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The Week Ahead – The Presidential Election, COVID-19, and Brexit to Drive the Markets

For the Dollar:

It’s another busy week ahead on the economic data front.

At the start of the week, the manufacturing sector PMI numbers for October will influence. With both the Markit’s finalized and the market’s preferred ISM Manufacturing PMI due out, expect the ISM figure to have the greatest influence.

The focus will then shift to a busy Wednesday.

ADP nonfarm employment change figures are due out along with the all-important ISM Non-Manufacturing PMI.

Factory orders, trade data, and finalized Markit PMI numbers will likely have a muted impact in the week.

On Thursday, the weekly jobless claims figures will also draw plenty of interest ahead of labor market figures on Friday.

With concerns over the labor market recovery lingering, expect plenty of sensitivity to the NFP numbers and unemployment rate.

Away from the stats, the U.S Presidential Election will be a key diver in the week. To add to a likely pickup in market volatility is the FOMC monetary policy decision and press conference on Thursday.

The Dollar Spot Index ended the week up by 1.37% to 94.038.

For the EUR:

It’s also another busy week ahead on the economic data front.

On Monday, Manufacturing PMIs for October are in focus. PMIs include those for Italy and Spain and finalized PMIs for France, Germany, and the Eurozone.

On Wednesday, Services PMIs are due out, which will likely draw greater interest. The surge in new COVID-19 cases across the EU is likely to further derail the service sector recovery.

The market focus will then shift to German factory orders and industrial production figures due out on Thursday and Friday.

While we can expect plenty of influence from the numbers, expect COVID-19 and U.S politics will be the key drivers. News from the weekend of plans to lockdown England for 4-weeks will test support for the Pound at the start of the week.

The EUR/USD ended the week down by 1.80% to $1.1647.

For the Pound:

It’s a relatively busy week ahead on the economic calendar.

On the economic data front, finalized October private sector PMIs on Monday and Wednesday will draw interest.

Expect any revisions to influence ahead of October’s construction PMI on Wednesday.

The main event of the week, however, is the Bank of England monetary policy decision on Thursday.

We’ve heard the talk of negative rates and the UK continues to get hit by the 2nd wave of the COVID-19 pandemic.

Will the BoE hold off until there is clarity on Brexit or make a move? The markets are expecting the BOE to stand pat on interest rates this time around…

Away from the economic calendar, there’s Brexit and the U.S Presidential Election. Expect a Joe Biden victory to be Pound negative.

The GBP/USD ended the week down by 0.71% to $1.2947.

For the Loonie:

It’s a relatively quiet week ahead on the economic calendar.

Economic data include September trade figures and October employment numbers and Ivey PMI.

Expect October employment figures to have the greatest impact in the week.

From elsewhere, private sector PMIs from China, the Eurozone, and the U.S, the U.S Presidential Election, and COVID-19 will also be in focus.

The Loonie ended the week down by 1.49% to C$1.3321 against the U.S Dollar.


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