Virus situation and expectations ahead of December's Fed meeting will remain key themes in the markets next week. More data on effectiveness of available treatments and vaccines against Omicron should arrive in the coming days while the US CPI print will be a final piece of key US data ahead of the FOMC meeting scheduled for December 15. Be sure to watch EURUSD, US100 and AUDCAD next week!
EURUSD stabilized near the 1.1300 area. With the NFP report for November out of the way, markets attention shifts to another key piece of data for the Federal Reserve - US CPI report for November scheduled for Friday, November 10 (1:30 pm GMT). Release will come just a few days ahead of Fed's December meeting during which a decision on accelerating taper may be made. Market expects another acceleration in the US consumer price growth so the Fed may get even more reasons to act quickly.
Omicron triggered a drop on equity markets and global indices still have not fully recovered from a sell-off. Markets are slowly getting accustomed to new pandemic situations and more data on effectiveness of available vaccines against Omicron should be available soon. However, risk moods are still prone to swing on virus-related headlines until the situation becomes more clear. Nasdaq-100 (US100) has been more resilient during a recent sell-off than other Wall Street indices but has also dropped around 7% off a recent all-time highs.
AUDCAD has been trading in a downtrend since February this year. The pair has recently broken to a fresh 19-month lows. Both the Reserve Bank of Australia (Tuesday, 3:30 am GMT) and Bank of Canada (Wednesday, 3:00 pm GMT) will announce rate decisions next week. Neither one is expected to change the level of rates but some important guidance may be offered, especially given a recent hawkish shift from Fed officials like Powell. However, it cannot be ruled out that both RBA and BoC will want to wait until the Fed actually takes action at the meeting in mid-December.