Review of the main events of the Forex economic calendar for the next trading week (25.10.2021 – 31.10.2021)

Speaking on Friday at the conference to mark the centenary of the Virtual Bank for International Settlements, the Fed Chairman Jerome Powell reaffirmed the bank’s plan to cut bond purchases, but lowered the likelihood of interest rate hikes in the coming months.

“Coping with the pandemic is key to the global economy,” was one of the first tenets in Powell’s speech. He expects that “higher inflation is likely to be longer than anticipated,” but a rate hike now “would be premature.” “Now is the time to wind down stimulus, not hike rates, and the Fed is on track to complete the stimulus winding process by mid-2022,” Powell said, adding that “The Fed will raise rates if it sees serious inflationary risks”. In his opinion, “the Fed’s policy is well tuned.”

The dollar mostly strengthened after Powell’s speech. Nevertheless, the DXY dollar index nevertheless declined last week, while US stock indices rose, ending with an increase for the third week in a row. One way or another, the Fed’s policy will remain soft. Even if the Fed begins to gradually reduce the volume of purchases in the bond market, the interest rate will remain near zero levels for a long time.

Next week, financial market participants will pay attention to the publication of important macro statistics from Australia, the US, Germany, and the Eurozone. But the main focus will be on the results of the meetings of the central banks of Canada, Japan, and the Eurozone.

*during the coming week, new events may be added to the calendar and / or some scheduled events may be canceled

**GMT time

Monday, October 25

No important macro statistics scheduled to be released.

Tuesday, October 26

08:00 EUR Euro Area Bank Lending Survey

The survey on the state of the bank lending system is conducted by EU financial experts 4 times a year. The main goal of the survey is to obtain expanded information on the conditions of bank lending in the Eurozone.

The obtained data are used by the ECB management when making decisions on the bank’s monetary policy. This report may cause increased volatility in the euro quotes and on the European stock market at the time of its publication if it contains unexpected conclusions regarding the terms of lending to businesses and households in the Eurozone.

Wednesday, October 27

00:30 AUD RBA trimmed mean core inflation index (Q3). Consumer Price Index (Q3)

This indicator is published by the RBA and the Australian Bureau of Statistics. It reflects the dynamics of retail prices of goods and services included in the consumer basket. The simple trimmed mean method takes into account the weighted average kernel, the central 70% of the index components. Previous index values: + 0.5% (+ 1.6% YoY) in Q2, + 0.3% (+ 1.1% YoY) in Q1 2021, +0 , 4% (+ 1.2% YoY) in Q4 2020. According to the forecast, it is expected that the value of the indicator for the 3rd quarter of 2021 will be + 0.5% (+ 1.6% in annual terms). Despite the continuing dynamics, this is still a weak indicator. If the value of the indicator turns out to be worse than the forecast, it is likely to further negatively affect the AUD. The data indicate low inflationary pressures in the country. The growth of the indicator above the forecast should have a positive effect on the AUD in the short term.

Consumer Price Inflation Index (CPI) published by the RBA and the Australian Bureau of Statistics measures the dynamics of retail prices for goods and services in Australia. CPI is the most significant…

Source link