Themes for the Week and Potential Opportunities
Extremely busy week ahead. To note, there is an informal meeting of OPEC ministers and other oil-exporting countries on the sidelines of the International Energy Forum (Mon to Wed). Media reports suggest that the positions of Saudi Arabia, Iran and Russia are drawing closer to the prospect of accommodation.
USD: focus on the first of 3 presidential debates on Monday 26th at 9 PM EST between Clinton and Trump. The more Trump gains consensus, the weaker the USD should go. Moreover, the closer the race is, the more uncertain it becomes and that spills into USD weakness. Then we have 10 (!) FED official jawboning and pay particular attention to Evans, Harker, Kaplan and Kashkari. Durable goods (Wed) are expected much lower than previous and Personal Spending is also not expected higher. Unclear how much weight the 3rd reading of GDP will have – not much if you ask me.
EUR: Draghi will be on the air frequently during the week and we should watch for any hints at policy easing (or lack thereof). Ger IFO (Mon), Ger CPI (Thur) and EU CPI (Fri) will be watched and further disappointment in inflation is expected.
CAD: Finished last week in bad shape. This week Poloz will be speaking (Monday night) and we will see the first swing at Q3 GDP on Friday.
JPN & CHN: PMI figures could stumble a little (Fri). But interest will also be on the BoJ minutes (Fri).
Going into the week I will be looking for more weakness in Gbp, Nzd & Cad vs. Jpy strength and Eur Resilience. This picture may need re-assessing depending on US output.
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