Weekly Outlook: October 15 - 19

Release Time:2018-10-15 02:04

After a week which saw a rout in global equity markets triggered by fears over rising bond yields, concerns about global growth and an escalating trade war there’s a lot on this week’s calendar to keep investors on edge. On Wednesday investors will get the chance to review the minutes of the Federal Reserve’s September meeting, when it raised rates for a third time this year. The minutes come in the wake of President Donald Trump’s criticism of the central bank’s recent rate hikes. Investors will also get updates on U.S. retail sales, industrial production and the health of the housing market. Outside the U.S., Italy’s budget is likely to remain in focus, while investors will be monitoring the pound ahead of a crunch European Union summit on Brexit on Thursday. The UK is also set to release figures on employment, inflation and retail sales this week. Meanwhile, China is to release what will be closely watched data on third quarter growth on Friday, amid concerns about the global economic outlook and the ongoing trade spat between Washington and Beijing. The dollar rebounded against a currency basket on Friday, snapping three days of declines as a sense of calm returned to U.S. stock markets with investors looking ahead to the third quarter earnings reporting season.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.26% at 94.94 late Friday. The index had hit a seven-week high of 95.84 on Tuesday as the yield on 10-year Treasury notes hit seven year highs spurred by worries over the impact of rising interest rates. Gains in the greenback saw the euro and the pound retreat from multi-week highs. 

EUR/USD was down 0.29% to 1.1559 late Friday, off an almost two-week peak of 1.1609.

GBP/USD was down 0.59% to 1.3154 after reaching a three-week high of 1.3258 overnight as speculation continued over whether Britain will secure a deal before its exit from the EU. The dollar was little changed against the safe haven yen late Friday, with USD/JPY at 112.19.