With the Federal Reserve meeting and NFP report release already behind us, one could expect a somewhat calmer week ahead. While coming days will indeed bring less top-tier events compared to the current week, it does not mean that there are no noteworthy releases scheduled. US CPI data for October on Wednesday and UK Q3 GDP report on Thursday are two top readings this week. Be sure to watch GOLD, US2000 and GBPUSD in the week ahead.
GOLD
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Create account Try a demo Download mobile app Download mobile appGold price had a volatile week. Following drops in the first half of the week, a recovery move was launched on Thursday, allowing gold to recover from earlier losses. Today precious metals managed to break back above a key $1,800 area. US CPI data release for October on Wednesday, 1:30 pm GMT will be a key report for gold traders next week. Market expects an acceleration from 5.4 to 5.8% YoY. A beat in CPI data could be negative for gold as it may force Fed to bring forward discussions on rate hikes.
US2000
Taper announcement from the Federal Reserve failed to trigger any major correction on the markets. This should not come as a surprise given that the pace of reduction was in-line with market expectations. However, indices moved to fresh all-time highs after Powell stressed that it is too soon to talk about any rate hikes. Russell 2000 (US2000) outperformed other Wall Street indices as slow progress on Biden's infrastructure bill is also supporting small-caps. US2000 climbed 5% last week and moved above the 2,400 pts mark for the first time in history. However, will bulls have enough steam to extend to move into a new week?
GBPUSD
British pound plunged this week as the Bank of England decided to hold rates unchanged. Market expected a 15 basis points rate hike following recent hawkish comments from BoE Governor Bailey. GBPUSD dropped to the lowest level in over a month. GBP may get a chance to recover on Thursday, when the UK GDP report for Q3 will be released (7:00 am GMT). Median estimate points to a slowdown in economic growth to 1.5% QoQ, down from 5.5% QoQ in Q2 2021. While the Bank of England stayed on hold this week, it has also stressed that interest rates will need to be hiked soon and a strong GDP report could boost odds for a decision in December.
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