Interest Rate Decisions, CPI Data, and Market Movers (14-18 October)

Get insights on key events from this week including rate cuts by the RBNZ, ECB projections, CPI data, and jobless claims.

Upcoming Events and Forecasts

Gold and Silver 

Gold closed the previous week on a positive note. Despite the strengthening of the dollar index, the increase in geopolitical risks fueled the rise of the yellow metal. In contrast, silver ended the week with a decline, marking a departure from the trends of the past four weeks.

The Dollar Index 

The US Dollar Index continued its upward trend this week, supported by high inflation data and concerns about persistent price increases. A strong Consumer Price Index, driven by rising transportation and housing costs, further solidified expectations of continued rate hikes. Meanwhile, comments from the Atlanta Federal Reserve President suggesting a potential pause in rate increases added to market volatility. The escalating geopolitical tensions between Israel and Iran also provided support to the US Dollar.

Forex Market 

The EUR/USD pair experienced a corrective movement over the past week, largely influenced by the strength of the DXY and rising geopolitical tensions. The upcoming week is expected to be volatile due to the release of CPI data and interest rate decisions. The European Central Bank (ECB) is expected to cut interest rates by 25 basis points next week.

The pound closed the week with a decline. The growth data, which aligned with expectations, sustained the heightened expectations for interest rate cuts that emerged last week.

Following the New Zealand Central Bank's decision to cut interest rates by 50 basis points as expected, the NZD/USD pair closed the week negatively, influenced by the strength of the dollar.

The Canadian dollar closed the week at its lowest level since August. Despite a slight decrease in expectations for a 50 basis point rate cut following an employment report that exceeded forecasts, the USD/CAD pair experienced a rally of approximately 200 pips this week.

Stock Market 

Indices closed the previous week at record levels. The Dow Jones experienced a weekly increase of 1.44%, while the S&P 500 rose by 1.22%, setting new historical highs. Although the Nasdaq did not reach a new all-time high, it still posted a gain of 1.5%. The banking and technology sectors led the upward movement.

On a stock-by-stock basis, NVIDIA stood out with an impressive weekly gain of 8%. Amazon followed with a 1.5% increase, while Cisco recorded a 3% rise, accompanying NVIDIA in the spotlight.

On the downside, Tesla's 12% decline was one of the most notable changes of the week. Additionally, Google's 3% drop also drew significant attention.