March 26, 2023
Weekly Outlook, the first week of November! 
Hot Forex Review
Weekly Outlook

Weekly Outlook, the first week of November! 


After last week’s central banks’ meetings in Europe, Canada, and Japan, in the week ahead, central banks’ policymakers in the US, UK, and Australia will get together to create another huge week. However, eyes mostly will be on the Federal Reserve, earnings, and then on Friday US NFP numbers. Last week’s decisions show that central banks are getting a bit more cautious about their hawkish stance. Let’s see what we have to expect from this week’s meetings. 

1- Eurozone inflation – Monday

The Eurozone economy is already in a recession and the ECB raised the rates by 75 basis points last week, and for the next meeting, we are expecting a smaller move, a 50 bps rate hike to 2.00% in December. As inflation will be the main game changer for policymakers, we have to watch the numbers closely. In September, energy prices increased 40.7% annually, and food category prices were up 11.8%. Core inflation also raised by 6.0%. For October, we expect headline CPI to increase by 10.2%, but core CPI can stay unchanged at 4.8% annually. Expected numbers will hold the pressure on EU stock markets.

2- Reserve Bank of Australia – Tuesday

RBA was the first bank among developed economies that started to slow down its tightening policies, and then BoC and somehow ECB also followed its way. After an unexpected 0.25% rate hike in the last meeting, and while headline CPI inflation surprised to the upside and reached 7.3% in Q3, RBA will have no choice but to continue the rate hike path, by at least 25 basis points. This decision is supposed to put more pressure on Aussie. 

3- Federal Reserve – Wednesday

We have nothing to watch on Wednesday but the Fed meeting and its Interest Rate Decision, Statement, and Fed chair Powell’s Press Conference. The market is already priced for another 75-basis point rate hike. Therefore, more than the decision, the statement and Powell’s press conference will be important to see when Fed is going to slow down its rate hike pace. A less hawkish tone will boost the stock markets and increase the pressure on the US dollar and vice-versa. 

4- Bank of England – Thursday

With headline CPI reaching 10.1% in July, then slipping to 9.9% in August, and again increasing by 10.1% in September, the UK has the highest inflation among developed economies, and still, there is no sign of cooling down. Therefore, we expect BoE to join the less hawkish club a bit later, raising the rates by 100 basis points, bringing the Bank Rate to 3.25%. This decision is expected to help the Sterling but will affect negatively on London Stock markets. 

5- US Nonfarm Payrolls – Friday

The Job Openings and Labor Turnover Survey (JOLTS) showed job openings declining by over one million in August. However, 10 million openings, confirm that demand for workers remains exceptionally strong. Therefore, a 200K expected increase in October payrolls, shows that despite the weakened growth prospects, the labor market remains strong. The unemployment rate which dipped back to a 50-year low of 3.5% last month, is expected to increase to 3.6% in October, and the average hourly earnings are due to rise 0.3% over the month.

6- Earnings of the week!

So far almost 68% of companies included in the S&P 500 index have reported earnings, and about 70% of them could beat the sales expectations. In the week ahead, Eli Lilly, Pfizer, Toyota Motor, Uber, and AMD are due to report on Tuesday. PayPal and Airbnb on Thursday and Alibaba on Friday also will be the most know companies to publish their Q3 earnings reports. 

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