Summary:
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Turkish CPI inflation to accelerate further
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UK services PMI expected to move slightly lower
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DOE oil inventory report viewed to show bigger build than API data
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Several Fed members to deliver speeches today
Investors will be served several crucial readings on Wednesday. CPI inflation from Turkey will come into spotlight in the morning while the UK services PMI will be released not long afterwards. Moving on, investors will focus on the ADP employment change estimates ahead of the NFP report released that will be released on Friday. Non-manufacturing ISM may raise some concerns in case it follows into manufacturing counterpart’s footsteps and moves lower. Last but not least, oil traders will focus on the DOE data to see whether change in inventories allow to continue rally on the oil market.
8:00 am BST - Turkey, CPI inflation for September. Rout on the Turkish currency market eased after President Erdogan signalled that court will decide on the fate of the US pastor on October 12. However, while this may be a solution to the Turkish diplomatic problems one cannot forget about fundamental problems. Spiking inflation greatly deteriorate outlook on the Turkish assets and until it is contained any improvement may be questioned. CPI inflation is expected to move from 17.90% YoY to 21.10% YoY in September.
9:30 am BST - UK, Services PMI for September. The UK PMI readings for September were equivocal so far. The manufacturing gauge moved higher beating expectations while the construction index missed forecasts and pushed lower. However, the services sector accounts for the biggest share of the UK GDP what is usually the case for developed countries. Having said that, today’s reading may have significant impact on the GBP in case it shows a noticeable deviation from the estimates. Market consensus point for a minor drop from 54.3 pts to 54 pts.
1:15 pm BST - US, ADP Employment Change for September. As NFP report for September is going to be published this Friday ADP is releasing its employment change estimates today. Market consensus suggests that the reading will show 184k increase in September. Traders may use this data to adjust their expectations ahead of the official labour market report (NFP).
3:00 pm BST - US, ISM Non-manufacturing for September. The manufacturing ISM published on Monday pulled back missing market expectations. However, it should be noted that it moved lower from elevated levels therefore it should not be viewed solely as a major warning signal. Nevertheless, in case today’s services ISM reading shows similar development some concerns may be raised. Economists surveyed by Bloomberg point for a drop from 58.5 pts to 58 pts.
3:30 pm BST - DOE weekly crude oil stocks. Stunning rally on the oil market was put on hold yesterday as Brent pulled back below the $85 handle and WTI moved below previous breakout level at $75.30. The pullback may be associated with news that China is going to boost its imports of West African crude to the highest level in seven years. DOE report is expected to show a 1.9 mb increase after API estimates pointed to 0.9 mb build yesterday.
Central bank speakers scheduled for today:
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11:30 am BST - Fed’s Evans
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1:05 pm BST - Fed’s Barkin
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7:00 pm BST - Fed’s Brainard
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7:15 pm BST - Fed’s Mester
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9:00 pm BST - Fed’s Powell
EURUSD started a downward move following FOMC meeting. Nevertheless, after moving to the lower bound of the consolidation range the pair were unable to break lower. Source: xStation5
