Markets Eye Key Data and Central Bank Speeches as Volatility Rises

UK: GBP Drivers

Data Points Expected This Week:

• Claimant Count Change – Measures the number of people claiming unemployment benefits. A larger than expected drop signals a stronger Labor market, which could support the pound. Conversely, a rise may weigh on GBP.
• Employment Change – Tracks the net number of jobs added or lost. Strong job creation tends to boost the pound as it reflects economic resilience.
• ILO Unemployment Rate – A broad measure of unemployment. Higher unemployment may pressure the BoE to maintain stimulus, weakening GBP.
• BoE Governor Bailey Speech – Market sensitive event; investors look for hints on the next interest rate move or policy stance. Hawkish tones could strengthen GBP; dovish tones may weaken it.

Interest & Inflation Context:

• Bank Rate: 4% | Next Meeting: 6/11/25
• Inflation: 3.8% | Next Print: 22/10/25.

Higher inflation increases the likelihood of future rate hikes, which is supportive for GBP.

US: USD Drivers

Data Points Expected This Week:

• Producer Price Index (PPI) – Measures wholesale inflation. A higher reading can signal upward pressure on consumer prices and influence Fed policy expectations. Strong PPI supports USD.
• Retail Sales – Measures consumer spending. Strong retail sales suggest economic resilience and can bolster the dollar. Weak data may dampen USD sentiment.
• Fed Chair Powell Speech – Market closely monitors for commentary on interest rates, inflation, or the Fed’s economic outlook. Hawkish remarks can lift USD; dovish tones may weigh on it.

Interest & Inflation Context:

• Bank Rate: 4.25% | Next Meeting: 29/10/25
• Inflation: 2.9% | Next Print: 24/10/25

The combination of near term inflation readings and Powell’s speech will likely drive USD volatility this week.

EU – EUR Drivers.

Data Points Expected This Week:

• Harmonized Index of Consumer Prices (HICP) – The eurozone’s core inflation measure. Higher than expected readings can strengthen the euro by increasing expectations for ECB tightening.
• ECB President Lagarde Speech – Investors watch for policy guidance. Any hint of maintaining or tightening policy could boost EUR; dovish signals could weigh on it.

Interest & Inflation Context:

• ECB Rate: 2.15% | Next Meeting: 30/10/25
• Inflation: 2.2% | Next Print: 17/10/25

Inflation has stabilised, but markets are sensitive to ECB messaging about future rate paths.

Summary

• GBP: Sensitive to UK Labor market data and BoE commentary; strong employment and hawkish speech, GBP strength.
• USD: Likely to react to PPI, Retail Sales, and Powell’s comments; strong inflation/spending data, USD support.
• EUR: HICP and Lagarde’s speech are key; stronger inflation or hawkish tone, EUR strength.
• Market Volatility: Expect heightened short term volatility around these data releases and speeches, which can create trading opportunities in FX.

Stock Markets

US equities remain under pressure as the S&P 500 posts its worst performance during a government shutdown since 1990. Investor focus is on earnings and macroeconomic data releases.

Oil prices are recovering from recent lows amid hopes of eased US & China trade tensions.

• Brent Crude: $63.65 per barrel
• WTI Crude: $59.79 per barrel

Outlook: Short term rebound likely, but long term forecasts point to declining prices due to rising inventories.

Gold Record Highs Amid Geopolitical Tensions.

• Gold continues to rally, reaching $4,078.05 per ounce, fuelled by geopolitical uncertainty, potential Fed rate cuts, and increased central bank demand.

Outlook: Buying on dips remains a strategic play. Key support: $2,500–$2,530 | Resistance: $2,900.