The week ahead is marked by the looming deadline of October 17th, when the US economy will reach its debt ceiling. If the U.S. Senate and Congress and the battling groups of Democrats and Republicans fail to reach an agreement on raising the debt ceiling by Thursday, then this will lead to default, nothing short of bankruptcy for the United States, having a catastrophic impact on the American economy itself and generating a domino effect on the worldwide economy and all markets. Because of the sheer magnitude of the havoc that this scenario will provoke, we expect that in the end consensus will be reached and the debt ceiling will be raised, even if this will come in the form of a temporary solution that will raise the debt ceiling for six weeks, allowing room for further negotiations to take place. We also remind binary options traders of another pressing pending issue, that of the non-approval of the U.S. government budget, which has led to a government shutdown since 1st October, at a cost which is estimated to be almost 300 million USD per day!
Developments on these two fronts are expected to bear great influence on world markets, so binary options traders are advised to follow the news and react to what is happening, adjusting their trading decisions accordingly.
We expect that the coming week will be characterized by volatility in the global markets, giving rise to various opportunities for binary options traders. Let us have a closer look at the events that will shape the trading week ahead. Please note are all times noted are GMT.
Due to the fact that Monday is a bank holiday in the US, Canada and Japan, this looks from the outset like a quiet day both in terms of economic developments and news coming in, as well as limited trading volumes being recorded in markets across the globe. Therefore, a day where careful treading is required, with holding your positions and watching things from the sidelines being perhaps the wisest strategy to follow.
The most significant economic data to be released today comes from China at 01:30, when Chinese authorities will publish the latest figures on the country’s inflation rate.
A busy day in terms of economic news and indicators being released sets off in Australia, when the Federal Bank will release at 01:30 the minutes of its latest meeting. Traders should look out for any information regarding the Fed’s plans to cut interest rates in the near future, which could have an impact on the Australian dollar and weaken its position.
Moving onto Europe, at 10:30, the yearly projected inflation rate for the UK will be published. The expected rate for this figure is 2.6% and any significant deviation from this will lead to increased market volatility. Once the news is out, wait for it for a while to sink in and then make your speculations into the corresponding trend direction.
Another important indicator to look out for today is Germany’s ZEW Indicator of Economic Sentiment, which will be out at 09:00. As this is yet another figure that could lead to market volatility, adopt a similar waiting stance and then speculate on the trend that will be shaped for EUR pairs.
Noteworthy economic news might also be generated from the European Union’s Economic and Financial Affairs Council (ECOFIN) meeting which will take place in Luxembourg today, with the main items on the agenda being the “backstop arrangements for banks in the context of the forthcoming asset quality review and stress test exercises and proposed single resolution mechanism”, as well as “an initiative led by the Commission and the European Investment Bank and aimed at facilitating access to finance for SMEs”.
Today will bring the announcement of data from the UK employment office, including the all important unemployment statistics for the British economy. As this is expected to have an impact on how the GBP will fare today, especially in relation to its usual pairs, look out for the numbers and make your High or Low speculation as soon as the trend starts to emerge.
The highlight of the afternoon is the release of the Manufacturing Sales data in Canada at 12:30, which is expected to impact the CAD currency pairs.
High market volatility is expected today in response to the unveiling of retail sales and other associated data in the UK at 08:30, which will affect the performance of the GBP in relation to its pairs. Wait for the trend to set in and make your speculation.
Against the backdrop of the government shutdown and the threat of a default, the deadline for which ends today, in the USA important data will be released today regarding the weekly claims for unemployment benefits (at 12:30), as well as the Philadelphia Fed Manufacturing Index (at 14:00). A day of great volatility for the USD, watch things closely and make any moves with caution and a clear head.
A truly busy day across the board with developments that might lead to high market volatility sets off at 01:00 with a speech by the Governor of the Reserve Bank of Australia Glenn Stevens, whose comments may determine a short-term negative or positive trend for the Australian dollar.
At 2:00, all eyes will be on China for the announcement of important GDP data as well as the Chinese industrial production figures. These indicators are important not only for the bullish or bearish effect on the CNY, but also for the world economy as a whole, and they are expected to shape the all day movements of the stock markets, but also in faring of the Australian dollar, since Australia is a major supplier of raw materials to China.
At 8:35 the Bank of Japan Governor Haruhiko Kuroda will speak in Tokyo and is expected to influence the trading value of the JPY.
The Core Consumer Price Index (CPI), measuring changes in purchasing trends and inflation, will be released in Canada at 14:30 and this is another indicator to look out for today, as it will impact the CAD.