Forex Week Ahead: Inflation And GDP Reports

Inflation and GDP data will be the main dominating themes this coming week. Data from the Eurozone, Canada, the United States, the UK, and Sweden will show the overall inflationary trends during the month of October.

The inflation data is also likely to influence some of the monetary policy decisions due in December. However, consumer prices are expected to remain broadly stable compared to the previous month.

GDP reports are also coming out next week. The Eurozone will be releasing its second GDP estimates. No changes are expected as the Eurozone annual GDP growth rate is expected to remain unchanged at 2.5% in the quarter ending September.

The GDP from Japan is however expected to show a weakening in the economic activity. Still, the declines in the GDP are only expected to remain moderate following a better than expected increase in the previous quarter.

Here’s a quick recap into this week’s economic calendar for the currency markets.

Inflation and GDP reports to dominate the markets this week

Inflation data is expected to be released across some of the major G7 economies this week. The consumer prices data will likely confirm whether inflationary pressures are returning the weakness in consumer prices will persist.

UK Consumer Price Index (Annual CPI). Source: Tradingeconomics.com

In the Eurozone, the final inflation figures are expected to show no change. This confirms the decline in the pace of increase. Consumer prices rose 1.4% on the headline and 0.9% on the core according to the flash estimates released a few weeks before. This would mark a slowdown in inflation following the previous months of steady increase.

The Eurozone’s second revised GDP estimates are also coming up this week. Following the initial estimates that showed a 0.5% quarterly increase, no revisions are expected. This leaves the Eurozone economic activity rising 2.5% on the year during the third quarter.

In the US the inflation data is forecast to show another slower pace of increase in consumer prices. Headline CPI is forecast to rise just 0.1% on the month in October.