Market Analysis

Trade talks and FOMC meeting minutes headline the economic docket

During the upcoming trading week, traders and investors will be focused on the resumption of trade talks between Beijing and Washington and the release of the FOMC meeting minutes. Traders and investors also await the release of U.S consumer price index and producer price index inflation data for the month of September.

Expectations are reasonably low that the United States and China will finally strike a trade deal when they meet in Washington D.C this week, given recent dovish statements from both sides. Most analysts are expecting that the outcome of upcoming trade talks will end in a reduction of recent tensions, rather than an end to the ongoing trade war.

The release of the FOMC meeting minutes this week has the potential to generate substantial volatility in financial markets. St.Louis FED President James Bullard dissented during the September FOMC policy meeting. The U.S central bank decided to cut interest rates by twenty-five basis points, with President James Bullard dissenting and calling for a fifty basis point rate cut.

Financial market participants will learn more about Bullard’s decision, and also how other FOMC members are currently feeling about the United States economy. Given the recent downturn in U.S macroeconomic data, markets are likely to be very sensitive to overly hawkish or dovish commentary inside the meeting minutes.

U.S inflation data is also in focus this week, with the producer price index predicted to increase by 0.2 percent, underscoring muted price pressure in the U.S economy. CPI inflation is also expected to come in at just 0.2 percent on a monthly basis this week, which may trouble the U.S central bank, given recent bullish U.S inflation projections.


EUR/USD Daily Candlestick Chart | Source: ActivTrader

EUR/USD Daily Candlestick Chart | Source: ActivTrader


The EUR/USD pair has experienced a welcome bounce from the 1.0880 level, as recent soft U.S data pushed the greenback lower on the foreign exchange market. The 1.1110 level remains the overall bullish target if buyers can maintain the pair above the 1.1025 level this week, key support is found at the 1.0950 and 1.0880 levels.


Written by Nathan Batchelor, External Analyst, ActivTrades

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