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A likely volatile week ahead – Rabobank

FXStreet (Barcelona) - Analysts at Rabobank pick out the key events for the week ahead and suggest that it could well be a volatile one.

“Today’s first highlight is the German IFO survey for October, which is expected to edge down from 104.7 to 104.5 in terms of business climate; from 110.5 to 110 for current conditions; and from 99.3 to 99.2 for expectations. At the same time we get Eurozone M3 data for September, which is seen edging up to 2.2% YoY and 2.0% 3MMA (though how much of that is from domestic private credit demand is still key). In the US there are the US Markit Services PMI (seen at 57.8 – i.e., all is well) and pending home sales (consensus +1.0% MoM). Later in the session the ECB announces its covered bond purchases, while the BOE publishes its Fair and Effective Markets Review”.

“Tuesday has Japanese retail sales; US durable goods, the S&P/CS house price series, and consumer confidence. The two-day FOMC meeting also starts”.

“Wednesday has UK mortgage approvals, but the highlight is clearly the outcome of the FOMC meeting. As we noted last week, the Fed will no doubt finally end QE. It will also have to be sufficiently upbeat to reassure that all is now well; but still cautious enough not to spook the markets that any aggressive rate tightening is required as a result. That’s a very fine line to walk”.

“Thursday has the RBNZ meeting, German unemployment and CPI, along with Eurozone confidence surveys, as well as the first look at US Q3 GDP. Yellen also speaks on Diversity in Economics, which is an interesting point given that at the academic and institutional level there is none (which is arguably one reason why central banks failed to see recent market crises coming)”.

“Friday has Japanese jobless data and CPI, Aussie PPI and private credit, the Eurozone October CPI estimate, and US personal income/spending, as well as the Chicago PMI and Michigan confidence”.

“All in all, it’s likely to be a volatile week given the Fed and data”.

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