| Time (GMT) | Currency | Event | Previous | Forecast |
| 08:30 | GBP | Public Sector Net Borrowing | 5.1B | 5.7B |
| 12:30 | CAD | CPI m/m | 0.1% | 0.3% |
| 12:30 | CAD | Core Retail Sales m/m | 0.2% | 0.3% |
| 12:30 | CAD | Common CPI y/y | 1.5% | |
| 12:30 | CAD | Median CPI y/y | 1.7% | |
| 12:30 | CAD | Retail Sales m/m | 0.4% | 0.5% |
| 12:30 | CAD | Trimmed CPI y/y | 1.4% | |
| 14:00 | USD | Existing Home Sales | 5.35M | 5.30M |
| 23:30 | USD | Fed Chair Yellen Speaks | ||
| ALL DAY (Oct 22) | JPY | Upper House Elections |
Market Summary
Asian markets ended mixed on Thursday as they responded to domestic issues. Chinese linked markets fell after Beijing reported third quarter GDP fell to 6.8% from the reading of 6.9% in the second quarter. The data was in-line with analyst projections, but investors had been hoping for an upside surprise. Japan’s Nikkei held on to its winning ways as it notched a thirteenth consecutive winning session and a new 21-year high. Australia’s S&P/ASX 200 had a tepid gain, despite better than expected employment data, as the Chinese GDP data muted gains.
European markets began the day with a slow, but steady move higher, even though the prospects of a slowing Chinese economy weighed on the markets. Markets broke lower later in the day, however, on news that Spain was planning on invoking Article 155, which will suspend the autonomous rule for the Catalonian region beginning this weekend. The strong measure, which had been considered a nuclear option for Madrid, was announced in response to the failure of Catalonian officials to renounce their plans for independence. In London, the FTSE fell as well, dragged down by weakness from the consumer goods and services sector after British retail sales data was weaker than expected.
Markets in the U.S. got off to a poor start on Thursday as investor confidence was shaken by the political tensions surrounding Spain, as well as the reports of slowing growth in China. Not to mention the fact that it was the thirtieth anniversary of Black Monday, which gave investors the worst daily percentage loss for U.S. markets. So, it was surprising to see markets climbing back from their session lows in the afternoon, and the Dow and S&P 500 both finishing at new record closing levels. The Nasdaq wasn’t as fortunate, posting a loss, as weakness from the technology and energy sectors was too much for the index to overcome.
Today’s Assets
EUR/USD
Traders ignored the increasing tensions in Spain on Thursday, sending this pair higher as the Euro firmed and the U.S. dollar softened. One reason for the softness of the U.S. dollar was news that President Trump may be favoring Jerome Powell as his candidate for the next Federal Reserve chairman. Mr. Powell is a member of the Federal Reserve Board of Governors since 2012 and is known for being more dovish than other potential candidates. This would likely lead to delayed interest rate hikes in the U.S., keeping the U.S. dollar weaker throughout 2018. The move Thursday took the pair back above the 1.1800 level, but given recent action, we think there is limited further upside for the pair.
GBP/USD
The pair fell on Thursday, continuing a short-term downtrend that began at the start of the week. The drop came despite broad-based weakness in the U.S. dollar, and was primarily a response to the weak U.K. retail sales data released on Thursday. There are also lingering concerns over Brexit talks, with many speculating that the talks have ground to a halt and that the U.K. is not likely to get the terms they were looking for heading into the Brexit negotiations. Technically it seems the pair will nearly certainly fall further to test the 1.3000 level, and could even trade as low as the 1.2800 level before finding a solid base of support.
Click Here to Check out Today’s News Announcements on our Economic Calendar