The new trading week brings a lighter economic calendar, but there are still several events that can move currencies and yields. The main highlights are Monday’s U.S. ISM services report, Wednesday’s Federal Reserve minutes, Thursday’s ECB monetary policy accounts, and Friday’s Canadian employment and U.S. consumer sentiment reports.
For traders, the question is whether the incoming data show growth holding up while price pressures remain elevated, or whether the economy is losing enough momentum to change the policy outlook.
All times below are U.S. Eastern. Forecasts reflect the calendar available on October 2 and may change.
Monday, October 5: Services activity gets the first look
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10:00 a.m. — U.S. ISM services PMI for September: Expected at 55.1, versus 55.4 previously.
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Other releases include the final services PMIs for the eurozone, UK and U.S., along with eurozone producer prices.
The ISM report is the first major U.S. test of the week. Traders will want to look beyond the headline and focus on new orders, employment and prices paid.
A reading above 50 signals expansion. However, the mix matters. Solid activity with elevated prices would suggest continued inflation pressure. Slower orders and weaker employment would tell a different story.
For the dollar, watch whether Treasury yields confirm the initial reaction. A stronger headline may get buyers interested, but the details need to support that move.
Tuesday, October 6: Trade and European demand
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2:00 a.m. — German factory orders for August. Est -1.0% vs 2.5% last month
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4:30 a.m. — UK construction PMI. Est 45.0 vs 44.3 last month
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5:00 a.m. — Eurozone retail sales for August. Est 0.3% vs -0.6% last month
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8:30 a.m. — U.S. and Canadian trade balances for August. US Trade deficit is expected to show a larger trade deficit of -$95.2B vs -88.6B last month. Canada is expected to show a trade surplus of 1.3B vs 0.8B last month
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10:00 a.m. — Canada’s Ivey PMI.
The European releases will offer another check on business demand and household spending. German orders are especially useful for assessing the pipeline of future manufacturing activity.
In North America, the trade reports provide information on exports, imports and the contribution of trade to growth. A narrower deficit is not automatically a sign of stronger demand. Traders need to see whether it reflects rising exports or falling imports. The trade balance in the US is Goods and Services. The US has a trade deficit with goods, but maintains a trade surplus with services.
Canada’s Ivey PMI adds an activity reading ahead of Friday’s employment report.
Wednesday, October 7: Fed minutes take center stage
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2:00 a.m. — German industrial production for August. Est 0.5% vs -1.1% last month
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10:30 a.m. — U.S. weekly crude oil inventories.
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1:01 p.m. — U.S. 10-year Treasury auction.
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2:00 p.m. — FOMC minutes from the September 15–16 meeting.
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3:00 p.m. — U.S. consumer credit for August.
The Fed minutes are the week’s main U.S. central bank event. Traders will look for the balance of concern between inflation and employment, the degree of agreement among policymakers, and the conditions that could justify another policy move.
There is an important timing issue: the minutes describe September’s discussion and will not include the employment data released on October 2. Their value is in showing the Fed’s thinking at that meeting. Traders then have to judge how the newer data fit that framework.
The Treasury auction also deserves attention. Strong or weak demand can move yields ahead of the minutes and influence the dollar’s reaction.
Thursday, October 8: ECB accounts and U.S. jobless claims
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7:30 a.m. — ECB monetary policy meeting accounts.
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8:30 a.m. — U.S. initial jobless claims: Expected at 200,000, versus 197,000 previously.
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10:00 a.m. — Final U.S. wholesale inventories for August. Est 0.7% vs 0.7% last month
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1:01 p.m. — U.S. 30-year Treasury auction.
The ECB accounts should give euro traders more detail on policymakers’ assessment of inflation and growth. The key is whether the discussion points toward greater urgency to tighten policy or more caution about the economic outlook.
In the U.S., jobless claims provide a timely follow-up to the monthly employment report. One week does not establish a trend, but a sustained rise would be more meaningful.
The 30-year auction will provide another test of demand at the longer end of the Treasury curve.
Friday, October 9: Canadian jobs and U.S. inflation expectations
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8:30 a.m. — Canadian employment for September: Expected to rise 9,500.
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Canadian unemployment rate: Expected at 6.5%, versus 6.4% previously.
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10:00 a.m. — Preliminary University of Michigan consumer sentiment for October: Expected at 48.1, unchanged from September.
Canada’s jobs report is the main domestic event for the CAD. Traders should examine full-time versus part-time employment, participation and wage growth alongside the headline job change.
A stronger report could support the Canadian dollar and pressure USDCAD lower. A weaker report could have the opposite effect, depending on the broader U.S. dollar and oil backdrop.
For the Michigan survey, inflation expectations may matter as much as sentiment. A rise in expected inflation would complicate the policy outlook, particularly if confidence remains weak.
What matters for traders
The calendar gives traders the scheduled catalysts. The price action tells us whether buyers or sellers can take control.
Before the major releases, identify the nearby swing areas, moving averages and retracement levels. After the data, watch whether the price can break—and stay—beyond those levels. An initial move that quickly reverses can be just as useful as a break that holds.
Looking one week further ahead, U.S. CPI is scheduled for Wednesday, October 14, at 8:30 a.m. ET. Next week’s releases will help shape positioning ahead of that inflation report.
This article was written by Greg Michalowski at investinglive.com.