16.10.23 - 20.10.23
Results of the previous week
| VIX+15.76% | COFFEE +7.46% | NG+3.53% |
PA -4.58% | NQ -4.30% | NZDUSD -1.78% |
US indices dropped at the end of the week. This was partly due to some companies that released financial reports showing poor results. On top of that, the US Federal Reserve Chairman stated that inflation remains too high and that lower economic growth may be necessary to curb it. He also noted that he doesn't consider current rates to be too high. The rise in US Treasury bond yields to a new 16-year-high increased pressure on the stock market.
Meanwhile, the Forex market traded mixed. The dollar weakened slightly against the euro as part of a correction while also strengthening against the pound and the New Zealand dollar. This strengthening is mainly due to anticipation of the Fed's upcoming meeting to discuss interest rates. The US regulator will either do another rate hike or clearly state its intentions that it's prepared to maintain its hawkish monetary policy.
The conflict in the Middle East continues to escalate, which is providing key support for oil. The region is home to many fairly large oil-producing countries, which could lead to lower oil production and, consequently, lower supply. Brent crude oil (BRN) climbed above $93 a barrel amid this situation.
Key events of the current week
Bank of Canada interest rate decision | DATE 25.10 | GMT | FORECAST | PREV. | IMPORTANCE |
The Bank of Canada's rates are at their highest point in 22 years. In September, the regulator paused its rate hike cycle, but according to forecasts from global analytical agencies, another increase is expected at its upcoming October meeting. These forecasts are grounded in good reason. Bank of Canada representatives have repeatedly stated that further monetary policy tightening is necessary given the ongoing high inflationary pressure, with inflation in Canada above the regulator's target level. The rate hike and high oil prices are good news for the Canadian dollar.In this scenario, USD/CAD may return to the 1.3570 mark.. | |||||
The European Central Bank's interest rate decision | DATE 26.10 | GMT | FORECAST | PREV. | IMPORTANCE |
Against all expectations, the ECB raised its key interest rate to 4.5% at its last meeting. That's the highest level since 2001. Forecasts expect the rate to remain unchanged at the ECB's October meeting, partly due to less-than-positive macroeconomic data for the region. However, price pressure remains fairly high, and there are risks of it increasing further amid rather high energy prices and the start of the heating season. That's why the regulator is maintaining a pretty hawkish monetary policy that supports the euro.If the report meets forecasts, EUR/USD could move to around 1.0680. | |||||
The US. GDP growth rate | DATE 26.10 | GMT | FORECAST | PREV. | IMPORTANCE |
Despite a fairly high interest rate and an aggressive stance from the Federal Reserve, the US economy is fairly stable. Major analytical agencies predict that its growth rate will significantly accelerate by the end of Q3. The lack of signs that the country's economy is in cooldown allows the US regulator to continue its fight against high inflation. That means there could be another rate hike if needed. That's good news for the dollar. However, as a result, an expensive US dollar puts pressure on metals, i.e., gold.In this scenario, we could see XAU/USD fall to somewhere around 1970.00. | |||||
