A packed week ahead ensures plenty of volatility

October 30, 2017

A week full of announcements and events away from raw economic data ensures that there will be plenty for investors to sink their teeth into.

The Euro weakened further in Friday trading as the Catalonian independence crisis deepens, with the Spanish city declaring they wish to become independent from the rest of Spain. The US posted a big beat when they released GDP data late on Friday (3% vs 2.6% expected) likely played a part in a strengthening of the USD/weakening of the Euro. It has since bumped up slightly, back above the $1.16 level, where it currently sits at $1.1605.

US and European stock indexes all finished the week strongly. The NASDAQ had a field day last Friday, surging an astonishing 2.20% (+144.49 points) to end the session at 6,701.26. The S&P 500 had a solid session, adding 20.67 points (+0.81%) to close at 2,581.07. The Dow took a surprising backseat as it only gained 33.33 points (+0.14%) by the end of trading, to close at 23,434.19. European stocks posted solid gains, the DAX up 84.26 points (+0.64%) to 13,217.54 and the FTSE adding 18.53 points (+0.25%) to close at 7,505.03.

Gold found some friends last week as uncertainty surrounding Spain played on investor’s minds. It is currently trading at $1,273.10, up from $1,267.30 this time last Friday.

Looking ahead to the rest of the week and there is plenty going on around the world that can cause a fair amount of volatility. US companies continue to release earnings results, uncertainty surrounding Spain enters yet another week and Donald Trump names his pick as the next Fed Chair.

The most significant events for the week include:

Today – US Personal Spending & Core PCE Price Index, UK Net Lending to Individuals, German Retail Sales, German Prelim CPI, Spanish Flash CPI & GDP

Tuesday – China Manufacturing & Non-Manufacturing PMIs, BoJ Policy Rate & Monetary Policy Statement, US CB Consumer Confidence, European CPI & Core CPI Flash Estimate

Wednesday – UK Manufacturing PMI, US ADP Non-Farm Employment Change, ISM Manufacturing PMI

Thursday – US Federal Funds Rate & FOMC Statement, Australian Trade Balance, UK Construction PMI, UK Official Bank Rate & BoE Inflation Report

Friday – Australian Retail Sales, UK Services PMI, US Non-Farm Employment Change, Average Hourly Earnings and ISM Non-Manufacturing PMI