Good morning, traders.

The market is likely to exhibit sharp movements in the wake of Fed rate decision, BOC monetary policy, and the US advance GDP figures. The chances of the third rate cut by Federal Reserve in its meeting on Wednesday has declined after the partial trade truce between US & China and the grant for an extension of 3 months to the UK for an orderly Brexit from Europe.

These two factors were heavily weighing on the decision of Fed for further rate cuts, but after the raised optimism in the market related to these issues, it has now become uncertain that Fed would cut its rates on Wednesday. Let’s take a more in-depth look at the economic calendar.

Watchlist- Economic Event Outlook 

EUR – German Prelim CPI – All Day

Destatis will be releasing German Prelim CPI figures, which accounts for a majority of overall inflation. Inflation is significant to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. The German CPI has been crappy lately as the figure fell from 0.5% in July to -0.2% in September. The European Central Bank has made changes to its monetary policy in order to support the economy, and this month’s figure can be the first signal to understand whether the dovish policy has started working or not. Anyway, economists are expecting a 0% growth in the inflation rate.

USD – ADP Non-Farm Employment Change – 12:15 GMT

This data provides an early look at employment growth, usually 2 days ahead of the government-released employment data that it’s designed to mimic. Source changed series calculation formula in February 2007, December 2008, and November 2012 to better align with government data.

The Automatic Data Processing, Inc. is expected to release a slight drop in data from 135K to 125K in October. Job creation is an essential leading indicator of consumer spending, which accounts for a bulk of overall economic activity. Weaker data may drive bearish sentiments for the upcoming US NFP figures, which are due on Friday.

CAD – BOC Monetary Policy Decision – 14:00 GMT

The Bank of Canada is due to release its monetary policy meeting and rate decision. We’re not anticipating the Bank of Canada to follow the Federal Reserve with rate cuts just yet. The labor market’s stronger than foreseen, inflation’s widely on target, and rates are previously lower than in the US, and that will continue to further CAD momentum. Nevertheless, there are some symptoms of instability, and a December rate cut can’t be ruled out.

US Federal Reserve Monetary Policy Decision – 18:00 GMT

The Fed is widely anticipated to cut rates for a third consecutive time, with traders indicating a 90% possibility for such an action. Thus, the market response will depend mostly on the signals policymakers send regarding the possibility of planned action, not on the rate cut itself.

The Federal Reserve is broadly anticipated to present a 25 bp rate cut, the third this year. Beforehand, we thought the Fed would use this meeting to discuss the plumbing problems and the delivery of policy. Instead, it announced its T-bill purchases within sessions.

The dollar may trade bearish in the coming week as traders will be pricing in a rate cut from 2% to 1.75%.

That’s all for now, but stay tuned to our economic calendar for the live market updates and forex trading signals.

Good luck!