U.S. Economy: On Track for a Soft Landing?
Economic Forecast: Soft Landing or No Landing in Sight for the Coming Week?
The US Dollar experienced further recovery, bolstered by ongoing geopolitical tensions in the Middle East over the past week. Additionally, increasing expectations for a 25 basis points rate cut by the Federal Reserve in November were supported by remarks from Fed officials and relevant data.
The US Dollar Index (DXY) rose for the second consecutive week, briefly surpassing the critical 103.00 level, driven by a broad-based bearish sentiment in risk assets and a significant rebound in US yields in the middle and long end of the curve. Upcoming economic indicators include the New York Empire State Manufacturing Index on October 15, followed by weekly Mortgage Applications, Export and Import Prices, and the API report on US crude oil inventories on October 16. A series of releases on October 17 will include the usual weekly Initial Jobless Claims, Retail Sales, the Philly Fed Manufacturing Index, Industrial Production, Manufacturing Production, Business Inventories, the NAHB Housing Market Index, and the EIA report on US crude oil supplies. Building Permits and Housing Starts are set to be released on October 18.
The EUR/USD maintained a negative bias for the third week running, though it did manage to bounce back from new lows just below the 1.0900 level at the week’s end. Key releases for the euro area include Germany’s Wholesale Prices on October 15, followed by the ECB’s Bank Lending Survey, Industrial Production data for the euro area, and Economic Sentiment figures for Germany and the eurozone. On October 17, the ECB will announce its interest rate decision, accompanied by a press conference from President Lagarde. The week will close on October 18 with results for the Current Account and Construction Output in the eurozone.
The pervasive downward trend in risk assets contributed to GBP/USD extending its previous weekly losses, bringing it close to the significant support level of 1.3000. The UK labor market report will be the highlight on October 15, with the Inflation Rate set to be published on October 16, followed by Retail Sales data on October 17.
USD/JPY concluded its second consecutive week of gains, nearing the critical level of 150.00 due to additional selling pressure on the Japanese yen. Japan’s Industrial Production and Capacity Utilization data are due on October 15, with Machinery Orders expected on October 16. On October 17, the Balance of Trade figures and Tertiary Industry Index will be released, followed by the Inflation Rate and weekly Foreign Bond Investment data on October 18.
After testing the 0.6700 support level, AUD/USD managed to stabilize somewhat towards the week’s end, but it was insufficient to prevent a second straight week of losses. The Westpac Leading Index will be released on October 16, with the crucial jobs report in Australia highlighted for October 17.
Anticipating Economic Perspectives: Upcoming Insights
- On October 14, the Fed’s Kashkari and Waller will share their insights alongside the BoE’s Dhingra.
- The Fed’s Daly and Kugler are scheduled to speak on October 15.
- The BoJ’s Adachi will address the public on October 16, followed by the RBA’s Hunter and the ECB’s Buch and Lagarde.
- On October 17, the ECB’s McCaul will deliver remarks, followed by the Fed’s Goolsbee and the BoE’s Wood.
- Finally, on October 18, the Fed’s Bostic, Kashkari, Waller, and Bostic will provide their perspectives.
Central Banks: Upcoming Meetings to Influence Monetary Policies
- The BoT and BI will hold their meetings on October 16.
- On October 17, the European Central Bank (ECB), and BSP will make their rate decisions.
