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The US dollar was somewhat on the backfoot in a relatively slow week. Will it continue sliding? The upcoming week features the all-important inflation and retail sales figures from the US as well as housing data and more.   Here are the highlights for the upcoming week.

The US tax plan is advancing relatively slowly and worries about a delay to the corporate tax cut have weighed on the US dollar. Fed members that spoke during the week left the expectations unchanged for a rate hike in December. The JOLTs job openings report beat expectations but this wasn’t enough to assist the greenback. The Catalan crisis is back on the back-burner in Europe that enjoys upgraded forecasts. The pound was stable amid political trouble in the UK and as Brexit talks continue. Oil prices continued advancing after the breakout and this helps the C$. The RBNZ was somewhat more hawkish, providing support to the kiwi, while the RBA did not rock the boat.

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  1. FOMC’s Harker talks: Monday, 00:10. Philly Fed President Patrick Harker will speak early in the week and can have an outsized impact due to low liquidity. He has previously expressed optimism about the US economy and supported raising rates.
  2. German GDP: Tuesday, 7:00. While we already received the first estimate of euro-zone GDP, this did not include the largest economy: Germany. The locomotive of the euro-zone enjoyed a healthy growth rate of 0.6% in the second quarter. The same level is on the cards now. A revised figure for the all-European number will be influenced by this publication.
  3. UK inflation: Tuesday, 9:30. Headline inflation reached 3% in the UK, the top of the 1-3% range and the rise prompted the BOE to raise interest rates for the first time in over a decade. In that rate decision, Carney said that inflation is expected to peak in October 2017, which is what this report covers. It will probably be a bit higher than 3%. 3.1% is forecast now.
  4. Yellen, Draghi, Carney, and Draghi speak Tuesday, 10:00. The governors of the US FED, the ECB, the BOE and the BOJ will all speak at a panel at the ECB’s conference in Frankfurt. The topic is communication, which has been an important part of central banks’ policies. Any comments about these all-important CBs policies could impact the USD, EUR, GBP, and the BOJ. Draghi will also speak on Friday at 8:30, but the panel with his peers on Tuesday is more important.
  5. US PPI: Tuesday, 13:30. Producer prices have risen by 0.4% in September, and so did core PPI. The data reflects inflation in the pipeline – future consumer prices. A smaller rise is likely now. The data also serve as a warm up to the CPI release. Headline PPI is expected to rise by 0.1% and core PPI by 0.2%.
  6. Japanese  GDP: Tuesday, 23:50. Japan has been enjoying six consecutive quarters of economic growth, with a healthy expansion worth 0.6% in Q2 2017. We now get the first release for Q3. Note that revisions can be quite significant in this figure. A slower growth rate of 0.4% is projected now.
  7. US CPI: Wednesday, 13:30. Solid growth and upbeat job gains do not translate into inflation. Core CPI has been stuck at 1.7% for long months after sitting above 2% early in the year. Month over month, core CPI advanced by only 0.1% in September. Headline CPI jumped by 0.5%, but this is of lesser importance. The Fed is still set to raise rates in December, but the prospects for three hikes in 2018 could be altered if inflation remains subdued. Headline CPI is expected to rise by 0.1% m/m and core CPI by 0.2% m/m.
  8. US retail sales: Wednesday, 13:30. Consumption is key to the US economy, and shoppers have been picking up steam in September. Headline retail sales advanced by 1.6% while core sales rose by 1%. Note that the simultaneous  publication of both inflation and retail sales numbers could cause a choppy reaction. Headline sales carry expectations for remaining unchanged and core sales are predicted to rise by 0.2%.
  9. Australian jobs report: Thursday, 00:30. The economy of the land down under gained 19.8K positions in September, a decent outcome. The unemployment rate has dropped to 5.5%. Solid numbers are on the cards now again. Like the US, upbeat employment does not translate into inflation. An increase of 18.9K is estimated and the unemployment rate is forecast to remain unchanged at 5.5%.
  10. FOMC’s Brainard talks: Thursday, 14:30. Lael Brainard is a permanent voter at the FOMC. She does not make many public appearances and her opinions certainly matter. Her speech at Ann Arbor could provide hints about future monetary policy.
  11. US housing data: Friday, 13:30. Building permits and housing starts can go in opposite directions, but if both figures go in the same direction, it has an impact on the dollar. Data for September showed a drop in building permits to 1.23 million (annualized) while housing starts slipped to 1.13 million. Small rises are likely now: building permits to 1.25 million and housing starts to 1.19 million.

*All times are GMT

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