USD - Major events in the week ahead

Sunday, Oct 16 2016

Events that marked the week:

Focus of the Wednesday's US session was on FOMC Meeting Minutes. U.S. central bankers debating the merits of raising interest rates last month described the decision as a close call, with several saying a rate hike was needed “relatively soon,” minutes of the September meeting showed. “Several members judged that it would be appropriate to increase the target range for the federal funds rate relatively soon if economic developments unfolded about as the committee expected,” the minutes from the Sept. 20-21 gathering in Washington showed. “It was noted that a reasonable argument could be made either for an increase at this meeting or for waiting for some additional information on the labor market and inflation.” “Among the participants who supported awaiting further evidence of continued progress toward the committee’s objectives, several stated that the decision at this meeting was a close call,” the minutes stated.

Thursday was marked by Unemployment Claims figures. In the week ending October 8, the advance figure for seasonally adjusted initial claims was 246,000, unchanged from the previous week's revised level. The 4-week moving average was 249,250, a decrease of 3,500 from the previous week's revised average. This is the lowest level for this average since November 3, 1973 when it was 244,000. The previous week's average was revised down by 750 from 253,500 to 252,750. There were no special factors impacting this week's initial claims. This marks 84 consecutive weeks of initial claims below 300,000, the longest streak since 1970.

On Friday Retail Sales, PPI and Consumer Sentiment figures were released. Retail sales climbed in September by the most in three months, showing American shoppers began to spend freely again after shying away from merchants earlier in the quarter. The 0.6 percent advance followed a revised 0.2 percent decline in August, Commerce Department figures showed Friday. So-called core sales, used to calculate gross domestic product, rose a smaller-than-projected 0.1 percent. Years of increased hiring and a slow acceleration in worker pay have laid a foundation for steady household spending. While third-quarter purchases will probably fall short of the vigorous pace from April through June, the broad-based pickup across the retail spectrum shows household demand may be gathering pace.

The Producer Price Index for final demand rose 0.3 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in August and declined 0.4 percent in July. On an unadjusted basis, the final demand index increased 0.7 percent for the 12 months ended in September, the largest 12-month rise since advancing 0.9 percent in December 2014. In September, over three-quarters of the advance in final demand prices can be traced to a 0.7 percent increase in the final demand goods index. Prices for final demand services inched up 0.1 percent.

Consumer confidence unexpectedly fell to a one-year low in October as Americans soured on the outlook for the economy amid a contentious presidential election campaign. The University of Michigan preliminary index of sentiment declined to 87.9 from 91.2 in September, according to a report Friday. That was weaker than the lowest estimate in a Bloomberg survey of economists. Long-term inflation expectations declined to a record low.

This week markets will be looking at:

Empire State Manufacturing Index (Monday 14:30)

Industrial Production (Monday 15:15)

CPI (Tuesday 14:30)

Building Permits/Housing Starts (Wednesday 14:30)

Philly Fed Manufacturing Index (Thursday 14:30)

Unemployment Claims (Thursday 14:30)

Existing Home Sales (Thursday 16:00)

More in this category: « US Consumer Sentiment dropped to 87.9 UK house prices up by 0.9% »