Summary:
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GBP in focus as inflation report comes due
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Unexpected drop signalled by API gives oil bulls hope ahead of DOE reading
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FOMC minutes to be released in the late afternoon
Investors will focus on FOMC minutes on Wednesday but one cannot forget about other readings scheduled. Inflation report from the UK will be published in the morning therefore GBP traders should stay cautious. Double attention may be needed as EU summit starts today and Brexit is going to be one of the major topics. Apart from that, the European inflation reading for September will see daylight at 10:00 am BST but as it is the final revision no major price movements are expected. Last but not least, oil traders will be served weekly piece of data from DOE on oil inventories.
9:30 am BST - UK, Inflation report for September. The labour market report released yesterday boosted GBP as it showed an unexpected acceleration in the wage growth. Now investors’ attention will switch to the inflation report. The UK CPI inflation began to decelerate at the turn of 2017 and 2018 and bottomed in the second quarter. However, we have seen a pick-up since then. Market consensus suggests that the UK price growth eased in September and points for a slowdown to 2.6% YoY (2.7% previously). However, GBP traders should keep in mind that even a significant acceleration is unlikely to trigger any monetary action from the Bank of England prior to Brexit date in March next year.
3:30 pm BST - US, DOE oil inventories. The recent tensions between the US and Saudi Arabia over missing journalist allowed oil prices to halt correction. The sentiment was additionally boosted yesterday as API oil inventory estimates point to a 2.1 mb drop against expectations of a 1mb build. Similar addition to stockpiles is expected to be shown by today’s DOE report therefore if the actual data confirms API estimates we may see oil prices grinding higher in the afternoon.
7:00 pm BST - US, FOMC minutes. Federal Reserve will release minutes from the latest policymakers meeting in the late afternoon. The money market odds for a rate hike in December has moved slightly lower in the past couple of days but still stay around 75% at press time. Investors will analyze the paper and try to find remarks that would ensure them that the next hike is on the way this year. Notice that the upcoming meeting on 8 November is likely to be a non event as the Fed already announced it will deliver changes to the level of interest rates on the quarterly meeting followed by the press conference.
Central bank speakers scheduled for today:
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8:30 am BST - ECB’s Praet
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2:15 pm BST - BOE’s Cunliffe
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5:10 pm BST - Fed’s Brainard
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5:30 pm BST - Bundesbank President Weidmann
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6:00 pm BST - BOE’s Broadbent
Major US companies reporting earnings today:
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US Bancorp (USB.US)
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United Rentals (URI.US)
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Abbott Laboratories (ABT.US)
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Kinder Morgan (KMI.US)
OIL bulls managed to defend the breakout zone ranging $79.50-80.50. The commodity price moved higher yesterday being boosted by US-Saudi tensions and unexpected drop drop in inventories signalled by API. Source: xStation5
