Market Stagnation as Events Approach, Focus on U.S. GDP Data
Cautious Market Mood The USD/JPY is trading steadily around 153 yen. Key events to watch this week include tomorrow’s Bank of Japan monetary policy meeting results, Friday’s U.S. employment report, and next week’s U.S. presidential election. Ahead of these events, the USD/JPY pair seems to be in a wait-and-see mode.
Stock Market and Middle East Situation In the stock market, the Nasdaq index has reached a new high. The Middle East situation appears to be stabilizing, contributing to a decline in oil prices. Additionally, expectations for additional economic stimulus measures from China ahead of the National People’s Congress and Japan’s political landscape gradually stabilizing are reducing market volatility. It seems the market is searching for the next catalyst.
Key Economic Indicators Today, a series of U.S. economic indicators will be released:
- MBA Mortgage Applications Index (10/19 – 10/25)
- ADP Employment Change (October)
- Real GDP Advance Estimate (Q3)
- Pending Home Sales Index (September)
Particularly noteworthy is the advance estimate for U.S. GDP, with a forecast of a 2.9% annualized increase, which is nearly unchanged from the previous 3.0%. Personal consumption is expected to rise by 3.3%, exceeding the previous 2.8%. Market attention is focused on whether growth can be maintained while prices stabilize. The impacts of hurricanes and strikes by large corporations are somewhat priced in, so as long as there isn’t a significant downside surprise, the report is expected to pass smoothly.
European Economic Indicator Releases A series of economic indicators will also be released in Europe:
- France GDP Advance Estimate (Q3)
- Germany Employment Statistics (October)
- Germany GDP Advance Estimate (Q3)
- Eurozone Consumer Confidence Index (Final) (October)
- Eurozone Economic Sentiment Index (October)
- Eurozone GDP Advance Estimate (Q3)
- Germany Consumer Price Index (Preliminary) (October)
Upcoming Speeches and Events The following individuals are scheduled to speak:
- Thomas Jordan, President of the Swiss National Bank
- Jeremy Hunt, UK Chancellor of the Exchequer, presenting the budget
- Isabel Schnabel, ECB Executive Board Member
- François Villeroy de Galhau, Governor of the Bank of France
- Joachim Nagel, President of the Bundesbank
- Tiff Macklem, Governor of the Bank of Canada, and Roger W. Rogers, Senior Deputy Governor of the Bank of Canada
The UK Chancellor’s budget is expected to include tax increases, with expectations for medium- to long-term fiscal stimulus. The impact on the pound is not anticipated to be as negative as before.
U.S. Major Corporate Earnings A number of U.S. corporate earnings reports are also scheduled for today:
- Meta Platforms
- Eli Lilly
- Coinbase
- Microsoft
- Starbucks
- DoorDash
- Caterpillar and Amgen, among others
Market Strategy
- Cryptocurrencies: Following reports of Trump’s lead, buying sentiment continues to prevail.
- Euro: With Germany’s GDP rebounding to +0.2% and the Consumer Price Index showing upside surprises, buying momentum is building. The strategy will maintain a bullish outlook today.
