The Reserve Bank of Australia, European Central Bank, and the Bank of England made their respective interest rate announcements this week. The RBA left its Cash Rate unchanged at 2.50 percent on Tuesday. On the other hand, the BOE and ECB made back-to-back announcements on Thursday. BOE decided to maintain the Official Bank Rate at 0.50 percent, while the ECB surprised the market with its 25 basis points cut in its Minimum Bid Rate to 0.25 percent.
In other relevant news, UK’s Construction PMI and Services PMI both surprised to the upside. Construction PMI increased to 59.4 (58.9 expected), while the October Services PMI went straight to 62.5 after posting 60.3 in September.
Jobs data out of New Zealand showed Employment Change rose 1.2 percent in the recent quarter, and the September quarter’s Unemployment Rate eased slightly to 6.2 percent from the previous quarter’s 6.4 percent reading.
Canada’s Building Permits advanced only 1.7 percent in September, following a revised reading of -20 percent last August. On the other hand, the October Ivey PMI jumped to 62.8, its strongest reading in five months.
In the United States, Non-Farm Employment Change surged to 204,000 in October after registering a 163,000 increase in September. The Unemployment Rate came in at 7.3 percent (as expected), while the ISM Non-Manufacturing PMI increased to 55.4 in October.
Gold posted a second consecutive weekly decline after price topped out at $1,361 last week. The $1,300 level hold during the first three days but eventually succumbed to intense bear pressure on Thursday. The current price movement brings the $1,251 low seen in mid-October back in the crosshairs.
After two intensely bearish weeks, Oil took a break this week but it almost broke through the $93 level. As mentioned, the acid test would be whether bears can take out the $90 level this November. Expect to see some more action between $93 and $99 in the coming sessions.
Another explosive week saw EURUSD dive more than 250 pips as the ECB delivered a shocking announcement (interest rate cut) last Thursday. This declaration saw price slice through the 1.3400 level, but somehow bulls manage to reduce the damage and price closed the week at 1.3366, an important support area. We could expect more action this coming week!
GBPUSD was quite oblivious of the action in EURUSD, and the former tried to move away from the weekly consolidation low seen around 1.5900. Bulls were able to recapture 1.6100 but Dollar strength pressed the pair back into the 1.6000s. We could see more of the same action next week.
USDJPY showed remarkable volatility to close this week, something unseen since mid-September. In the end, bulls emerged victorious as they were able to bring price to close right above the 99.00 level. This gives them the ticket to attack the coveted 100.00 level.
The Week Ahead
This Monday, Japan will release its Current Account and Bank Lending data. Meanwhile, the Australian Bureau of Statistics will issue the latest report on Home Loans. Then, things will quiet down quickly for the rest of the day thanks to the observance of several holidays (Armistice Day for France, Remembrance Day for Canada, and Veterans Day for the United States).
On Tuesday, there will be news releases such as Japan’s Tertiary Industry Activity; Australia’s NAB Business Confidence; China’s New Loans; and the UK’s PPI, RPI, and CPI.
Wednesday will start off very early with New Zealand’s RBNZ Financial Stability Report. A few hours later, we will hear about Australia’s Westpac Consumer Sentiment and Wage Price index; Japan’s Core Machinery Orders; UK jobs data, BOE Carney’s speech, and BOE Inflation Report; Eurozone Industrial Production; and US Federal Budget Balance.
Thursday will be a very busy day with New Zealand’s Business NZ Manufacturing Index and Retail Sales; Australia’s MI Inflation Expectations; France’s, Italy’s, and Germany’s Preliminary Gross Domestic Product; Switzerland’s PPI; ECB Monthly Bulletin; UK Retail Sales; Canada’s Trade Balance and NHPI; US Jobless Claims, Trade Balance, and Fed Chairperson Designate Yellen’s speech.
Finally, Friday will cap the week with the announcement of Eurozone CPI; Canada’s Manufacturing Sales; US Empire State Manufacturing Index, Import Prices, Industrial Production, and Capacity Utilization Rate.