It was another volatile week for financial markets last week. A resounding Democratic victory in the US midterm elections drove sharp swings, while rate hikes from the RBA and the Bank of England kept traders busy. A much stronger-than-expected US jobs report rounded out the week, keeping markets on the move right into Friday’s close.
The Middle East remains front and centre as traders head into the new week. US inflation is the standout release on an otherwise quiet data calendar, and traders will be watching to see whether it reinforces the case for another Fed hike after Friday’s strong jobs numbers.
Central bankers are also back on the speaking circuit after a busy stretch of rate decisions. Any clear signal on where rates could go before year-end could move markets, particularly if officials challenge what traders are already pricing in.
Here is our usual day-by-day breakdown of the major risk events this week:
It is a quiet start to the trading week on Monday, with little of note across all three sessions. Chinese inflation numbers midway through the day do have the potential to move local markets. However, we do start to hear from some of the plethora of central bankers scheduled to speak this week later in the day, when the Bank of England’s Andrew Bailey speaks, as well as the Fed’s Barkin and Goolsbee.
It is a similar story in the Asian session on Tuesday, with little of note scheduled. However, things start to pick up later in the day when we hear from Fed members Waller and Breedon before the main data event of the week, the US CPI data, shortly after the New York open.
It is another quiet day on Wednesday for markets, with little of note scheduled on the calendar across all three sessions, while holidays in France, Canada and the US will see liquidity affected in the later sessions.
Thursday again sees a quiet Asian session, while key UK GDP numbers are out shortly after the European open. The US session sees the release of the usual weekly unemployment claims data, while we also hear from a raft of Fed members later in the day.
The first two sessions on Friday are again thin in terms of fundamental updates. However, key PPI data out of the US early in the New York session should liven things up again.
