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Weekly Fundamental Outlook

9 Oct 2017 02:27 PM

After a week full of economic releases and events, which had a notable impact on the markets. Another week comes in with few key economic indicators, which may drive the volatility lower across the board.

However, traders are advised to trim their risk throughout the week as there are reports are talking about a possible missile test by North Korea later this week. The reports are talking about a missile that can reach the US west coast.

Moreover, it looks like that these reports are getting priced in in the market, as Gold is up by more than 0.6%, while silver added more than 0.9% until this report is released.

Calm Monday

The first trading day of the week came with very low volatility as Japan, the US and Canada are closed due to local holidays.

Yet, the British Pound showed some strength earlier today rising by more than 0.8% until this report is released, as the Labour department announced that it used the wrong data in its recent report, and it will be corrected very soon.

Its All About Industrial Production on Tuesday

Tomorrow, its all about the industrial production figures, especially in Europe, as we will be waiting for the Industrial Production in France, Italy and the UK.

Estimates are optimistic, as France Production may rise by 0.5%, Italy +0.2% and the UK +0.2%. In addition, we will be watching the Manufacturing Production and the Trade Balance deficit in the UK, which set to come in with positive outcomes as well, while the US session is expected to be calm with no significant economic releases.

FOMC Meeting Minutes

On Wednesday, its all about the FOMC Meeting Minutes. There are only few economic releases in Asia and Europe on that day, which unlikely to have any major impact on the markets.

Traders should be watching the FOMC Meeting Minutes, as we will be looking for more clues by the Federal Reserve about December’s rate hike possibilities.

Despite the fact that this Meeting Minutes was written before the recent Jobs Report, but it would give us more information about the general approach of the members before the Jobs Report.

If they are optimistic to raise the rate one more time in December, then the Jobs Report would be the confirmation for such event, especially after the notable rise in wages growth.

US Inflation Is Key

On Thursday and Friday, eyes will turn the most toward the US, as we will be watching the PPI data on Thursday, which set to rise by 0.4%, which would be the second monthly increase in a row, while the Core PPI is set to rise by 0.2%.

On Friday, which might be the most important day of the week, eyes will turn toward the US CPI figures, which should also give us a confirmation on whether the recent rise in wages is real. An increase in wages should have a positive impact on CPI data.

The MoM CPI is expected to rise by 0.6%, which would be the second biggest increase this year, while the Core CPI is expected to rise by 0.2% only.

Moreover, Retail Sales recovery is expected to continue, with the estimates of 1.5% increase in September, which would be the biggest MoM increase since 2010, while the Core Retail Sales, may post the biggest increase since 2015 as it is expected to rise by 0.9%.

Edited by:

Nour Eldeen Al-Hammoury

Market Analyst

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