Wall Street opens as usual this Monday, but the US bond market remains closed for Columbus Day. Tokyo and Toronto are also taking the day off. The week therefore starts slowly, before Wednesday, when US inflation could revive—or bury—the idea of another Fed rate hike as early as October.
In brief
- On Wednesday, October 14 at 2:30 p.m., September US CPI is expected at 3.6% year-on-year, up from 3.4%. The index excluding energy and food will be closely watched.
- Last Friday, Canada lost 68.3k jobs, while the consensus had expected 6.1k new jobs. Tiff Macklem, Governor of the Bank of Canada, is speaking twice this week.
- On October 8, futures were pricing in only around a 19% chance of a 25-basis-point hike at the October 27–28 FOMC meeting.
Core inflation will decide the outcome
The headline figure is unlikely to surprise anyone. According to MUFG, cited by investingLive, the rise in inflation since the conflict between the United States and Iran began has come almost entirely from energy. Oil and rate expectations are therefore moving in tandem.
Everything will come down to the rest of the basket. For the Japanese bank, a core CPI figure in line with consensus would leave the dollar and Treasury yields within their current ranges. Another 0.3%, as in August, would revive bets on a second consecutive hike and push short-term rates higher.
The Cleveland Fed’s nowcast, updated on October 9, is in line with consensus. The Edgyx economic calendar puts the headline figure at 0.6%. Keep in mind the measured impact of monthly CPI on dollar pairs.
US households, meanwhile, are far from reassured. On Friday, the University of Michigan Consumer Sentiment Index fell to 46.3, versus the expected 47.5. Their inflation expectations rose to 4.7%. A gloomy consumer expecting to pay more: that is enough to put a central bank in an awkward position.
Another factor: Kevin Warsh has distanced himself from forward guidance, the signals the Fed sends about its next decisions. During his Jackson Hole speech, he said markets should not expect the Fed to provide their next trade. The result: without an official compass, the data do the talking.
When the Fed stops saying where it is going, every release becomes a clue. The market reacts more strongly, and more quickly.
The schedule, day by day
All times are given in Paris time.
| Day | Time | Release | Forecast | Previous |
|---|---|---|---|---|
| Wed. 14 | 2:30 p.m. | US CPI, year-on-year | 3.6% | 3.4% |
| Wed. 14 | 2:30 p.m. | Core CPI, year-on-year | 2.5% | 2.4% |
| Thu. 15 | 2:30 a.m. | Australian employment | 20.0k | 39.5k |
| Thu. 15 | 8:00 a.m. | UK GDP, month-on-month | -0.1% | — |
| Thu. 15 | 2:30 p.m. | US retail sales | 0.3% | 1.2% |
| Thu. 15 | 2:30 p.m. | Retail sales excluding autos | 0.5% | 1.4% |
| Thu. 15 | 2:30 p.m. | PPI, month-on-month | 0.5% | — |
| Thu. 15 | 2:30 p.m. | Core PPI, month-on-month | 0.3% | — |
| Thu. 15 | 2:30 p.m. | Philly Fed | 26.5 | 37.8 |
| Thu. 15 | 2:30 p.m. | Jobless claims | 195k | 197k |
Monday: Thin market conditions
No major federal data are due today. The risk comes from elsewhere. investingLive notes that with the bond market closed, Tokyo and Canada on holiday, and yields at their highest level in 24 years, the slightest headline about Iran could trigger excessive moves. Oil would react first, with bonds following only on Tuesday. Gold has moved back above $4,200 an ounce in Asia, lifted by hopes of a truce that the site considers fragile.
Tuesday: Banks take the lead
JPMorgan and Goldman Sachs report earnings, followed on Wednesday by Bank of America and Morgan Stanley. For index traders, this is the first test before inflation.
Wednesday: Central bankers take center stage
Christine Lagarde speaks at 4:10 a.m. and again at 10:30 a.m. Andrew Bailey follows at 7:30 a.m., with Tiff Macklem at 8:05 a.m. Then everything stops at 2:30 p.m. for CPI.
Thursday: The busiest day
Australian employment leads the way at 2:30 a.m., in the same week as the RBA minutes. Martin Schlegel, Chairman of the Swiss National Bank, speaks at 6:30 a.m. At 8:00 a.m., UK GDP is expected to fall 0.1%; consult the measured reaction to UK GDP before taking a position on sterling. Bailey speaks again at 9:30 a.m. At 2:30 p.m., six US figures are released simultaneously. Strong retail sales would confirm, according to MUFG, that the economy is absorbing monetary tightening.
Friday: Warsh at dawn
Bailey speaks at 4:00 a.m., Warsh at 5:30 a.m., and Macklem at 6:15 a.m. The Fed chair will therefore speak before London even opens. For MUFG, his remarks could shift expectations in either direction ahead of the FOMC meeting at the end of October. Next Monday brings Canadian inflation at 2:30 p.m., followed by New Zealand CPI at 11:45 p.m.
The assets on the front line
- Dollar and EUR/USD. The dollar index was trading around 102 on October 8, near its 18-month high. FXEmpire is watching the 1.11–1.12 zone on euro-dollar.
- Gold. It tracks real yields. A stronger-than-expected core CPI would put it under pressure, as would a drop in oil prices.
- USD/CAD. A double test: Canadian employment fell well short of expectations, Macklem is speaking twice, and Canadian CPI is due on Monday.
- Sterling. Falling GDP and four Bailey appearances in four days: GBP/USD can move as much on words as on figures.
- AUD/USD. Unemployment is expected to remain stable, but the pair will also feel the knock-on effect of the previous day’s CPI.
- US indices. Bank earnings and inflation arrive within forty-eight hours of each other.
Your plan before Wednesday
Write down two scenarios before 2:30 p.m., not afterward. Focus on a single decisive variable: the core CPI reading. For each scenario, note the pair you are targeting, the expected direction, and the level that would invalidate the idea.
Let the first few minutes pass. Spreads widen, and wicks sweep tight stops. If your strategy has you entering near the release, widen the stop and reduce the position size to keep the same euro risk. Do you trade for a prop firm? Review its rules: some prohibit opening or closing a position around high-impact releases.
A journal worthy of the week
A week like this quickly fills a journal. The key is to record the right information. Tag every trade linked to a release as “news.” Record the spread at entry and slippage at exit. Copy the scenario you wrote before the release, then compare it with what you actually did.
After a few months, the answer becomes clear: do your trades around releases make money after actual costs? If not, the most profitable rule may be to stay flat from 2:25 p.m. to 2:45 p.m. The trading journal guide explains how to organize these tags.
On Edgyx, the economic calendar displays the measured impact of each release, while the Ora coach compares your trades with the releases to isolate what you gain—or lose—on news days.
Key takeaways
- Wednesday’s core CPI will set the tone for the week. A 0.3% reading would revive the prospect of an October Fed hike.
- Thursday brings Australian employment, UK GDP, and six US figures at 2:30 p.m.
- Warsh speaks Friday at 5:30 a.m. Without forward guidance, his tone on inflation matters more than any signal on the calendar.
- Liquidity is thin on Monday: US bonds are closed, and Tokyo and Canada are on holiday.
- Before every release, write down your scenarios, adjust your position size and stop, then record the spread and slippage in your journal.
