After the release of the Bank of England’s Monetary Policy Committee Meeting Minutes in the prior week, news wires broadcasted on early Thursday that BOE Chief Carney does not find a reason to provide more QE, given that the economic recovery has “strengthened and broadened.”
In other news, New Zealand’s statistics agency revealed last Wednesday that the Trade Balance weakened further and more than expected in August. The trade deficit ballooned to NZD1.191 billion. This is the worst trade deficit since late-2008.
In the UK, CBI Realized Sales soared to 34 in September. Analysts were upbeat but were only expecting 24. Meanwhile, Current Account was weaker than expected at –GBP13 billion.
In the United States, Unemployment Claims continued to beat its forecast for the fourth consecutive week (305,000 versus 319,000 forecast).
US Pending Home Sales declined more than expected in August, according to the National Association of Realtor’s latest report. Sales declined 1.6 percent (analysts expected a 0.9 percent decline).
The Revised University of Michigan Consumer Sentiment posted its second straight reading below the 80-level, 77.5.
Not much happened in Gold this week and there are signs of a possible move back into the $1,400s. Gold bulls successfully defended the $1,300 for five straight days, and this means they got a tiny headstart for next week’s trading. Before they get too complacent, they must strike down potential sellers at and ahead of the $1,400 level. A break of $1,430 is the upside target.
Oil was a different story as price was down for the third straight week. The weekly close below $103 was a strong statement against bears, and they should gear up for next week. There is still time for them to shore up price back into the $105s. That’s their goal for this coming week.
EURUSD has been very quiet this week. In fact, its 101-pip weekly trading range is one of the lowest in many weeks. This pair lags behind GBPUSD but is still poised to move higher if it can make a good close above 1.3600.
GBPUSD went on to complete its fourth straight bullish week, closing comfortably above the 1.6100 level for the first time since early January. Bulls are looking for a break through 1.6400 in the coming weeks.
USDJPY’s 127-pip weekly range was not enough to break out of the prior week’s range. The pair continues to find problems moving away from 98 and reaching the 100.00 level. Price action-wise, the chart looks ugly and we could see 95-96 soon.
The Week Ahead
The brand new week ushers in the month of October starting on Tuesday.
On Monday, the market will have relatively fewer economic releases to look at compared to previous end-of-month days. New Zealand will have Building Consents. This will be followed by Japan’s Retail Sales and Preliminary Industrial Production; ANZ Business Confidence; Australia’s Private Sector Credit; China’s HSBC Final Manufacturing PMI; Germany’s Retail Sales; UK Net Lending to Individuals; Eurozone CPI Flash Estimate; Canada’s GDP; and US Chicago PMI.
Japan will open up Tuesday with Household Spending and Tankan Indices. China will observe National Day but Manufacturing PMI will be out. Other news include Australia’s Retail Sales, Interest Rate Announcement and Statement; Spain’s Manufacturing PMI; Germany’s Unemployment Change; and US ISM Manufacturing PMI.
On Wednesday, there will be Australia’s Trade Balance and Building Approvals; UK Construction PMI and Halifax HPI; ECB’s Interest Rate Announcement and press conference; and US ADP Non-Farm Employment Change.
On Thursday, worthy news to watch out for come in the form of China’s Non-Manufacturing PMI; Italy, UK, and Spain Services PMI; Eurozone Retail Sales; US Jobless Claims, Factory Orders, and ISM Non- Manufacturing PMI.
On Friday, the market will only have a couple of key economic data to look at, particularly BOJ’s Monetary Policy Statement and press conference; Germany’s PPI; and US Non-Farm Employment Change, Jobless Rate; and Canada’s Ivey PMI.