (30 bln from the current 60). Another news from the region transferred in a bullish manner to the GBP. Michael Barnier made a proposal for the UK to remain on the common markets for another 2 years as a transitional period. This is viewed as a soft Brexit and will support the currency.

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. Another thing investors will watch is any signs from Donald Trump about who will be the next FED chairman. Currently, Kevin Warsh with 43% is a favorite and markets have taken this into account. If we get a surprise, we may see a serious decline in USD and US stocks and indices. Markets will also monitor whether the new Central Bank President will have a "rule-based" approach to raising interest rates. In essence, this means that the Federal Open Market Committee (FOMC) will raise or lower rates based on indicators such as unemployment and inflation.

Important economic data that we are expecting next week:

Monday:
04:30 China - CPI

12:00 Europe - Trade Balance

Tuesday:
00:45 New Zealand - CPI

11:30 UK- CPI

12:00 Europe - German ZEW Economic Sentiment

13:00 Europe - CPI

Wednesday:
11:30 UK - Average Earnings Index + Bonuses

15:30 USA - Building Permits

17:30 USA - Crude Oil Inventories

Thirsday:
03:30 Australia - Employment Change

05:00 China - GDP

11:30 UK - Retail sales

15:30 USA - Philadelphia Fed Manufacturing Index

Friday:
15:30 Canada - Core CPI

15:30 Canada - Retail sales

17:00 USA - Existing Home Sales

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