Catalans claim independence but Madrid hold firm

Sterling was provided with a slight boost on Friday afternoon as the Catalans declared independence. However the Spanish parliament in Madrid have approved direct rule over the region and have since dissolved the Catalonia parliament. Tensions are high in Spain with both the Catalans and the Spanish government not willing to stand down, although independence has been declared in Barcelona it may be sometime until there is a resolution to this ongoing situation. It is worth noting that the Catalans provide 25% to the Spanish economy. Should The Catalans become an independent nation this could hurt the Euro but more importantly Spain’s economy, The Spanish have already had past problems with various bail outs this could once again spell bad news for the nation and indeed the Euro.

Bank of England to announce interest rate decision

All eyes on Sterling this week as the eagerly awaited interest rate decision from the Bank of England comes on Thursday at 12pm. There has not been a rate hike in the UK for over a decade, analysts are widely predicting that a rise in the interest rate is imminent. Whilst this a major Sterling positive we may not see a vast improvement in the rates as over the past couple of weeks it has already seemingly been priced into the market. However, there is a cause for concern as a rate hike is not a definite and should the rate remain at the historic low of 0.25% then the pound is likely to suffer, erasing the gains it has made and sending the Pound down once again.

The Week Ahead

Although the eyes are on BoE’s interest rate decision on Thursday there is a vast amount of data to be released from all the majors which is likely to create high volatility as October draws to end and go into November. Below is a schedule of all the data releases this week.

Monday:

9.30am – UK – Consumer Credit & Mortgage Approvals

10am – EU – Industrial & Consumer Confidence, Service & Economic sentiment & Business climate

12.30pm – US – Core Personal consumption expenditures & income, Personal spending

2.30pm – US – Dallas Fed manufacturing business index

9.45pm – NZD – Building permits

Tuesday:

11.30am – JPY – Unemployment rate, overall household spending

12pm – AUS – HIA new home sales

12.01pm – UK – Gfk Consumer confidence

2am –  JPY – Interest rate decision

10am – EU – GDP, CPI & unemployment rate

12.30am – CAD – GDP

1pm – US – Chicago purchasing managers index

9.45pm – NZD – Unemployment rate

10.30pm – AUS – AiG performance of Mfg index

Wednesday:

9am – UK – Markit manufacturing

12.15pm – US – ADP employment change

2pm – US – ISM manufacturing & prices paid, Construction spending

2.30pm – CAD – Markit manufacturing

2.30pm – US – EIA crude oil stocks change

2.45pm – US – Markit manufacturing PMi

6pm – US – FED interest rate decision

Thursday:

12.30am – AUS – Trade balance, imports, exports & Building permits

8.15am – CHF – Retail sales

9am – EU – Unemployment change & Markit manufacturing

9.30am – UK PMI construction

12pm – UK – Interest rate decision

12.30pm – US – Jobless claims, nonfarm productivity & unit labour costs

Friday:

12.30am – AUS – Retail sales

12.30pm – US – Average hourly and weekly earnings, Nonfarm payrolls, unemployment rate & Trade balance

12.30pm – CAD – International merchandise trade & participation rate

1.45pm – USA – Markit services, PMI composite, ISM non-manufacturing, factory orders & Baker Hughes US oil rig count