Investors will focus on the following key events for the next week, after a strong rebound for equities and cryptocurrencies the previous week. Earnings season continues after some tech companies’ results disappointments. Amazon reported weak quarterly results and the stock sold aggressively on Friday. Microsoft and Meta also disappointed investors and many brokers downgraded the stocks. Apple saved the week for the tech sector reporting strong top and bottom line. The improved sentiment also boosted cryptocurrencies, Bitcoin managed to return above $20700 and Ethereum traded close to the $1600 level while the Dogecoin rally continues.
Wednesday’s FOMC meeting will deliver the fourth consecutive 75 basis points rate hike given that annual rates of core inflation continue higher rather than lower and the economy has returned to growth as the recent GDP report showed. The labour market in the U.S. remains robust with job vacancies exceeding the number of unemployed Americans by almost four million. The words of the FOMC press conference and the outcome of the next jobs report will help economists to get an idea for what the Fed may do in December. This week there have been hints that officials could open the door to a slower pace of rate hikes.
On Monday from Europe, we have the Eurozone CPI for October and from the USA we have the Chicago PMI for October. The expectations are for a reading of 47.2, the previous reading was at 45.7.
In earning reports among others would release results: SYK ANET GPN ON AWK HOLX CAR
The ISM Manufacturing PMI expected at 50 the previous reading was at 50.9.
Tuesday earnings releases include: LLY PFE AMD ABNB ETN MPC ECL PAYC CLX
Wednesday is an FOMC day, the expectations are for a 75 basis point hike to 4% from 3.25%. The ADP National Employment for October will also be released with expectations that private sector payrolls have risen by 200.000, the previous reading was at 208.000.
In Germany, we have the Unemployment rate for October SA and from Eurozone the S&P Global Manufacturing final PMI.
Wednesday earnings: QCOM CVS HUM YUM ROK EBAY Z LUMN ROKU BKNG CLR CPK SAND HOOD
On Thursday we have the Initial Jobless Claims and the forecasts are for 220000, the previous reading was at 217000. The Factory Orders for September and the International Trade for September with estimates for -68.1 billion the previous reading was at -67.4 billion.
In central banks, the Bank of England is expected to raise rates by 50 or 75 basis points and Norges Bank is also expected to raise rates by 50 basis points.
Earnings reports for Thursday: AMGN PYPL SBUX CI MRNA MSI EXC SQ WBD GOLD DDOG K COIN NET DASH TWLO TEVA DISH CROX.
On Friday we have the Non-Farm Payrolls for October and the forecasts are for 200k, the previous reading was at 263k. The unemployment rate is expected at 3.6% from 3.5%, back to pre-Covid levels.
Canada will also report the unemployment rate for October, forecasts are 5.3% above the previous reading of 5.2%.
Friday’s earnings reports: BRK.A DUK D HSY CBOE DKNG FUBO
Forex Outlook Next Week
AUDUSD traders will focus on the RBA decision on Tuesday, November 1. Analysts’ expectations are for a 25 basis points rate hike while the miss in the third quarter inflation print leaves room for a 50 basis points hike. Australian retail sales will also attract investors’ attention.
Bank OF England will be on focus on Thursday as analysts expect a 50 basis points hike, from 2.25$ to 2.75% although there are some analysts who still believe that BOE will proceed with a 75 basis points hike. While investors still expect Bank Rate to peak around 5% in 2023 many BOE members talk about a peak at 4%.
EURUSD Next Week
The FOMC meeting on Wednesday will deliver the fourth consecutive 75 basis points interest rate hike due to rising core inflation, as the economy has returned to growth with a decent third-quarter GDP figure. The main question we have to answer is what the Fed may do in the December meeting after the fastest tightened pace in the last 40 years. Last week hints showed that officials could open the door to a slower pace of rate hikes after 300 basis points (plus the November 75 bp) of interest rate increases. Most analysts expect a terminal rate between 4.5% and 5%.
Nikolas has been involved in the finance industry for over fifteen years spanning across Europe and USA with a depth of knowledge and experience within many aspects of the financial markets. Nikolas gained several years experience with some of the Europe’s leading Brokers, as equity analyst, and trader managing accounts for both Private and Corporate Investors. He enjoys both the fundamental and technical aspects of trading focusing on stock markets and all FX majors. Currently, Nikolas provides analysis and comments to online financial publications. Educational background in Economics (BSc), and Finance (MSc).