The passing week saw significant volatility in the markets. On one hand, we observed a slump in oil prices following signals of de-escalation between the US and Iran, while on the other, rising yields in the US and turmoil on Wall Street following the resignation of Nvidia's CEO. Next week will be dominated by inflation readings, consumer data, and quarterly reports from giants, including the aforementioned Nvidia, which is why investors' attention will focus on US100, GBPUSD, and USDJPY.
US100
The main test for the Nasdaq 100 will be Tuesday's earnings report from Nvidia after the market close. Following Jensen Huang's departure during the passing week and Colette Kress taking the helm, the market is looking for confirmation of strong AI demand, similar to the succession at Apple or corrections from 2024–2025. The market will focus on hard data and revenue forecasts. Volatility will also be boosted by Tuesday's US retail sales data and reports from Walmart, Home Depot, and Target.
GBPUSD
The pound is finishing the passing week near 1.32, mainly due to the dollar's strength, despite the BoE's recent rate hike to 4.00%. Next week, Tuesday's unemployment data and Wednesday's CPI inflation in the UK will be key. As the 2022–2023 cycle showed, persistent service inflation forces the BoE into a hawkish stance: higher CPI inflation alongside potentially weaker US retail sales (Tuesday) or a softer Philly Fed reading (Thursday) could spark a rebound in GBPUSD.
USDJPY
The USDJPY pair enters next week near the 160 level, which was last seen in early September. The dollar's rise against the yen stems from increasing yields and mixed economic data out of Japan. Maintaining the exchange rate in this territory raises the risk of currency intervention from Tokyo, similar to actions taken in 2022, 2024, or July of this year after surpassing 160. Key catalysts will include Monday's GDP and Friday's CPI data from Japan, alongside US data releases (retail sales, jobless claims, and the Univ. of Michigan sentiment index).
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