The first month of autumn-2020 is nearly over, and it only confirms the uniqueness and unpredictability of this year. The market is gradually focusing on the US policy statistics, though the coronavirus remains a mighty depressing factor that corrects market fluctuations.
American policy: focused on debates
This week, the market will keep a close eye on the events on the US political scene: there, debates between presidential candidates start. It is vital to detect the trend in the US relations with China and Russia: depending on the commentaries, the RUB (to a greater degree) and the CNY (to a smaller degree as a state-managed currency) may change the direction.
USD: the statistics will make the future clear
The market is focused on US statistics on the labor market in September. We expect the positive tendency to preserve here but certain signals make investors worry. For example, the unemployment claims index last week demonstrated an increase, though slight. This means that the positive impulse is either getting weaker, or the labor market needs more support from the government. In the new data on the unemployment rate, the market will be looking for corresponding signals. For now, the forecasts are as follows: the unemployment rate in September may have changed to 8.4% from 8.0%. The average hourly earnings might have grown by 0.2% after the previous growth by 0.4%. As for the non-farm employment change, in August, the index grew by 1.371 million; in September, it might have increased by 1-1.1 million. The stronger the statistics, the better for the USD.
GBP: do not underestimate Brexit
It is worth having a look at what is happening in Britain with Brexit: Prime minister Boris Johnson is passing a bill that will let London ignore the promises that it gave to the EU last week. This is done mostly because London sees no other way and, as the English do, has no intention to retreat by a single step: Brexit talks get stuck at the issue of the border with Northern Ireland again and again. The EU is fairly tired of empty talks and running in a circle, while Britain is not ready to retreat and is looking for some ways to play the story back to avoid unwelcome promises. All this stresses the GBP out.
EUR: the influence of statistics is limited
In the EU, the statistics will be scarce. Pay attention to the unemployment rate in September that might have remained negative. The longer deflation lasts in the region, the more painful will be the circumstances. The profit of EU companies might shrink, investors have no stimuli because real interest rates are higher than the nominal, the interest of consumers is almost dead, and wages are also falling. These are global problems which, however, might become local if the deflation becomes a part of daily life.
The season of Central banks is not over yet
The leading Central banks of the world have already made their September decisions but not all of them have carried out the planned meetings. This week, the Central banks will have meetings in Angola, Ghana, Kenya, India, and the Philippines. The influence of these Central banks on the falling of the world currency market is limited but interest rates may fluctuate locally.