![\"\"](\"\/wp-content\/uploads\/2024\/10\/image-56.png\")
<\/figure>\n\n\n\nGBP \u2013 UK CPI rates next week<\/h2>\n\n\n\n
The pound is losing ground against the USD but not the Yen and the EUR. In terms of monetary policy, we note that no significant announcements were made by BoE policymakers over the past week. From a macroeconomic perspective, the Halifax house prices rate for September came in higher than expected which may imply that demand for housing appears to be on the rise and thus may infer that the UK economy is holding up despite the relatively high interest rates. However, trader interest in the pound may pick up next week as the UK\u2019s employment data for August and CPI rates for September are set to be released. Therefore, should the employment data showcase a resilient labour market, it may provide leeway for the BoE should they wish to adopt a more gradual rate-cutting easing approach and thus potentially aid the GBP. Whereas should the employment data imply a loosening labour market it may force the BoE\u2019s hand to cut interest rates more aggressively which could weigh on the pound. In addition, the same scenario applies for the UK\u2019s CPI rates , where should they imply persistent inflationary pressures it may aid the pound and vice versa.<\/p>\n\n\n\n On a fundamental level, we note that Japan\u2019s newly appointed Cabinet is already being judged by the people for editing an official photo. The issue may appear immaterial, yet is a reminder that the new Government will be closely monitored and any actions made will be looked at with a microscope. We make a start for EUR traders with ECB board member Kazak\u2019s comment that \u201cif inflation in the next year really returns to a sustainable 2%, interest rates have to be on a neutral level\u201d. Furthermore, the ECB\u2019s September monetary policy meeting minutes showcased that ECB Chief Economist Lane proposed that \u201clooking ahead, a gradual approach to dialing back restrictiveness would be appropriate if the incoming data were in line with the baseline projection\u201d. Overall, the ECB\u2019s minutes in addition to ECB policymaker Kazak, tend to imply that the ECB may be poised to continue on their monetary policy easing cycle in their meeting next week. In particular, the majority of market participants currently expect the bank to cut by 25bp with EUR OIS currently implying a 98.5% probability for such a scenario to materialize. Hence, attention may turn to ECB Lagarde\u2019s press conference following the decision, where should she imply that the bank may continue cutting interest rates, it could weigh on the EUR. On the flip side, should ECB President Lagarde showcase a desire to refrain from cutting interest rates further in the near future, it may have the opposite effect and thus aid the EUR. On macroeconomic level, we would like to note Germany\u2019s ZEW economist sentiment figure for October which is due on Tuesday. Should the figure come in lower than the prior reading, it may imply that confidence from the consumer side in the German economy may be worsening and thus weigh on the EUR given the significance of the German economy in the Eurozone and vice versa.<\/p>\n\n\n\n We make a start on a macroeconomic level for Australia by noting that no major financial releases occurred during the week and that traders may be more interest in the employment data for September which is set to be released next Thursday. In particular, we would like to emphasize the unemployment rate which should it come in higher than the prior reading of 4.2% it may imply a loosening labour market which may increase pressure on the RBA to cut interest rates in their next meeting. Whereas should the unemployment rate tick downwards, it may imply a resilient labour market which in turn could increase pressure on the RBA to hike interest rates. Overall, the release of the nation\u2019s employment data for September next week, takes on an even greater importance due to the release of the RBA\u2019s last meeting minutes this week, in which the board discussed both possibilities of raising and cutting interest rates. Thus the employment data may play a crucial role in the bank\u2019s decision during their next monetary policy meeting. Furthermore, given Australia\u2019s close economic ties with China, traders may be interested in China\u2019s GDP rate for Q3 and Industrial output rate for September which are due out on Friday. Should the financial releases imply a resilient Chinese economy, it may translate into a stronger Australian Dollar and vice versa.<\/p>\n\n\n\n CAD traders may be interested on a fundamental level on the path of oil prices, given the status of Canada as a major oil-producing economy. Hence on a geopolitical level, should tensions in the Middle East increase and even further, should oil-producing facilities be targeted in a retaliatory strike from Israel against Iran it could provide support for oil prices and by association the Loonie. We would like to highlight that Canada\u2019s employment data for September is set to be released later on today. Therefore, should the data show a tightening Canadian employment market we may see the CAD getting some support as the data would allow the BoC not to expedite its rate-cutting path while a widening of the slack in the Canadian employment market could add more pressure on BoC for faster rate cuts and thus weigh on the Loonie. For next week, Loonie traders may be interest in the release of Canada\u2019s CPI rates For September, which should they showcase a further easing of inflationary pressures in the Canadian economy it may weigh on the CAD. Whereas should the CPI rates come in hotter than expected it could provide support for the Loonie, as it may increase pressure on the BoC to gradually rather than aggressively ease their monetary policy stance.<\/p>\n\n\n\n As an epilogue, we would like to make a comment for the situation in the Middle East that is still tantalizing the markets. The possibility of Israel targeting and destroying Iranian oil infrastructure such as the Khark Island, a major Iranian oil export hub, are still in play. In such a scenario we may see oil prices getting a substantial boost, as market worries for the supply chains and a subsequent tightening of the international oil market, could intensify further. In the US Equities markets, all three major indexes appear to be on track to end the week in the greens. We would also like to note that earnings season has begun once again, with Citigroup (#C), Morgan Stanley (#MS), Goldman Sachs (#GS) and Rio Tinto (#RIO) amongst others are expected to release their earnings report.<\/p>\n\n\n\n![\"\"](\"\/wp-content\/uploads\/2024\/10\/image-57.png\")
<\/figure>\n\n\n\nJPY \u2013 A hawkish BOJ?<\/h2>\n\n\n\n
On a monetary level, we would like to note BOJ Himinio who stated that if the outlook for economic activity and prices presented in the July report are achieved, the BOJ will accordingly raise interest rates. Thus the apparent contradiction of BOJ Governor Ueda\u2019s comments last week, appears to be enhancing the prospect of a hawkish BOJ. Thus the prospect of an increasingly hawkish BOJ, may aid the JPY in the coming week should more BOJ policymakers adopt a similar tone. In terms of financial releases for JPY traders next week, we would like to note Japan\u2019s CPI rates for September which are due on Friday. Should the CPI rates further enhance and showcase that the bank is on track to achieve 2% inflation in a sustainable manner, it may aggravate calls for further rate hikes by the BOJ which may aid the JPY. On the flip side, should the aforementioned scenario not materialize, it may increase pressure on the BOJ to withhold from raising interest rates which in turn may weigh on the JPY.<\/p>\n\n\n\n![\"\"](\"\/wp-content\/uploads\/2024\/10\/image-58.png\")
<\/figure>\n\n\n\nEUR \u2013 ECB decision next week<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2024\/10\/image-59.png\")
<\/figure>\n\n\n\nAUD \u2013 Employment data in focus<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2024\/10\/image-60.png\")
<\/figure>\n\n\n\nCAD \u2013 September CPI rates next week<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2024\/10\/image-61.png\")
<\/figure>\n\n\n\nGeneral Comment<\/h2>\n\n\n\n