Week Ahead – US Inflation Set to Dominate Markets

Author – Connor Woods, Senior Market Analyst

Date: October 10th– October 14th  

A stronger than anticipated jobs report on Friday showed traders that the labour market remains robust despite the Federal Reserves aggressive monetary policy tightening？ This week, attention turns to U.S inflation. Make sure you are reading our week ahead article each week to find out all the main talking points.

U.S Inflation

U.S Inflation is due out on Thursday at 1:30 pm (GMT), and the importance of the report has elevated thanks to the robust jobs report on Friday. Economists are expecting the headline rate of inflation to moderate. However, core inflation, which excludes food and fuel costs, is expected to rise. This would show that the Federal Reserve have even more room to be hawkish, something that is not yet priced in.

If increased hawkish data comes out this week, then traders will be looking at the 10500 level in the NASDAQ100. The weakness of this index is evident from the RSI divergence shown by the arrows on the chart, and the short and sharp two-day relay investors witnessed on Tuesday and Wednesday of last week.

Oil Prices  

Oil prices are likely to remain volatile this week after last weeks rally to five-week highs. The U.S has been vocal in it hope to keep global oil prices lower. Despite this, the OPEC+ decided to go ahead with plans to controversially cut oil production by two million barrels per day.

Crude oils rally is clear to see on the chart above, and has broken a structure high along the way. There could be a huge test of the 200-day moving average on the way. Can oil exceed $100 per barrel？

UK Meeting Minutes

On Wednesday, the Bank of Englands Financial Policy Committee is to publish its meeting minutes from its previous policy decision. The UK has received heavy criticism on its disjointed policy, which saw the Bank of England step in to stabilise the bond market. Investors are expecting a full percentage point interest rate hike in its next meeting.

Everyone at Zenfinex hopes you are having a great trading week. If you would like to know more about the products we offer, feel free to visit www.zenfinex.com.

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