Overview of key macro events next week: Federal Reserve officials will continue to speak, increasing uncertainty about rate cuts

Comments from Federal Reserve officials such as Williams, Goolsbee and Barkin this week suggest that they consider September's CPI to be dismissible inflation data. Bostic stated in an interview that he would consider not cutting interest rates in one of the remaining two meetings this year. However, the market still seems quite confident that the Fed will cut interest rates by 25 basis points as usual at next month's meeting, but it won't be as aggressive as previously imagined. Keep an eye on views from Waller, Kugler and others next week.

The first half of next week lacks important U.S. economic data; markets have to wait until Thursday for U.S.'s September retail sales data. The market reaction might be simple: unexpectedly high data will support the dollar and vice versa. CFTC data shows that by October 8th, speculative market participants including hedge funds, asset management companies and other institutions had reduced their bets on a weaker dollar from $13.6 billion last week to about $9.4 billion.

Geopolitical risks brought about by conflicts in the Middle East also drove demand for safe-haven currencies like the US dollar and Swiss francs.The US dollar has risen more than 2% in less than two weeks in October.Forex experts at Crédit Agricole revealed recent client meetings indicate doubts among forex investors whether this represents a return of "King Dollar". Macro events worth watching next week include:

Monday 23:00 - U.S.'s New York Fed's one-year inflation expectation for September;

Tuesday 03:00 - Fed Governor Waller speaks on economic outlook;

Tuesday 23:30 - Speeches & dialogues with FOMC voter (2024) & San Francisco Fed President Daly at NYU Stern School event;

Wednesday 20:30 - U.S.'s import price index MoM for September;

Wednesday 01:05 - Fed Governor Kugler speaks;

Thursday 23:00 - Welcoming remarks by FOMC voter (2025) & Chicago Fed President Goolsbee at an annual meeting;

Thursday 20:30 - U.S.'s initial jobless claims for the week ending October 12th, September retail sales MoM, and Philadelphia Fed Manufacturing Index for October;

Friday 07:30 - Japan's core CPI YoY for September;

Friday 10:00 - China's Q3 GDP YoY, total retail sales of consumer goods YoY in September, and value added of industries above designated size YoY in September; 

Friday 22:00 - Speech by FOMC voter (2026) & Minneapolis Fed President Kashkari.