US Midterm Elections, Payrolls and the BoE take centre stage in the week ahead

Persistently rising crude oil prices helped the US Dollar (USD) recover this week, with no resolution to the Middle East crisis apparently in sight. After two consecutive declines, the Greenback reversed course and traded near its key 200-week SMA. Further support for the dollar’s rebound came from the Federal Reserve’s hawkish message at its October 28 meeting.

Around 102.00 at the end of the week, the US Dollar Index (DXY) is posting solid gains, albeit slightly below its weekly high near 102.50. Opening the domestic data calendar on November 2 is the final S&P Global Manufacturing PMI, with the ISM Manufacturing PMI and Construction Spending figures to follow. November 3 brings JOLTs Job Openings, Factory Orders, the RCM/TIPP Economic Optimism Index and the API’s weekly US crude oil inventory report. Results from the US Midterm Elections should also begin to emerge. Alongside the regular MBA Mortgage Applications release on November 4, the schedule includes the ADP Employment Change report, Balance of Trade figures, the final S&P Global Services PMI, the ISM Services PMI and the EIA’s weekly US crude oil stockpile report. Challenger Job Cuts accompany the usual weekly Initial Jobless Claims release on November 5. Completing the calendar on November 6 are NFP, the Unemployment Rate and the preliminary U-Mich Consumer Sentiment reading.

After extending the previous week’s losses to revisit 17-month lows around 1.1100, EUR/USD briefly recovered to just above 1.1200 on Thursday. November 2 brings Germany’s Retail Sales and the final S&P Global Manufacturing PMI readings for Germany and the euro area. Scheduled for November 4 are the final S&P Global Services PMI releases for the EMU and Germany, with the euro bloc’s preliminary Inflation Rate following. The S&P Global Construction PMI readings for Germany and the Eurozone arrive on November 5, alongside Germany’s Factory Orders and the bloc’s Producer Prices. Germany’s Industrial Production and the EMU’s Producer Prices are scheduled for November 6.

A move into the 1.3430 area, marking six-week highs, helped GBP/USD secure a third successive weekly advance. The UK calendar begins with the final S&P Global Manufacturing PMI on November 2, followed by the final S&P Global Services PMI on November 4. The S&P Global Construction PMI is scheduled for November 5. Rounding off the UK releases on November 6 are the Lloyds House Price Index and the BBA Mortgage Rate.

Despite giving back some of its earlier advance above 158.00, USD/JPY finished the week with solid gains in the low 157.00s. Japan’s calendar opens with the final S&P Global Manufacturing PMI on November 2, before Monetary Base figures arrive on November 4. The final S&P Global Services PMI, the BoJ Minutes and a 10-Year JGB Auction are scheduled for November 5. Average Cash Earnings and the weekly Foreign Bond Investment figures follow on November 6.

A modest weekly rise in AUD/USD extended its recovery and reinforced the break above 0.7000. Due on November 2 are the final S&P Global Manufacturing PMI and preliminary Building Permits and Private House Approvals figures. November 3 brings the Ai Group Manufacturing Index together with the final S&P Global Services PMI. Household Spending figures follow on November 4, ahead of the Balance of Trade release on November 5.

Central bank speakers set out their economic views

• November 2 brings a speech from the Fed’s Goolsbee.
• On November 3, the BoC’s Macklem is scheduled to speak before the ECB’s Machado and Donnery.
• November 4 features remarks from the ECB’s Lane.
• Speeches on November 5 begin with the Fed’s Hammack and Barkin, with the ECB’s Lagarde, Schnabel and Lane following.
• Scheduled speakers for November 6 include the Fed’s Logan, Williams, Musalem and Bowman, followed by the ECB’s Donnery and the BoE’s Pill.

Central banks prepare for upcoming monetary policy decisions

• November 3 brings the RBA’s interest rate decision (25 bps hike).
• Meetings on November 4 include the Riksbank (25 bps hike) and the National Bank of Poland (unch).
• The November 5 schedule starts with the Norges Bank (unch), followed by the BNM (unch), the BoE (25 bps hike) and Banxico (unch).