What to expect next week 23.10 - 27.10 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. Dow Jones Industrial Average reached 23,000 for the fist time in its history. 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), however the central bank will keep the interest rates unchanged until 2019. US Senate passes 2018 budget blueprint, setting stage for Republican tax reform effort. Long way to go on tax reform, but a step forward. What this does is to allow Republicans to avoid a Democrat filibuster on a future tax reform bill. USD trading higher on this. Federal Reserve Governor Jerome Powell is the leading candidate to become the chair of the U.S. central bank after President Donald Trump concluded a series of meetings with five finalists Thursday, three administration officials said. The officials cautioned that Trump, who met with current Chair Janet Yellen for about half an hour on Thursday, has not made a final decision.
Powell, known as Jay, has been heavily favored by Treasury Secretary Steven Mnuchin, who is leading the Fed chair search for Trump. Other finalists include former Fed Governor Kevin Warsh, Stanford economist John Taylor and National Economic Council Director Gary Cohn. Of the five finalists, Powell would likely face the least opposition to confirmation in the Senate, according to interviews with nearly a dozen members of the Banking Committee. On the other front, Theresa May has difficulties making progress with the Brexit talks. Merkel said, that they will reach an agreement.

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. Traders will also keep a close eye on the BoC's meeting in Wednesday as they will make a decision regarding the interest rates in the country. At the moment the rates are at 1.0% and it is highly likable that the bank will hike them this week. Market participants will also watch the interest rates decision from the European Central Bank. Traders don't bet on any changes there, however the press conference later on on Thursday will be highly anticipated, as it can cast light on questions regarding the future of the Q/E program, the monetary policy and even the progress on the Brexit talks.

The important economic news for next week:
Monday:
15:30 Canada - Wholesale Sales

Tuesday:
10:30 Europe - German Manufacturing PMi
12:00 Europe - Manufacturing PMI
16:45 Europe - Manufacturing PMI

Wednesday:
03:30 Australia - CPI
11:00 Europe - German Ifo Business Climate Index
11:30 UK - GDP
15:30 USA - Core Durable Goods
17:00 USA - New Home Sales
17:00 Canada - BoC Interest Rate Decision
17:30 USA - Crude Oil Inventories
20:15 Canada - BoC Gov Poloz Speaks

Thursday:
00:45 New Zealand - Trade Balance
14:45 Europe - ECB Interest Rate Decision
15:30 Europe - ECB Press Conference
17:00 USA - Pending Home Sales

Friday:
03:30 Australia - PPI
15:30 USA - GDP

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