The next week on the markets looks interesting as it will be a week packed with top-tier macro events. Traders will be offered rate decisions from the European Central Bank as well as Bank of Canada. Moreover, US GDP report for Q3 2023 will be released on Thursday. Last but not least, a set of flash PMI indices for October will be released on Tuesday. Be sure to watch EURUSD, USDCAD and DE30!
EURUSD
EURUSD, the main currency pair, is likely to experience elevated volatility next week, especially on Thursday. This is because traders will be offered a rate decision from the European Central Bank at 1:15 pm BST as well as flash release of US GDP data for Q3 2023 at 1:30 pm BST. ECB is rather unlikely to change the level of interest rates but guidance on whether such moves are still being considered will be key. When it comes to US GDP data, a significant acceleration is expected compared to Q2 2023 with annualized growth seen picking up from 2.1% to 4.1%.
USDCAD
CAD traders will stay on guard on Wednesday as Bank of Canada is scheduled to announce rate decision on 3:00 pm BST. It is expected that Canadian central bankers will decide to keep the main rate unchanged at 5.00% for the second meeting in a row. There are good reasons behind such expectations - growth outlook has deteriorated somewhat, inflation is slower-than-expected and higher bond yields serve as a kind of substitute for rate hikes. However, some hawkish guidance that leaves the door open for more rate hikes is likely to be offered.
DE30
While the ECB meeting scheduled for Thursday has a potential to move European indices, stock market benchmarks from the Old Continent may also see some more volatility on Tuesday when flash PMI indices for October are released. As usual, attention will be mostly paid to releases from France and Germany. A slight improvement is expected in the manufacturing sector. However, manufacturing indices from both countries are expected to remain below 50 pts expansion-contraction threshold.
