AUD/USD Weekly Forecast - 17 October – 21 October

Events that marked the week:

From Australia, on Tuesday, NAB Business Confidence and Home Loans figures were released. Australian business conditions picked up in September as sales and profits rebounded while a marked rise in forward orders pointed to further growth ahead, a survey showed on Tuesday. National Australia Bank's monthly survey of more than 500 firms showed its index of business conditions rose one point to +8 in September, to remain above its long-run average. Its index of business confidence held at +6, after bouncing two points in August. Measures of sales and profits both rebounded in the month, with sales hitting a strong +17, though employment fell back three points to +1. Boding well for the outlook was a hefty six point jump in forward orders to a high +8, while the survey's measure of capital spending also climbed to a strong +8.

On Thursday China's Trade Balance figures were released. China’s trade balance fell unexpectedly last month, official data showed on Thursday. In a report, National Bureau of Statistics of China said that Chinese Trade Balance fell to 41.99B, from 52.05B in the preceding month. Analysts had expected Chinese Trade Balance to rise to 53.00B last month. Exports by China eased 5.6% year-on-year in September in yuan terms while imports rose 2.2% from a year earlier, the General Administration of Customs said in Beijing on Thursday in data that compares to a 5.9% year-on-year gain in exports and a 10.8% jump in imports in August.

There were no data releases from Australia on Friday, but from China CPI and PPI figures were released.  Chinese consumer price growth reached a four-month high in September, while producer inflation rose for the first time since 2012, raising optimism that spare capacity in the economy was beginning to ease. The consumer price index (CPI) advanced 1.9% from a year ago, following a 1.3% increase in August, the National Bureau of Statistics reported Friday. A median estimate of economists forecast CPI inflation to improve to 1.6%. Compared to August, consumer inflation climbed 0.7%, following a 0.1% increase the prior month. Economists projected a 0.3% gain over the previous month

A separate gauge of factory-gate prices known as the producer price index (PPI) edged up 0.1% in the 12 months through September. That was the first increase since 2012, ending a stretch of four-and-half years of declining prices. Although Chinese producer prices were in decline for more than four years, the deceleration had eased in recent months. The extent to which factory-gate prices can improve depends largely on the health of the domestic manufacturing sector.

This week markets will be looking at:

Monetary Policy Meeting Minutes (Tuesday 2:30)

China's GDP (Wednesday 4:00)

China's Industrial Production (Wednesday 4:00)

USD - Major events in the week ahead

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.

EUR/USD Weekly Forecast - 10 October – 14 October

Events that marked the week:

From Eurozone, on Monday, Spanish Manufacturing PMI  data was released.  Spanish Manufacturing PMI rose to 52.3 in September, up from 51.0 in August and the highest since April. The reading signalled a solid monthly improvement in the health of the sector. Business conditions have now strengthened in each of the past 34 months. New orders increased for the second successive month in September following a fall in July. Moreover, the rate of expansion was solid and the fastest since April. Panellists reported higher new orders from both domestic and export clients. New business from abroad also rose at a sharper pace during the month.

GBP/USD Weekly Forecast - 10 October – 14 October

Events that marked the week:

Monday's session brought UK Manufacturing PMI data. Conditions in the UK manufacturing sector continued to improve at the end of the third quarter. Rates of expansion in output and new orders accelerated further, rising at rates rarely achieved since the middle of 2014. The domestic market remained a prime driver of new business wins, while the weaker sterling exchange rate drove up new orders from abroad. At 55.4 in September, up from 53.4 in August, the seasonally adjusted Markit/CIPS Purchasing Managers’ Indeks rose to its highest level since June 2014.