Weekly Outlook, 4-8 October

OPEC and NFP! 

Market analyst – IFC Markets

OPEC Meeting on Monday and US employment data on Friday will be at the center of attention. US Congress also has to agree on the US government spending bill, otherwise most US government employees have to start 2022 unemployed and from home! Also, along with employment data, we have massive economic data from all developed economies. While we have to keep in mind that in the week ahead China still will be closed on Monday and Tuesday, Let’s take a quick look at the week ahead and the most important data to watch! 

OPEC Meetings – Monday

21st OPEC and non-OPEC Ministerial Meeting (ONOMM) planned for Monday, October 4, to examine oil market developments. Last Wednesday at 29 September, OPEC Joint Technical Committee (JTC) at its 55th meeting via videoconference examined oil market developments. Mohammad Sanusi Barkindo, OPEC Secretary-General, in his speech there, talked about the importance of the efforts by the Declaration of Cooperation (DoC) Participating Countries in accelerating the rebalancing process in the global oil market and told “As we approach the final quarter of 2021, it is clear that this has been a year of recovery,” On Monday, the energy market will be caution and wait for Meeting announcement. 

 Interest rate Decision and Statement in Australia – Tuesday

The latest outbreak of coronavirus had some effects on economic recovery, not just in Australia, also in the US, UK, EU, and especially in China, which directly affects the Australian economy. That’s why we are not expecting to see any changes in the ongoing dovish policies of the Reserve Bank of Australia. RBA is expected to hold the Rates and Asset Purchasing amount at its current levels. This policy is expected to hold the pressure on Aussie. 

ISM Non-Manufacturing PMI – Tuesday

The acceleration in the Delta case, as I mentioned earlier affected the global economy, including the US economic recovery. This negative effect cause weakness in the ISM services index to fell to 61.7 in August from 64.1 in July. This weakness more than everything telling us that service providers are still under pressure by labor shortages and rising input costs due to supply chain dislocations. However, as we see the index is always above 50, which indicates a solid pace of expansion in the service sector. The expected data will support the Hawkish policies fans and will put the US stock markets under pressure. 

Interest Rate Decision and Monetary policies in New Zealand – Wednesday 

While in the last meeting we were waiting for continuing the hawkish policies that had already begun earlier in 2021, a suddenly renewed COVID outbreak, dissuaded the Reserve Bank of New Zealand (RBNZ) to have more tightening policies. For this week, since COVID cases are now under control, the economic outlook look is brighter, and inflation expectation is rising, market participants are expecting 50 bps of rate hikes before the end of this year, which will increase the RBNZ rates up to 0.75%. These expected hawkish policies are supposed to lift the Kiwi to higher levels against its crosses. 

US None Farm Payrolls – Friday

In August we had unemployment rates fall to 5.2%, however, the US created just 235K, new jobs, which was well below consensus expectations. At the same time, in the past three weeks, we had improvement in the Initial Jobless Claims numbers. These all together reduced the market expectations to 460K jobs for September. Also, unemployment benefits payment ended on September 6, which should be another encouragement for employees, to start looking for jobs. So we expect to see the jobless rate drop to 5.0% and help the US Dollar Index increase above the 94 mark. – thanks for being us and hope you will have an amazing week.

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