| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 06:00 | Germany | Factory Orders s.a. (MoM) | August | 3.9% | -2% | -5.8% |
| 09:00 | Eurozone | Retail Sales (MoM) | August | 0% | 0.2% | 0.2% |
| 09:00 | Eurozone | Retail Sales (YoY) | August | -0.1% | 1% | 0.8% |
USD gained against most of its major counterparts in the European session on Monday as investors’ focus shifted to this week’s inflation reports from the U.S. after a blowout jobs report on Friday prompted markets to back away from expectations of another outsized rate cut from the Federal Reserve this year.
The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, rose 0.05% from the previous close to 102.57.
As a reminder, the September Employment Situation Report, published on Friday, showed stronger-than-anticipated hiring, an unexpected drop in the unemployment rate, and a surprise rise in average hourly earnings. Such outcomes were consistent with the markets’ soft landing narrative, which caused a recalibration in the Fed rate cut bets due to the notion that the U.S. central bank won't have to deliver another aggressive rate cut of 50 basis points in the near term as it did in September.
According to CME FedWatch, markets now see an 85.0%probability of a 25-basis-point rate decrease at the Fed’s November meeting and a 15.0% probability of no change in rates.
This week’s reports on U.S. consumer prices and producer prices for September are expected to provide clues on inflation trends and the path of the Fed policy in the near term.
If inflation comes in lower than expected, it could reignite bets on more policy easing by the Fed this year. However, hotter-then-forecast inflation figures would cement the case for smaller rate cuts.