The top events next week

1) The BOJ - Wednesday (late Tues in US)

The Fed has had all the hype but this is going to be the big market mover in the week ahead. There were waves of leaks last week but it was all very wishy-washy. Here's some critical background:

  • Preview: The Bank of Japan decision is all about the yield curve
  • Abe economic advisor says Bank of Japan should counter yen appreciation
  • Some BOJ officials still favor increasing JGB purchases
  • BOJ to keep very easy monetary conditions to support economic recovery
  • BOJ may debate deepening negative rates
  • Leaks from Nikkei

2) The FOMC - Wednesday at 2 pm ET (1800 GMT)

The Fed funds market is pricing in a 22% chance of a hike. That rose on Friday after the CPI report was slightly higher than expected. A big focus is also on December, where the market is pricing a 54% hike probability. There isn't much left on the calendar for the Fed to digest so it's all about positioning now and the strength of the US dollar in the past week suggests the market doesn't care what Yellen does Wednesday.

3) RBA Sept meeting minutes Tuesday at 0130 GMT

The market is pricing in a 33% chance of a cut in December as Philip Lowe puts his stamp on the central bank. But there have been mixed messages, including some cryptic talk from the RBA's Kent that's been interpreted as a sign that the RBA might be more firmly on the sidelines than we thought. Lowe is also speaking before Parliament on Thursday.

4) Canadian retail sales and CPI - Friday at 8:30 am ET (1230 GMT)

The BOC downgraded its economic expectations last week and oil is on the fritz once again. The Canadian dollar always seems to be a sideshow and it will be overshadowed next week but the outlook is beginning to darken and the government is talking about doing more to cool housing. Weak inflation or a poor reading on retail sales would put a rate cut squarely on the table around year-end. At the moment, the pricing in January is around 10%.

5) Mark Carney speaks - Thursday at 1700 GMT

The pound was the big mover on Friday as it wilted down to 1.30. The market is pricing in a 27% chance of a cut in December and the data is all over the place. The schedule features Cunliffe and Forbes next week but the main event will be Carney Thursday in Germany. Will he take credit for saving the UK economy again?

Other events to note:

  • China returns from holiday
  • RBNZ meeting Thursday (late Wed in US)
  • Swiss sight deposits Monday

For more, check the economic calendar.