Central bank developments will take centre stage on Tuesday, as commentary from the ECB and Fed will move the financial markets.
European Central Bank President Mario Draghi will deliver a speech at 09:00 GMT. The ECB announced recently that it will begin to unwind its stimulus program, but that the duration of the bond-buying will likely continue beyond September 2018. The central bank is responding to a much-improved regional economy.
In North America, Federal Reserve Chairwoman Janet Yellen will deliver a speech at 19:30 GMT. Yellen is wrapping up her final months as Fed boss after President Donald Trump announced Jerome Powell as her replacement.
North of the boarder, Bank of Canada (BOC) Governor Stephen Poloz will also deliver a speech on Tuesday. The BOC has been actively raising interest rates this year in response to a booming Canadian economy.
Earlier in the day, the Reserve Bank of Australia (RBA) held its main interest rate at 1.5%, as expected by the great majority of economists.
‘Conditions in the global economy are continuing to improve. Labour markets have tightened and further above-trend growth is expected in a number of advanced economies, although uncertainties remain,’ the RBA said in its official rate statement. ‘Growth in the Chinese economy is being supported by increased spending on infrastructure and property construction, with the high level of debt continuing to present a medium-term risk. Australia’s terms of trade are expected to decline in the period ahead but remain at relatively high levels.’
In terms of economic data, the European Commission’s statistical agency will report on retail sales at 10:00 GMT. Receipts at retail stores are forecast to rise 0.6% in September after falling 0.5% the previous month. This translates into an annualized gain of 2.7%.
In US data, the government will report on consumer credit change for the month of September. Meanwhile, the American Petroleum Institute (API) will report on weekly crude inventories ahead of the official tally on Wednesday.
EUR/USD
The euro was little changed on Tuesday, hovering just north of 1.1600. The pair remains in a tight range, with markets still speculating on the outlook of ECB policy. Investors can, therefore, expect little market movement for the euro without a major fundamental catalyst.
GBP/USD
Cable rose sharply at the start of the week, climbing back above 1.3100 US. The GBP/USD exchange rate was last seen trading at 1.3169. It faces a strong support zone near 1.3030. On the opposite side of the ledger, resistance is likely found just ahead near 1.3200.
USD/CAD
The Canadian dollar has strengthened in recent sessions, with the USD/CAD falling back toward the 1.2700 handle. The pair is down from more than three-month highs as the greenback backtracks against a basket of world peers.
