Next week’s calendar brims with sentiment data releases. The Conference Board and the University of Michigan in the US, the IFO Business Climate indicator in Germany and, of course, preliminary PMI releases worldwide will shed light on the prospects of major economies.
Also, Wednesday will see the final release of German 3Q real GDP growth. The preliminary report offered evidence of the strength of the German economy, and helped the euro appreciate against the US dollar.
CIO thinks that EURUSD will consolidate in the 1.15 to 1.20 range in the months ahead. Given the benign outlook for the global economy, EURUSD should push even higher later due to factors such as strong demand for European exports and investors looking for attractive opportunities outside the US.
In emerging markets, South Africa will be in the spotlight next week. A central bank decision on its policy rate on Thursday will be followed by S&P and Moody’s rating reviews of the country. Their local-currency ratings are just above the critical non-investment grade threshold with a negative outlook, and another downgrade would likely weigh on the rand. In Hungary, CIO expects the central bank to keep up its guidance for loose monetary policy for an extended time at next week’s meeting.
Other data to be released include trade figures in Japan, Switzerland and New Zealand, as well as numbers for durable goods orders and existing home sales in the US.