Attention focuses on important statements for one week! ~ Strategy and event schedule for the week of October 8 ~

◎ This Week's نقاط of Interest

1) Italy Budget-Related

Italy is preparing a budget proposal to submit to the EU. The submission deadline is the 15th. The reactions in Italy and from the EU regarding the budget are in focus. It feels like some degree of embedding into Italy's budget has begun, but if the budget submission and rejection become substantial, there may be another step of euro depreciation. Conversely, if there are concessions or conciliatory remarks, the euro may rebound. I think so. If there are conciliatory statements, the euro might rally. I believe so.

Euro fluctuates wildly around Italy’s budget! What’s the issue? Explained

EUR/USD, as above, is weighing its direction around the budget, but I am considering a rough guideline with the chart below.

I think the adjustment/reversal point when it falls could be around 1.1545 or 1.1595. If it cannot hold here, it would return to the four-month range. If it stops at this point and starts to fall, it may test lower levels. Another key point for a downtrend is a break below the parallel channel (white line) on the daily chart. This week looks likely to return to a range or test lower levels, a week to watch.。

EUR/USD Timeframe Chart

EUR/USD Daily Chart

2)Brexit Negotiations

Brexit talks are also nearing a deadline The deadline was the EU Leaders’ Summit on October 18. However, it appears that Brexit negotiations may extend until the extraordinary EU summit in November. Both the UK and the EU are working hard to obtain some progress this week. Officials from both sides are meeting and negotiating here and there. This week, headlines could appear at any time, so stay alert. Sterling is believed to have priced in most of the bad news. So, positive remarks may trigger a reaction, but, negative remarks are less likely to move it(excluding denials after positive comments).

EUR/GBP Daily Chart

GBP/JPY Daily Chart

3)Release of Pastor Brunson and the Turkish Lira

Last week's CPI came in higher than expected, the Turkish lira was sold off. However, when news spread that the US might demand the release of Pastor Brunson, the lira sell-off cooled. The pastor’s release is expected on Friday the 12th. If he is released as is, there should be no problem, but if it drags on, the Turkish lira may be sold again. Still, even if released, it is unlikely that the lira will rally merely because of this. Turkey’s problems are not only the Pastor.

USD/TRY Timeframe Chart

USD/TRY Daily Chart

4)G20 Finance Ministers and Central Bank Governors Meeting

This time, the focus is likely on protectionism and tariffs. Additionally, issues of capital outflows from emerging markets will likely be addressed. The gathering of central bank governors and finance ministers will draw attention to their statements.

5)Bavarian State Election

Germany’s Bavaria state election will be held. While a local election, it attracts high attention. What is notable?!Bavaria is where Chancellor Merkel sits in her seat. Since winning is expected, if the results show a tough race or a loss, it could trigger euro selling. The outcome of this election will be a prelude to next year’s European Parliament elections, which is why attention is heightened.This election's result will be a prelude to the European Parliament elections next year. It has drawn extra attention.

◎ This Week’s Event Schedule

10/7 (Sunday)

Brazilian Presidential Election
Australia Daylight Saving Time starts

10/8 (Monday)

Tokyo market closed
Canada closed
US bond market closed

10:45　CNY　Caixin Services PMI
18:30　USDBrainerd, St. Louis Fed President Speech

10/9 (Tuesday)

09:30　AUD　NAB Business Confidence
15:00　EUR　Germany Trade Balance
16:00　CZK　CPI (Consumer Price Index)
16:00　HUF　Hungary CPI
21:15　CAD　Housing Starts
22:00　MXN　Mexico CPI
22:30　EUR　Benoît France Central Bank President Speech
23:00　USDEvans, Chicago Fed President Speech
23:35　USDWilliams, New York Fed President Speech

10/10 (Wednesday)

02:00　USD　Harker, Philadelphia Fed President Speech
08:30　AUD　Westpac Consumer Confidence
15:00　SEK　Sweden Unemployment
15:00　NOKNorway CPI
17:30　GBPUK GDP and Industrial Production

10/11 (Thursday)

01:15　USDEvans, Chicago Fed President Speech

07:00　USDBullard, St. Louis Fed President Speech




20:30　EURECB Meeting minutes (9/12-13)
21:30　USDUS CPI

10/12 (Friday)

G20 Finance Ministers and Central Bank Governors Meeting (Bali, Indonesia)
IMF and World Bank Annual Meetings (Bali, Indonesia)
Turkey – Brunson Pastor Release Hearing

00:00　USD　Crude oil inventories
00:00　USDMester, Cleveland Fed President Speech





22:30　USDEvans, Chicago Fed President Speech

10/13 (Saturday)

01:30　USDBullard, Atlanta Fed President Speech

10/14 (Sunday)