Macro data published last week showed that inflation in the world, including in its most economically developed regions, continues to grow. Thus, according to the data presented, annual consumer inflation in the UK has reached a new multi-year high of 10.1%, in the eurozone - 9.9%, in Canada - 6.9%. The CPI consumer price index for the United States, published a week earlier, also indicated a high inflation rate of 8.2% (in annual terms).

Meanwhile, high geopolitical tensions remain in the world, the western political world is being shaken by intra-party conflicts, while elections of a new prime minister are expected in the UK next week. Among the features of trading in the foreign exchange market, I would like to note that the USD/JPY pair took the level of 150.00, which, as market participants believed, the Bank of Japan would protect. However, so far this is not happening – USD/JPY is moving higher to the upside, and the yen continues to weaken rapidly.

Next week, meetings of the three largest world central banks will take place at once - Canada, the eurozone, Japan, and entire blocks of the most important European macro statistics, as well as on China and the USA, will be published. Market participants will also pay attention to the release of important macro statistics for Australia, Germany, and the UK. Thus, the next week promises to be extremely volatile, with a lot of trading opportunities.

As for the dollar, its DXY index maintains positive dynamics and continues to remain in the zone of 20-year highs, not far from the local high of 114.74 reached last month. Surpassing this resistance level will open the way for DXY towards 120.121.00, the 2001 highs.

Monday 24 October

Germany. Index (PMI) of Business Activity in the Manufacturing Sector (preliminary release)

This S&P Global report is an analysis of a survey of 800 purchasing managers, during which respondents are asked to assess the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries and inventories. Since purchasing managers have, perhaps, the most up-to-date information about the situation in the company, this is an important indicator of the state of the German economy as a whole. This sector of the economy forms a significant part of Germany's GDP. A result above 50 is seen as positive and strengthens the EUR, below 50 as negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro.

Previous values: 47.8, 49.1, 49.3, 52.0, 54.8, 54.6, 56.9, 58.4, 59.8, 57.4, 57.4, 57.8, 58.4, 62.6.

Forecast for October: 48.0.

The level of influence on the markets (pre-release) is high.

Eurozone. Composite Index (PMI) of Business Activity in the Manufacturing Sector (preliminary release)

The PMI Business Activity index in the eurozone manufacturing sector (from S&P Global) is an important indicator of the state of the entire European economy. A result above 50 is seen as positive and strengthens the EUR, below 50 as negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro. Previous values: 48.1, 48.9, 49.8, 52.1, 54.6, 56.5, 58.2.

Forecast for October: 48.1.

The level of influence on the markets (pre-release) is high.

Great Britain. Index (PMI) of Business Activity in the Manufacturing Sector and in the Service Sector (preliminary release)

The PMI business Activity index in the UK manufacturing sector (from S&P Global) is an important indicator of the state of the British economy. If the data turns out to be worse than the forecast and the previous value, then the pound is likely to decline sharply in the short term. The data is better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is seen as positive and strengthens GBP, below 50 as negative for GBP.

Previous values: 48.4, 47.3, 52.1, 52.8, 54.6, 55.8, 55.2, 58.0, 57.3.

The level of influence on the markets (pre-release) is high.

The PMI Business Activity Index in the UK services sector (S&P Global) is an important indicator of the state of the British economy. The service sector employs most of the working-age population of the UK, and it accounts for about 75% of GDP. The most important part of the service sector is still financial services. If the data turns out to be worse than the forecast and the previous value, then the pound is likely to decline sharply in the short term. The data is better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is seen as positive and strengthens GBP, below 50 as negative for GBP.

Previous values: 50.0, 50.9, 52.6, 54.3, 53.4, 58.9, 62.6, 60.5, 54.1 ( in January 2022).

Forecast for October: 49.6.

The level of influence on the markets (pre-release) is high.

USA. Business Activity Indices (PMI): Composite, in the Manufacturing Sector and in the Service Sector of the Economy (from S&P Global) for October

The monthly S&P Global report will release (among other data) a composite PMI index and PMI indices in the manufacturing sector and in the services sector of the US economy, which are an important indicator of the state of these sectors and the US economy as a whole. A result above 50 is considered positive and strengthens the USD, below 50 is considered negative for the US dollar. The data above the value of 50 indicate an acceleration of activity, which has a positive effect on the quotes of the national currency. If the indicator falls below the forecast and, especially, below the value of 50, the dollar may sharply weaken in the short term.

Previous values of the PMI indicator:

• composite 49.5, 44.6, 47.7, 52.3, 53.6, 56.0;

• in the manufacturing sector 52.0, 51.5, 52.2, 57.0, 59.2;

• in the service sector 49.3, 43.7, 47.3, 52.7, 53.4, 55.6.

The level of market impact is high, although lower than the similar report from the ISM (American Institute of Supply Management)

Tuesday 25 October

USA. Consumer Confidence Index

Report by the Conference Board with the results of a survey of about 3,000 American households, during which respondents are asked to assess the level of current, future economic conditions and the overall economic situation in the United States. The confidence of American consumers in the economic development of the country and in the stability of their economic situation is a leading indicator of consumer spending, which accounts for a large part of overall economic activity. A high level of consumer confidence indicates growth in the economy, while a low level indicates stagnation. The previous value of the indicator is 108.0. An increase in the indicator will strengthen the USD, and a decrease in the value will weaken the dollar.

The level of influence on the markets is medium to high.

Wednesday 26 October

Australia. Consumer Price Index (for the 3rd quarter). Reserve Bank of Australia Core Inflation Index using the truncated average method (for the 3rd quarter)

The Consumer Price Index (CPI) determines the change in prices in a certain basket of goods and services for a given period, being a key indicator for assessing inflation and changes in consumer preferences. The assessment of the inflation rate is important for the management of the central bank when determining the parameters of the current monetary policy. The indicator below the forecast/previous value may provoke a weakening of the AUD, since low inflation will force the RBA leaders to adhere to a soft monetary policy course. Conversely, the growth of inflation and its high level will put pressure on the RBA to tighten its monetary policy, which in normal economic conditions is assessed as a positive factor for the national currency.

Previous values of the indicator: +1.8% (+6.1% in annual terms) in the 2nd quarter of 2022, +2.1% (+5.1% in annual terms) in the 1st quarter of 2022, +1.3% (+3.5% in annual terms) in the 4th quarter, +0.8% (+3.0% YoY) in the 3rd quarter, +0.8% (+3.8% YoY) in the 2nd quarter, +0.6% (+1.1% YoY) in the 1st quarter of 2021.

Forecast for the 3rd quarter of 2022: +1.5% (+6.9% in annual terms).

The level of influence on the markets is high.

The RBA Core Inflation Index, measured by the truncated average method (for the 3rd quarter)

Published by the RBA and the Australian Bureau of Statistics. It reflects the dynamics of retail prices of goods and services included in the consumer basket. The simple truncated average method takes into account the weighted average core, the central 70% of the index components. Previous index values: +1.5% (+4.9% YoY) in the 2nd quarter of 2022, +1.4% (+3.7% YoY) in the 1st quarter of 2022, +1.0% (+2.6% YoY) in the 4th quarter, +0.7% (+2.1% YoY) in the 3rd quarter, +0.5% (+1.6% YoY) in the 2nd quarter, +0.3% (+1.1% YoY) in the 1st quarter of 2021.

Forecast for the 3rd quarter of 2022: +2.0% (+5.5% in annual terms).

The level of influence on the markets is high.

China. GDP (quarterly). Retail Sales

China's National Bureau of Statistics is to release its quarterly GDP report, which is the broadest measure of economic activity and a major indicator of the health of the economy. High GDP figures will have a positive impact on the Chinese yuan quotes, and, conversely, a weak GDP report will have a negative impact on the CNY.

The dynamics of China's GDP is reflected not only in the dynamics of the Chinese yuan, but also in the dynamics of the world, primarily Asian stock indices, as well as on quotes of commodity currencies such as the New Zealand and Australian dollars. China is the largest trade and economic partner of Australia and New Zealand and the buyer of raw materials from these countries.

Therefore, positive macro statistics from China may also have a positive impact on the quotes of these commodity currencies, although recent data from China indicate a slowdown in the world's largest economy, and this is a negative factor for stock markets and commodity currency quotes.

Previous Chinese GDP: -2.6% (+0.4% YoY) in Q2, +1.3% (+4.8% YoY) in Q1 2022, + 1.6% (+4.0% YoY) in Q4, +0.2% (+4.9% YoY) in Q3, +1.3% (+7, 9% YoY) in Q2, +0.6% (+18.3% YoY) in Q1 2021.

The level of influence on the markets is medium to high.

The Retail Sales Level Index is released monthly by China's National Bureau of Statistics and evaluates the total volume of retail sales and cash generated. It is the main indicator of consumer spending, which accounts for the majority of overall economic activity. It is also considered an indicator of consumer confidence and reflects the state of the retail sector in the short term.

The growth of the index is usually a positive factor for the CNY; a decrease in the indicator will negatively affect the CNY.

Previous index values (in annual terms) +5.4%, -6.7%, -11.1, -3.5, +6.7 (in February 2022) after +8% growth in the last months of 2019 year and falling by -20.5% in February 2020).

The data speaks of the uneven recovery of this sector of the Chinese economy after a strong fall in February-March 2020. If the data turns out to be weaker than the forecast and/or previous values, then the CNY may weaken sharply.

The level of influence on the markets is medium to high.

Canada. Bank of Canada interest rate decision. Bank of Canada accompanying statement

The level of interest rates is the most important factor in assessing the value of a currency. Most other economic indicators are only looked at by investors to predict how rates will move in the future.

Inflation in the country accelerated to almost a 40-year high (in February 2022, consumer prices in Canada rose at an annualized rate of 5.7% after rising by 5.1% in January, reaching a 30-year high, and in May - already to 7.7%). This is the highest figure since March 1983!

The Bank of Canada estimates that the neutral level of the interest rate, at which it does not stimulate or slow down economic activity, is 2.5%.

The current level of the interest rate is 3.25%. The Bank of Canada is widely expected to raise interest rates again at this meeting (by 0.50% or even 0.75%).

In an accompanying statement, Bank of Canada officials will explain the decision and possibly share plans for the monetary policy outlook.

The tough tone of this statement will cause the Canadian dollar to strengthen. The propensity of the bank's leaders to carry out a soft policy may provoke a weakening of the Canadian dollar.

The level of influence on the markets is high.

Canada. Bank of Canada Press Conference

The press conference consists of two parts - first the prepared statement is read out, then the conference is open for press questions. This is one of the main methods that the Bank of Canada uses to communicate with market participants on monetary policy issues, also giving hints about future monetary policy. It examines in detail the factors that influenced the decision of the bank's management on the interest rate.

During the press conference, Bank of Canada Governor Tiff Macklem will explain the bank's position and assess the current economic situation in the country. If the tone of his speech is tough on the monetary policy of the Bank of Canada, then the Canadian dollar will strengthen in the foreign exchange market. If Macklem speaks in favor of a soft monetary policy, the Canadian currency will decline. In any case, high volatility in CAD quotes is expected during his speech.

The level of influence on the markets is high.