A fresh CPI reading on Thursday is expected to dictate how much more aggressive the Federal Reserve will get with its interest rate hiking plans, which are already the most combative in decades. The consequential economic release will hold even greater significance after the Labor Department’s September jobs report on Friday suggested officials have further room for increases.
The U.S. economy added 263,000 jobs last month, a moderation from the prior print but still a robust hiring figure, as the unemployment rate fell to 3.5%. The weaker-than-expected decline in payroll gains dashed investor hopes that FOMC members might shift away from monetary tightening sooner than anticipated.
Retail sales data on Friday is expected to show a modest increase for September as auto sales rebounded.
The economic calendar also features data on consumer sentiment which should show how U.S. consumers are faring after months of tighter monetary policy, along with data on initial jobless claims and wholesale price inflation.
The Bank of England’s Financial Policy Committee is to publish meeting minutes on Wednesday. The committee oversaw last month’s emergency intervention to stabilize bond markets after the government’s mini-budget, and the minutes may give some insight into the risks facing pension funds and the implications of sharply higher mortgage rates.
The U.K. is to publish employment data for August on Tuesday, followed a day later by GDP figures for August along with data on industrial output and the trade balance.
Weak economic data could add to pressure on the government to deliver longer-term growth plans.
Investors are betting on the BoE hiking interest rates by a full percentage point at its next meeting in November to tackle an inflation rate currently touching 10%. Planned tax cuts by the new government are expected to fuel inflation.
This Week’s High Impact Events
The times below are GMT +3.
Monday 10th October
20.35 – US – FOMC Member Brainard Speaks
Potential instruments to Trade: USD Crosses.
Tuesday 11th October
09.00 – UK – Average Earnings Index 3m/y & Claimant Count Change
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