Next week's key events include US employment indicators, developments at the Federal Reserve, policy decisions by the ECB and Bank of Japan, and the Reserve Bank of Australia's decision. Attention is focused on the possibility that these announcements will affect the foreign exchange market. Market activity is expected to pick up next week in response to the data and meetings in each region.
In North America, the US September employment report will be released next week, and the market reaction is expected to be the focus. Markets are increasingly pricing in a rate hike by year-end, and the outlook could change depending on the employment report. In addition to the US employment report, remarks by senior Federal Reserve officials are expected to be watched for indications concerning labor-market stability.
In Europe, attention is focused on preliminary September consumer price index and unemployment rate data for the euro area and Germany, as well as a speech by ECB President Christine Lagarde. These will be watched as factors that could influence the ECB's monetary policy stance and the rate hike outlook, while price trends in the euro area could affect market pricing for interest rates.
In Asia and Oceania, the Bank of Japan's minutes, the Reserve Bank of Australia's policy decision, and price indicators for Japan and Australia are scheduled for release. Markets almost universally expect the Reserve Bank of Australia to raise rates by 0.25 percentage points, and its statement and the governor's remarks are expected to be examined for indications of the possibility of further rate hikes.
In emerging markets, indicators from South Africa, Mexico and Turkey are expected to be watched as market-moving factors. South Africa's August PPI and trade-related statistics could provide clues to the direction of monetary policy.