Economic Calendar

  • UK Jobs & PMI Data: Tuesday, October 24, 7:00 BST and 9:30 BST, respectively
  • AUD CPI Data: Wednesday, October 25, 01:30 GMT
  • German and French Flash PMI Data: Tuesday, October 24, 8:30 BST and 9:15 BST, respectively
  • ECB Policy Decision: Thursday, October 26, 12:15 GMT

Major Headlines

  • Q3 Earnings: Microsoft, Google, Amazon, and Meta will all release earnings this week.
  • Geopolitical Tensions and US Treasury Yields: Keep an eye on the VIX and US Treasury yields, which have been acting as headwinds for risk assets.
  • Company Guidance: Don’t just look at the actual EPS and Revenue numbers, but make sure to pay attention to the guidance provided by the companies.

UK Jobs & PMI Data

The unemployment rate is expected to remain unchanged at 4.3%, while the flash PMI is expected to show a slight uptick in the MFG PMI and a marginal downtick in services. A weaker-than-expected reading could amplify concerns of a looming recession, while a stronger reading may provide a fleeting respite for the stretched EUR.

AUD CPI Data

Analyst consensus is pointing towards a stabilization of the headline inflation rate, maintaining its position at 5.2% YY. This data will be closely watched by the RBA, as it could influence its monetary policy direction. A higher-than-anticipated inflation figure could fuel speculation of an imminent RBA rate hike, potentially providing short-term support to the AUD. Conversely, an inflation figure in line with or below expectations may alleviate pressure on the RBA to act immediately, potentially leading to a softer AUD in the short term.

German and French Flash PMI Data

Traders must pay close attention to these figures, as they have been known to induce volatility and shape sentiment, especially in light of the recent economic headwinds faced by the EZ. A weaker-than-expected reading could amplify concerns of a looming recession, while a stronger reading may provide a fleeting respite for the stretched EUR.

ECB Policy Decision

The market consensus is firmly aligned towards no change in interest rates, reflecting the view that the ECB has likely reached the zenith of its tightening cycle. Inflation, while still a concern, has shown signs of moderation, and the economic backdrop is anything but robust. Traders should brace themselves for potential volatility surrounding the policy announcement, with particular attention on any forward guidance provided by the ECB.

Euro: Short-Term Prospects

In the immediate aftermath of these events, traders can expect heightened volatility in the Euro. The currency’s short-term prospects hinge on the confluence of the PMI data and the ECB’s policy stance. A dovish tilt or weaker economic readings could exacerbate the Euro’s woes, while any unexpected hawkish signals or positive economic surprises may offer a temporary lifeline.

This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. INFINOX is not authorised to provide investment advice. No opinion given in the material constitutes a recommendation by INFINOX or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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