Week-ahead outlook: How will US Midterm Elections, Payrolls and the BoE shape markets?

Renewed buying lifted the US Dollar (USD) this week, ending two successive declines and bringing it close to its key 200-week SMA. Support for the Greenback came from persistently rising crude oil prices, with no apparent resolution to the Middle East crisis in sight. The Federal Reserve’s hawkish stance at its October 28 meeting also underpinned the currency’s rebound.

Solid gains took the US Dollar Index (DXY) towards 102.00 at the end of the week, leaving it slightly below its weekly peak near 102.50. Opening the US 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. Scheduled for November 4 are the regular MBA Mortgage Applications figures, followed by the ADP Employment Change report, Balance of Trade data, the final S&P Global Services PMI, the ISM Services PMI and the EIA’s weekly US crude oil stockpile report. Alongside Challenger Job Cuts, the regular weekly Initial Jobless Claims figures are expected on November 5. Rounding off the calendar on November 6 are the NFP, Unemployment Rate and preliminary U-Mich Consumer Sentiment reading.

Extending the previous week’s losses, EUR/USD returned to the region of 17-month lows near 1.1100. A short-lived rebound on Thursday then took the pair just above 1.1200. November 2 brings Germany’s Retail Sales and the final S&P Global Manufacturing PMI readings for Germany and the Euroland. Due on November 4 is the final S&P Global Services PMI for the EMU and Germany, ahead of the euro bloc’s preliminary Inflation Rate. The S&P Global Construction PMI for Germany and the Eurozone is scheduled for November 5, followed by Germany’s Factory Orders and the bloc’s Producer Prices. Germany’s Industrial Production and the EMU’s Producer Prices complete the schedule on November 6.

A third straight weekly advance carried GBP/USD into the 1.3430 region, marking six-week highs. The UK releases begin on November 2 with the final S&P Global Manufacturing PMI, ahead of the final S&P Global Services PMI on November 4. Following the S&P Global Construction PMI on November 5, the Lloyds House Price Index and BBA Mortgage Rate will round off the UK calendar on November 6.

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

A modest weekly gain allowed AUD/USD to sustain its recovery and cement its break above 0.7000. Australia’s calendar opens on November 2 with the final S&P Global Manufacturing PMI, followed by preliminary Building Permits and Private House Approvals figures. Scheduled for November 3 are the Ai Group Manufacturing Index and the final S&P Global Services PMI. Household Spending data follow on November 4, ahead of Balance of Trade figures on November 5.

Which policymakers are set to offer their economic views?

• November 2 brings remarks from the Fed’s Goolsbee.
• Remarks from the BoC’s Macklem are scheduled for November 3, followed by the ECB’s Machado and Donnery.
• November 4 features a speaking engagement for the ECB’s Lane.
• On November 5, remarks from the Fed’s Hammack and Barkin precede those from the ECB’s Lagarde, Schnabel and Lane.
• Scheduled speakers on November 6 include the Fed’s Logan, Williams, Musalem and Bowman, followed by the ECB’s Donnery and the BoE’s Pill.

Which central bank meetings will shape monetary policy next?

• November 3 brings the RBA’s interest rate decision (25 bps hike).
• On November 4, policy meetings are scheduled for the Riksbank (25 bps hike) and the National Bank of Poland (unch).
• November 5 begins with a meeting of the Norges Bank (unch), followed by the BNM (unch), the BoE (25 bps hike) and Banxico (unch).