The past week has been extremely busy with financial results announcements from major US companies and a flurry of uncertain economic and geopolitical news.
Over a period of just seven business days, four major events are scheduled to shape the market outlook for the rest of the year. If the results are contrary to expectations, there is a possibility that the direction will change immediately.
On November 2, the Federal Open Market Committee (FOMC) will publish its latest policy rate decision. The Fed should provide suggestions on the path to follow and could suggest a policy of easing the pace of aggressive rate hikes that could plunge the US economy into recession.
Two days later, on Tuesday, the US employment report for October will be released and will be a key indicator of how much the pace of hiring has slowed.
The mid-term elections will be held on the 8th and there is the possibility that the change of the majority in Congress will be decided. The Consumer Price Index (CPI) will be released on the 10th. It is a key statistic that has shaped the outlook for the course of US monetary policy since it hit its 40-year high.
With a series of corporate earnings announcements ahead of Monday’s interest rate decision by the Bank of England, it’s clear why parts of Wall Street are bracing for another volatility shock.
FOMC Interest Rate Decision
The signals on the Fed’s next move will be far more important as Wall Street looks certain the FOMC will raise interest rates by 0.75 percentage points for its fourth consecutive meeting on Wednesday. Traders are increasingly betting that the pace of rate hikes will begin to slow in December. The Bank of Canada’s decision to slow its rate hikes on October 26 due to mounting recession risks has opened the door for other central banks to follow suit.
Judging by the options expiring in the next two weeks, traders are expecting a bigger than usual price movement on November 2nd and 10th. SpotGamma founder Brent Kotuba said the FOMC interest rate decision was the most important of the upcoming event, setting the stage for how the economic data that follows will affect the markets. “For volatility traders, the FOMC comes first and everything else comes second,” he said.
Source: Bloomberg
news-rsf-original-reference paywall">Original title:Nervous stock traders watch four days that will sow the fate of the market(extract)
